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{{Short description|Payment by an employer to an employee for labour}}
{{Other uses}}
{{Globalize|1=article|2=United States|date=July 2024}}
{{Economics sidebar}}
{{Personal finance}}

A '''wage''' is payment made by an [[employer]] to an employee for [[work (human activity)|work]] done in a specific period of time. Some examples of wage payments include [[wiktionary:compensatory|compensatory]] payments such as ''[[minimum wage]]'', ''[[prevailing wage]]'', and ''yearly bonuses,'' and [[wiktionary:remunerative|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 [[salary|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 (remuneration)|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.

==Definition==
[[Wage labour]] involves the exchange of money for time spent at work. As [[Moses I. Finley]] lays out the issue in ''[[The Ancient Economy (book)|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.<ref>{{Cite book | publisher = University of California Press | isbn = 9780520024366 | last = Finley | first = Moses I. | title = The ancient economy | location = Berkeley | year = 1973 | page = 65 }}</ref>
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 [[clock]]s 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.<ref>{{Cite journal | issue = 38 | pages = 56–97 | last = Thompson | first = E. P. | title = Time, Work-Discipline, and Industrial Capitalism | journal = Past and Present | year = 1967 | jstor = 649749 | doi=10.1093/past/38.1.56}}</ref><ref>{{Cite book | publisher = University of Chicago Press | isbn = 9780226155104 | last = Dohrn-van Rossum | first = Gerhard | others = Thomas Dunlap (trans.) | title = History of the hour: Clocks and modern temporal orders | location = Chicago | year = 1996 }}</ref>
==History==
Wages were paid in the [[Middle Kingdom of Egypt|Middle Kingdom]] of ancient Egypt,<ref>{{Cite journal | issn = 1350-5084 | volume = 11 | issue = 4 | pages = 497–537 | last = Ezzamel | first = Mahmoud | title = Work Organization in the Middle Kingdom, Ancient Egypt | journal = Organization | date = July 2004 | doi=10.1177/1350508404044060| s2cid = 143251928 }}</ref> [[ancient Greece]],<ref name=FinleyAE>{{Cite book | publisher = University of California Press | isbn = 9780520024366 | last = Finley | first = Moses I. | title = The ancient economy | location = Berkeley | year = 1973 }}</ref> and ancient Rome.<ref name=FinleyAE /> Following the unification of the [[List of cities of the ancient Near East|city-state]]s in [[Assyria]] and [[Sumer]] by [[Sargon of Akkad]] into a [[Akkadian Empire|single empire]] ruled from his [[Akkad (city)|home city]] circa 2334 BC, [[Ancient Mesopotamian units of measurement|common Mesopotamian standards]] for [[length]], [[area]], [[volume]], [[weight]], and [[time]] used by [[artisan]] [[guild]]s were promulgated by [[Naram-Sin of Akkad]] (c. 2254–2218 BC), Sargon's grandson, including [[shekel]]s.<ref name="Powell 1995, p.1955">{{Cite book|last=Powell|first=Marvin A.|contribution=Metrology and Mathematics in Ancient Mesopotamia|year=1995|title=Civilizations of the Ancient Near East|editor-last=Sasson|editor-first=Jack M.