Payment by an employer to an employee for labour
A
wage
is payment made by an
employer
to an
employee
for
work
done in a specific period of time. Some examples of wage payments include
compensatory
payments such as
minimum wage
,
prevailing wage
, and
yearly bonuses,
and
remunerative
payments such as
prizes
and
tip payouts.
Wages are part of the expenses that are involved in running a business. It is an obligation to the employee regardless of the profitability of the company.
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
[
edit
]
Wage labour
involves the exchange of money for time spent at work. 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]
Following the unification of the
city-states
in
Assyria
and
Sumer
by
Sargon of Akkad
into a
single empire
ruled from his
home city
circa 2334 BC,
common Mesopotamian standards
for
length
,
area
,
volume
,
weight
, and
time
used by
artisan
guilds
were promulgated by
Naram-Sin of Akkad
(c. 2254?2218 BC), Sargon's grandson, including
shekels
.
[6]
Codex Hammurabi
Law 234
(c. 1755?1750 BC) stipulated a 2-shekel
prevailing wage
for each 60-
gur
(300-
bushel
)
vessel
constructed in an
employment contract
between a
shipbuilder
and a
ship-owner
.
[7]
[8]
[9]
Law 275 stipulated a
ferry
rate
of 3-
gerah
per day on a
charterparty
between a
ship charterer
and a
shipmaster
. Law 276 stipulated a 2
1
⁄
2
-gerah per day
freight rate
on a
contract of affreightment
between a charterer and shipmaster, while Law 277 stipulated a
1
⁄
6
-shekel per day freight rate for a 60-gur vessel.
[10]
[11]
[9]
Determinants of wage rates
[
edit
]
Depending on the structure and traditions of different economies around the world, wage rates will be influenced by market forces (
supply and demand
), labour organisation, 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
.
[12]
[
citation needed
]
Wage differences
[
edit
]
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.
[13]
Similarly, white men made about 84% the wage of Asian men, and black men 64%.
[14]
These are overall averages and are not adjusted for the type, amount, and quality of work done.
Effects
[
edit
]
Corruption
[
edit
]
It is known that the wage level of employees in the
public sector
affects the frequency of corruption, and that higher salary levels for public sector workers help reduce corruption. It has also been shown that countries with smaller wage gaps in the public sector have less corruption.
[15]
Wages in the United States
[
edit
]
Historical graph of
real wages
in the US from 1964 to 2005
Wages in the United States
Seventy-five million workers earned hourly wages in the United States in 2012, making up 59% of employees.
[16]
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.
[17]
A
heat map
of the United States by
living wage
for a single, childless individual according to the
MIT
living wage calculator as of 2023
[18]
$15-15.99
$16.00-16.99
$17.00-17.99
$18.00-18.99
$19.00-19.99
$20+
In the second quarter of 2022, the total U.S. labor costs grew up 5.2% year over year, the highest growth since the starting point of the serie in 2001.
[19]
Definitions
[
edit
]
For purposes of federal income tax withholding, 26 U.S.C. § 3401(a) defines the term "wages" specifically for chapter 24 of the
Internal Revenue Code
:
"For purposes of this chapter, the term “wages” means all remuneration (other than fees paid to a public official) for services performed by an
employee
for his employer, including the cash value of all remuneration (including benefits) paid in any medium other than cash;" In addition to requiring that the remuneration must be for "services performed by an
employee
for his employer," the definition goes on to list 23 exclusions that must also be applied.
[20]
See also
[
edit
]
Political science:
References
[
edit
]
- ^
Finley, Moses I. (1973).
The ancient economy
. Berkeley: University of California Press. p. 65.
ISBN
9780520024366
.
- ^
Thompson, E. P. (1967). "Time, Work-Discipline, and Industrial Capitalism".
Past and Present
.
38
(38): 56?97.
doi
:
10.1093/past/38.1.56
.
JSTOR
649749
.
- ^
Dohrn-van Rossum, Gerhard (1996).
