Wage

Wage means payment for units of time or units of product as valued under a wage rate agreement. Today's most common unit is the hour. Many governments impose minimum wage rates upon employers to protect society. (e.g. Michigan's current minimum wage rate is: $890 per hour) However, many employers offer employees significantly higher wage rates. (e.g. Michigan's current median hourly rate for a Certified Nurse Assistant (CNA) is $1240 per hour)

Wages means remuneration ([L. remuneratio: cf. F. rémunération.] "Act or fact of remunerating"; "to give, present" an "advantage", "gift" or "reward" ) for services (or the quality thereof). In addition to receiving a wage, employees are often "put upon wages" to provide an employment advantage. These advantages may include such things as health and life insurance, paid vacation time, gifts for years of service, bonuses for high production rates and other employer provided benefits.

Payment by wage contrasts with salaried work, in which the employer pays an arranged amount at steady intervals (such as a week or month) regardless of hours worked, with commission which conditions pay on individual performance, and with compensation based on the performance of the company as a whole. Waged employees may also receive tips or gratuity paid directly by clients and employee benefits which are non-monetary forms of compensation. Since wage labour is the predominant form of work, the term "wage" sometimes refers to all forms (or all monetary forms) of employee compensation.

Origins and necessary components

Wage labour involves the exchange of money for time spent at work (the latter quantity is termed labor power by Karl Marx and subsequent economists). As Moses I. Finley lays out the issue in The Ancient Economy:

The very idea of wage-labour requires two difficult conceptual steps. First it requires the abstraction of a man's labour from both his person and the product of his work. When one purchases an object from an independent craftsman … one has not bought his labour but the object, which he had produced in his own time and under his own conditions of work. But when one hires labour, one purchases an abstraction, labour-power, which the purchaser then uses at a time and under conditions which he, the purchaser, not the "owner" of the labour-power, determines (and for which he normally pays after he has consumed it). Second, the wage labour system requires the establishment of a method of measuring the labour one has purchased, for purposes of payment, commonly by introducing a second abstraction, namely labour-time.[1]

The wage is the monetary measure corresponding to the standard units of working time (or to a standard amount of accomplished work, defined as a piece rate). The earliest such unit of time, still frequently used, is the day of work. The invention of clocks coincided with the elaborating of subdivisions of time for work, of which the hour became the most common, underlying the concept of an hourly wage.[2][3]

Wages were paid in the Middle Kingdom of Ancient Egypt,[4] Ancient Greece,[5] and Ancient Rome.[5]

Determinants of wage rates

Depending on the structure and traditions of different economies around the world, wage rates will be influenced by market forces (supply and demand), legislation, and tradition. Market forces are perhaps more dominant in the United States, while tradition, social structure and seniority, perhaps play a greater role in Japan.[6]

In a global market, the average wage for Americans in unskilled labor jobs tends to be low. While unemployment rates can be low, the global economy really caters to those who have the money and resources to access its vast potential. Looking at the Stock Market as a prime example, Lester Thurow points out that there was a real swing in levels of earning, where the top 10-20% of the country in terms of wealth absolutely thrived.[7] However, at the same time, this created a massive gap between what is successful and what is not. Furthering the problem, with the introduction of the Euro, now comes the war against its counterpart in the dollar. A drop in the dollar would signal an increase in inflation. The Euro gives companies and investors a truly viable option if they do not want to invest in dollars, further perpetuating the idea of a global market and economy. A lower price of the dollar and inflation could lead to lower real wages in America.

Wage differences

Even in countries where market forces primarily set wage rates, studies show that there are still differences in remuneration for work based on sex and race. For example, according to the U.S. Bureau of Labor Statistics, in 2007 women of all races made approximately 80% of the median wage of their male counterparts. This is likely due to the supply and demand for women in the market because of family obligations.[8] Similarly, white men made about 84% the wage of Asian men, and black men 64%.[9] These are overall averages and are not adjusted for the type, amount, and quality of work done.

Wage & Wages in the United States

Historical graph of real wages in the US from 1964 to 2005.

Seventy-five million workers earned hourly wages in the United States in 2012, making up 59% of employees.[10] In the United States, wages for most workers are set by market forces, or else by collective bargaining, where a labor union negotiates on the workers' behalf. The Fair Labor Standards Act establishes a minimum wage at the federal level that all states must abide by, among other provisions. Fourteen states and a number of cities have set their own minimum wage rates that are higher than the federal level. For certain federal or state government contacts, employers must pay the so-called prevailing wage as determined according to the Davis-Bacon Act or its state equivalent. Activists have undertaken to promote the idea of a living wage rate which account for living expenses and other basic necessities, setting the living wage rate much higher than current minimum wage laws require. The minimum wage rate is there to protect the well being of the working class.[11]

Wages defined in U.S. federal taxation and withholding code

Wages defined in U.S. state taxation and withholding code

Wages defined in U.S. city taxation and withholding code

See also

Political science:

References

  1. ↑ Finley, Moses I. (1973). The ancient economy. Berkeley: University of California Press. p. 65. ISBN 9780520024366.
  2. ↑ Thompson, E. P. (1967). "Time, Work-Discipline, and Industrial Capitalism". Past and Present. 38: 56–97. JSTOR 649749. doi:10.1093/past/38.1.56.
  3. ↑ Dohrn-van Rossum, Gerhard,, (1996). History of the hour: Clocks and modern temporal orders. Thomas Dunlap (trans.). Chicago: University of Chicago Press. ISBN 9780226155104.
  4. ↑ Ezzamel, Mahmoud (July 2004). "Work Organization in the Middle Kingdom, Ancient Egypt". Organization. 11 (4): 497–537. ISSN 1350-5084. doi:10.1177/1350508404044060. Retrieved 2014-02-13.
  5. 1 2 Finley, Moses I. (1973). The ancient economy. Berkeley: University of California Press. ISBN 9780520024366.
  6. ↑ – Education 2020 Homeschool console, Vocabulary Assignment, definition entry for "wage rate" (may require login to view)
  7. ↑ Thurow, Lester (Winter 1997). "New Rules: The American in the Next Century". Harvard International Review: 54–59.
  8. ↑ Magnusson, Charlotta. "Why Is There A Gender Wage Gap According To Occupational Prestige?." Acta Sociologica (Sage Publications, Ltd.) 53.2 (2010): 99-117. Academic Search Complete. Web. 26 Feb. 2015.
  9. ↑ U.S. Bureau of Labor Statistics. "Earnings of Women and Men by Race and Ethnicity, 2007" Accessed June 29, 2012
  10. ↑ "Employees" as a category excludes all those who are self-employed, and this statistics only considers workers over the age of 16. U.S. Department of Labor. Bureau of Labor Statistics (2013-02-26), Characteristics of Minimum Wage Workers: 2012
  11. ↑ Tennant, Michael. "Minimum Wage The Ups & Downs." New American (08856540) 30.12 (2014): 10-16. Academic Search Complete. Web. 26 Feb. 2015.
  12. ↑ "U.S.C. Title 26 - INTERNAL REVENUE CODE". www.gpo.gov. Retrieved 2017-05-10.
  13. ↑ "U.S.C. Title 42 - THE PUBLIC HEALTH AND WELFARE". www.gpo.gov. Retrieved 2017-05-10.
  14. ↑ "Michigan Legislature - Section 206.6". www.legislature.mi.gov. Retrieved 2017-05-10.
  15. ↑ "Michigan Legislature - Section 141.604". www.legislature.mi.gov. Retrieved 2017-05-10.

Further reading

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