|volume=III|page=[https://archive.org/details/isbn_9780684192796/page/1955 1955]|place=New York, NY|publisher=Charles Scribner's Sons|isbn=0-684-19279-9|url-access=registration|url=https://archive.org/details/isbn_9780684192796/page/1955}}</ref> [[Code of Hammurabi#Laws|''Codex Hammurabi'' Law 234]] (c. 1755–1750 BC) stipulated a 2-shekel [[prevailing wage]] for each 60-[[Ancient Mesopotamian units of measurement#Capacity or volume|gur]] (300-[[bushel]]) [[Merchant vessel|vessel]] constructed in an [[employment contract]] between a [[Shipbuilding|shipbuilder]] and a [[ship-owner]].<ref name="Sommer 1903 p. 85">{{cite journal|translator-last=Sommer|translator-first=Otto|author=Hammurabi|author-link=Hammurabi|title=Code of Hammurabi, King of Babylon|year=1903|journal=Records of the Past|place=[[Washington, D.C.|Washington, DC]]|publisher=[[Records of the Past Exploration Society]]|volume=2|issue=3|page=[https://archive.org/details/cu31924060109703/page/n25/mode/2up 85]|access-date=June 20, 2021|url=https://archive.org/details/cu31924060109703/mode/2up|quote=234. If a shipbuilder builds ... as a present [compensation].}}</ref><ref name="Harper 1904 p. 85">{{cite web|translator-last=Harper|translator-first=Robert Francis|author=Hammurabi|author-link=Hammurabi|year=1904|title=Code of Hammurabi, King of Babylon|place=[[Chicago]]|publisher=[[University of Chicago Press]]|edition=2nd|page=[https://oll.libertyfund.org/title/hammurabi-the-code-of-hammurabi#lf0762_label_457 83]|website=[[Liberty Fund]]|url=https://oll-resources.s3.us-east-2.amazonaws.com/oll3/store/titles/1276/0762_Bk.pdf|access-date=June 20, 2021|quote=§234. If a boatman build ... silver as his wage.}}</ref><ref name="King 1910">{{cite web|translator-last=King|translator-first=Leonard William|author=Hammurabi|author-link=Hammurabi|year=1910|title=Code of Hammurabi, King of Babylon|place=[[New Haven, Connecticut|New Haven, CT]]|publisher=[[Yale Law School]]|website=[[Avalon Project]]|url=https://avalon.law.yale.edu/ancient/hamframe.asp|access-date=June 20, 2021}}</ref> Law 275 stipulated a [[ferry]] [[Price|rate]] of 3-[[gerah]] per day on a [[charterparty]] between a [[Chartering (shipping)|ship charterer]] and a [[Sea captain|shipmaster]]. Law 276 stipulated a 2{{frac|1|2}}-gerah per day [[freight rate]] on a [[Affreightment|contract of affreightment]] between a charterer and shipmaster, while Law 277 stipulated a {{frac|1|6}}-shekel per day freight rate for a 60-gur vessel.<ref name="Sommer 1903 p. 88">{{cite journal|translator-last=Sommer|translator-first=Otto|author=Hammurabi|author-link=Hammurabi|title=Code of Hammurabi, King of Babylon|year=1903|journal=Records of the Past|place=[[Washington, D.C.|Washington, DC]]|publisher=[[Records of the Past Exploration Society]]|volume=2|issue=3|page=[https://archive.org/details/cu31924060109703/page/n29/mode/2up 88]|access-date=June 20, 2021|url=https://archive.org/details/cu31924060109703/mode/2up|quote=275. If anyone hires a ... day as rent therefor.}}</ref><ref name="Harper 1904 p. 95">{{cite web|translator-last=Harper|translator-first=Robert Francis|author=Hammurabi|author-link=Hammurabi|year=1904|title=Code of Hammurabi, King of Babylon|place=[[Chicago]]|publisher=[[University of Chicago Press]]|edition=2nd|page=[https://oll.libertyfund.org/title/hammurabi-the-code-of-hammurabi#lf0762_label_497 95]|website=[[Liberty Fund]]|url=https://oll-resources.s3.us-east-2.amazonaws.com/oll3/store/titles/1276/0762_Bk.pdf|access-date=June 20, 2021|quote=§275. If a man hire ... its hire per day.}}</ref><ref name="King 1910" />

