THE DEFINITION AND FACTORS DETERMINING REAL WAGES:
Real Wages:
Since the monetary wage or nominal wage does not accurately reflect the economic condition of a worker, it is important to examine the real wage. Real wages refer to the total amount of goods and services available to a worker in exchange for his services. It is of central importance in determining the quality of life of an individual, class, society, economy and people there. So the real wage includes all the benefits and privileges that a worker gets in the form of money or other benefits or in both cases. For example, a college guard gets a monthly salary of Rs.400. For this, he has free housing, electricity, water and free medical assistance for treatment, so besides his real salary which is four hundred rupees, all these facilities will also be counted.
Factors
Determining Real Wages:
Real wages depend on many factors. The following are
particularly noteworthy among them:
1:-Purchasing Power of Money Earnings:
When the growth of wages in different professions and in different places is evaluated, the purchasing power of money must be taken into account, that is, a unit of money, for example, one hundred rupee in a village in has more purchasing power than in a city. Thus, the same hundred rupee not have the same value or purchasing power in this era, as the same hundred rupees did in 1960. Therefore, the higher the purchasing power of the currency, the higher the real wage, and the lower the purchasing power of the currency, the lower the real wage.
2:-Opportunities
of Extra:
Subsidiary income refers to the benefit or income over
and above the actual wage that a worker receives because of his work, for
example, a domestic worker besides his salary, receives accommodation, eats and
does the work for another family and earns extra money. In the same way when a professor
gets money by taking extra tuition classes, is included in his real income.
3:-
further work without wages:
If in a department more work is done without pay than the
fixed hours, to that extent the real wages of that worker will be reduced, for
example, if an officer in charge of a department is busy with work after the
duty hours and his peon is also doing his duty. Obviously, the real wages of
both is low because they are doing their work after the duty hours.
4:-Regularity
of employment:
Regular or irregular employment also affects real wages.
Permanent and regular employment leads to higher real wages of a worker and
temporary or irregular employment leads to lower real wages. For example, the
employment of employees of government, semi-government departments or banks is
permanent and regular in nature, so their real wages will also be higher. On
the contrary, since the persons employed in a shop, firm or private institution
are temporary, their nominal wages are undoubtedly slightly higher than those
of government or semi-government employees, but their real wages are lower.
5:-Nature of Work:
In order to correctly estimate the salary of an
individual, it is also important to know his working hours, working
environment, nature of work. The attitude of the employer towards his employees
and the working conditions should be taken into account, for example, if the
attitude of the employer is sympathetic, compassionate or God-fearing, the
working environment is good, there are no harmful effects on health. The
timings are appropriate, the nature of the work is also correct, and if he is considered
good in society, If so, the real wage of this individual will be higher.
6:-Opportunities
of Promotion:
Real wages in this sector will be higher if there is
sufficient opportunity for future growth, and where there is no future growth
opportunity, a relatively high wage will also reflect a lower real wage.
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