Determinant Factors Of Real Wages

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Introduction

In the previous post we've already discussed about the different types of wages. So, with that knowledge let us move to another small topic which is about factors influencing real wages. that means how the real wages can increase or decrease for a labour.

To read more about real wages: visit https://economics-subject.blogspot.com/2021/06/meaning-and-types-of-wages.html

Factors to influence or determine or change Real wages

an individual can have more real wages than others based on various reasons such as type of Job, Salary, Area of work, Reputation, etc. Let us now have a clear look on different aspects.

Price level 

Price level also determines the real wages. if price level is more, real wages 

are less and vice versa. Similarly if price level is less, real purchasing power of money will be high. So, Here the Price level refers to the value or cost of all goods and services for a period of time. when price level increases, we cannot purchase many goods which leads to decrease of purchasing power of money.

Method of payment

Apart from money wages, Labours get certain additional facilities 

provided by their management like free housing, free medical facilities, free education 

Facilities to their children, free transportation facilities etc. if such wages are high the real wages are 

also high. It is based on the reputation of the work, post, company.

Nature of work

Real wages are also determine by the risk, danger involved in the work. 

If the work is risky, The real wages will be low though money wages will be high. Risky works may give good reputation and money however, they cannot provide real wages.

Regularity of employment 

real wages depends upon the regularity of employment. If 

the job is permanent his real wage will be high even though his money wage is low. In 

case of temporary job his money wage will be high. But his real wage are low. In this case the status of employment is a main factor to influence real wages.

Conditions of work or (Working Environment) you can also write in other terms which can express same meaning or concept.

The condition of work also determines the real wage of a labourer. 

For example, Less duration of work, ventilation, light, fresh air, recreation facilities, etc. these 

conditions results in the high real wages. 

Friends, If these facilities are not available or provided, the money wage will be high for sure.

Subsidiary earnings 

It is the main factor to influence real wages. if a laborer earns more than his real wages, his real wages will be 

higher. 

For example, A Teacher may earn additional income by conducting  classes, tuitions, organizing meetings, etc Out of the institution privately.

Future prospects 

real wages set to be higher in those jobs ware there is a possibility of 

promotions, increase in wages etc. If there are more promotions and rewards in a job, automatically the real wages are also high.

Timely payment 

If a labour receives his payment in regularly and timely the real wage of 

the labour is high. Although his money wage is pretty less and vice versa. so, The method and period of payment is also a factor to change real wages.

Social prestige

The wages of chief minister and a teacher are almost equal. But chief minister 

has more real wages when compare to a teacher because of his social status. social prestige indirectly provides more real wages.

Period and expenses of education 

Period and expenses also effects real wage for 

example, If one person is a graduate and the other is under graduate were working as 

clerks the real wage of under graduate is high. Because his period of learning and 

expenses on education are lower than the graduate laborer. However, it also indirectly changes the real wages between employees in a firm/organization.

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The end

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