History of the hour: Clocks and modern temporal orders
. Thomas Dunlap (trans.). Chicago: University of Chicago Press.
ISBN
9780226155104
.
- ^
Ezzamel, Mahmoud (July 2004). "Work Organization in the Middle Kingdom, Ancient Egypt".
Organization
.
11
(4): 497?537.
doi
:
10.1177/1350508404044060
.
ISSN
1350-5084
.
S2CID
143251928
.
- ^
a
b
Finley, Moses I. (1973).
The ancient economy
. Berkeley: University of California Press.
ISBN
9780520024366
.
- ^
Powell, Marvin A. (1995). "Metrology and Mathematics in Ancient Mesopotamia". In Sasson, Jack M. (ed.).
Civilizations of the Ancient Near East
. Vol. III. New York, NY: Charles Scribner's Sons. p.
1955
.
ISBN
0-684-19279-9
.
- ^
Hammurabi
(1903).
"Code of Hammurabi, King of Babylon"
.
Records of the Past
.
2
(3). Translated by Sommer, Otto.
Washington, DC
:
Records of the Past Exploration Society
:
85
. Retrieved
June 20,
2021
.
234. If a shipbuilder builds ... as a present [compensation].
- ^
Hammurabi
(1904).
"Code of Hammurabi, King of Babylon"
(PDF)
.
Liberty Fund
. Translated by Harper, Robert Francis (2nd ed.).
Chicago
:
University of Chicago Press
. p.
83
. Retrieved
June 20,
2021
.
§234. If a boatman build ... silver as his wage.
- ^
a
b
Hammurabi
(1910).
"Code of Hammurabi, King of Babylon"
.
Avalon Project
. Translated by King, Leonard William.
New Haven, CT
:
Yale Law School
. Retrieved
June 20,
2021
.
- ^
Hammurabi
(1903).
"Code of Hammurabi, King of Babylon"
.
Records of the Past
.
2
(3). Translated by Sommer, Otto.
Washington, DC
:
Records of the Past Exploration Society
:
88
. Retrieved
June 20,
2021
.
275. If anyone hires a ... day as rent therefor.
- ^
Hammurabi
(1904).
"Code of Hammurabi, King of Babylon"
(PDF)
.
Liberty Fund
. Translated by Harper, Robert Francis (2nd ed.).
Chicago
:
University of Chicago Press
. p.
95
. Retrieved
June 20,
2021
.
§275. If a man hire ... its hire per day.
- ^
"Student Login"
.
Edgenuity
.
? Education 2020 Homeschool console, Vocabulary Assignment, definition entry for "wage rate" (may require login to view)
- ^
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.
- ^
U.S. Bureau of Labor Statistics.
"Earnings of Women and Men by Race and Ethnicity, 2007"
Accessed June 29, 2012
- ^
Asli Demirguc-Kunt, Michael Lokshin, Vladimir Kolchin (8 April 2023).
"Effects of public sector wages on corruption: Wage inequality matters"
. Journal of Comparative Economics.
{{
cite web
}}
: CS1 maint: multiple names: authors list (
link
)
- ^
"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
- ^
Tennant, Michael. "Minimum Wage The Ups & Downs." New American (08856540) 30.12 (2014): 10-16. Academic Search Complete. Web. 26 Feb. 2015.
- ^
"Living Wage Calculator"
.
livingwage.mit.edu
. Retrieved
2023-10-02
.
- ^
Aeppel, Timothy (August 29, 2022).
"North American companies send in the robots, even as productivity slumps"
.
Reuters
.
- ^
USC 26 § 3401(a)
Further reading
[
edit
]
- Galbraith, James Kenneth.
Created Unequal: the Crisis in American Pay
, in series,
Twentieth Century Fund Book[s]
. New York: Free Press, 1998.
ISBN
0-684-84988-7
External links
[
edit
]
Look up
wage
in Wiktionary, the free dictionary.
Wikimedia Commons has media related to
Wages
.
Wikiquote has quotations related to
Wage
.
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