==Determinants of wage rates==
{{See also|Efficiency wage}}
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.

===Wage differences===
{{See also|Gender pay gap|Wage theft}}

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.<ref>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.</ref> Similarly, white men made about 84% the wage of Asian men, and black men 64%.<ref>U.S. Bureau of Labor Statistics. [http://www.saylor.org/site/wp-content/uploads/2012/06/ECON303-8.1.2.1.pdf "Earnings of Women and Men by Race and Ethnicity, 2007"] Accessed June 29, 2012</ref> These are overall averages and are not adjusted for the type, amount, and quality of work done.

==Effects==
===Corruption===
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.
<ref>
{{Cite journal
|url=https://www.sciencedirect.com/science/article/abs/pii/S014759672300029X
|title=Effects of public sector wages on corruption: Wage inequality matters
|date=8 April 2023 
|author=Asli Demirgüç-Kunt, Michael Lokshin, Vladimir Kolchin
|journal=Journal of Comparative Economics
|volume=51
|issue=3
|pages=941–959
|doi=10.1016/j.jce.2023.03.005
|hdl=10986/35521
|accessdate=
|hdl-access=free
|url-access=subscription
}}
</ref>

==Wages in the United States==
[[Image:US Real Wages 1964-2004.gif|thumb|Historical graph of [[real wages]] in the US from 1964 to 2005]]
[[File:Wages in the United States.webp|thumb|Wages in the United States
{{legend-line|#5E5E5E solid 3px|[[Nominalism|Nominal]] wages}}
{{legend|#0094EC|outline=#0076BA|[[Adjusted-for-inflation|Adjusted for inflation]] wages}}
]]
{{See also|Minimum wage|Minimum wage in the United States}}
Seventy-five million workers earned hourly wages in the United States in 2012, making up 59% of employees.<ref>"Employees" as a category excludes all those who are self-employed, and this statistics only considers workers over the age of 16. {{Citation | last = U.S. Department of Labor. Bureau of Labor Statistics | title = Characteristics of Minimum Wage Workers: 2012 | date = 2013-02-26 }}</ref> In the [[United States]], wages for most workers are set by [[Supply and demand|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|living wage rate]] which account for living expenses and other basic necessities, setting the living wage rate much higher than current [[minimum wage law]]s require. The minimum wage rate is there to protect the well being of the working class.<ref>Tennant, Michael. "Minimum Wage The Ups & Downs." New American (08856540) 30.12 (2014): 10-16. Academic Search Complete. Web. 26 Feb. 2015.</ref>
[[File:Living_wage_by_state.png|thumb|A [[heat map]] of the United States by [[living wage]] for a single, childless individual according to the [[Massachusetts Institute of Technology|MIT]] living wage calculator as of 2023<ref>{{Cite web |title=Living Wage Calculator |url=https://livingwage.mit.edu/ |access-date=2023-10-02 |website=livingwage.mit.edu}}</ref>{{legend|#1E90FF;|$15–15.99}}{{legend|#B0E0E6;|$16.00–16.99}}{{legend|#FFFF00;|$17.00–17.99}}{{legend|#FF8C00;|$18.00–18.99}}{{legend|#FF0000;|$19.00–19.99}}{{legend|#000000;|$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.<ref>{{cite news|url=https://www.reuters.com/technology/north-american-companies-send-robots-even-productivity-slumps-2022-08-29/|title=North American companies send in the robots, even as productivity slumps|newspaper=Reuters |date=August 29, 2022|last1=Aeppel |first1=Timothy }}</ref>

==Definitions==
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 [[employment#U.S. Law|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 [[employment#U.S. Law|employee]] for his employer," the definition goes on to list 23 exclusions that must also be applied.<ref>USC 26 § 3401(a)</ref>

== See also ==
{{div col}}
* [[Compensation of employees]]
* [[Employee benefit]] (non-monetary compensation in exchange for labor)
* [[Employment]]
* [[Income tax]]
* [[Labour economics]]
* [[List of countries by average wage]]
* [[Labor power]]
* [[List of sovereign states in Europe by net average wage]]
* [[Marginal factor cost]]
* [[Overtime]]
* [[Performance-related pay]]
* [[Price elasticity of supply]]
** [[Frisch elasticity of labor supply]]
* [[Proletarian]]
* [[Real wages]]
* [[Wage labour]]
* [[Wage share]]
* [[Wage slavery]]
* [[Working class]]
{{Div col end}}

==References==
{{Reflist|2}}

==Further reading==
* 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==
{{Wiktionary|wage}}
{{Commons category|Wages}}
{{Wikiquote}}
* {{cite encyclopedia |last1=Lebergott |first1=Stanley |author-link= Stanley Lebergott |editor= David R. Henderson |editor-link= David R. Henderson |encyclopedia=[[Concise Encyclopedia of Economics]] |title=Wages and Working Conditions |url=http://www.econlib.org/library/Enc1/WagesandWorkingConditions.html |year=2002 |edition= 1st |publisher=[[Library of Economics and Liberty]] }} {{OCLC|317650570|50016270|163149563}}
* [http://www.bls.gov/bls/blswage.htm U.S. Bureau of Labor Statistics]
* [http://www.bibliomania.com/2/1/65/112/frameset.html Wealth of Nations] – click Chapter 8
* [https://web.archive.org/web/20070625194442/http://www.dol.gov/esa/minwage/america.htm U.S. Department of Labor: Minimum Wage Laws] – Different laws by State
* [https://web.archive.org/web/20060926150028/http://www.usda.gov/nass/graphics/data/fl_allwg.txt Average U.S. farm and non-farm wage]
* [http://libraryguides.missouri.edu/pricesandwages Prices and Wages by Decade library guide] – Prices and Wages research guide at the University of Missouri libraries

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