Introduction to wage

Wage is defined as the price paid for the services rendered by the labourer in the production process. If wages are paid according to the amount or quantum of work done, it is called piece-wage. E.g. wage for weeding in one acre of paddy field. If wages are paid to a labourer who works for a fixed period of time, it is known as time wage. E.g. wage for weeding per labourer per day.

When payment is made in terms of cash or money, it is known as money wage or nominal wage. Real wage refers to the income of a worker in terms of real benefit. It refers to the amount of necessaries, comforts, and luxuries that a labourer can obtain in return for his services. Real wage refers to the purchasing power of money earned by the labourer or wages paid in terms of quantity of commodities. The standard of living of a labourer depends on his real wage. The following are the theories of wages: (i) Subsistence theory of wages, (ii) Wages Fund Theory, (iii) Marginal Productivity Theory of Wages, and (iv) Demand- Supply Theory of Wages.