MEANING AND FACTOR AFFECTING OF WAGES

 

MEANING AND FACTOR AFFECTING OF WAGES


MEANING AND DEFINITION OF WAGES


Wages means the payment that is made by an employer to his workers or employees as remuneration of the work that they have rendered for the employer. This remuneration may be weekly, fortnightly or monthly. Thus, wage means any monetary amount given by an employer to his employees for their services, Wages have been defined as follows


"Wages are the compensation of wage earners,   the numerous employees who use the tools and equipment of their employers to produce goods and services that are sold by the employers,'

Ifoder and Heneman,


"Wages are a sum of money paid under contract by an employer to a worker for the services rendered."

Benham,


 Thus, it may be concluded that wages are the returns paid by an employer to his employees for their services. It includes allowances also. Wage may be daily, weekly, fortnightly or monthly.



FACTORS AFFECTING WAGES OR WAGE CRITERIA



The following are the factors which affect the determination of wages:


1. Demand and Supply of Labour: 

If the supply of labour is less than its demand, the rate of wages will be high. If the supply of labour is more than its demand, the rate of wages will be low.


2. Productivity of Labour:

If the productivity of labour is high, the rate of wages will also be high and the productivity of workers is low, the rate of wages will also be low.


3. Ability of the firm to pay:

The firms which are financially sound can pay their employees wages at a higher rate. Trade Union If the workers are united, their bargaining power becomes high and they can get a higher rate of wages. If the labour unions are not so strong, the rate of wages will be low.


5. Cost of Living:

If the cost of living is high, the rate of wages will be high, and if the cost of living is low, the cost of wages will also be low.


6. Job requirements:

If the job involves a great amount of risk, responsibility and a great amount of knowledge and skill, it will be paid at a higher rate. Jobs which do not involve so much risk and responsibility will be paid at a lower rate.


7. Government interference:

When the Government determines the minimum rate of wages, business and industrial enterprises cannot pay at a lower rate.


8. Present Rate of Wages:

The business and industrial enterprise has to consider its present rate of wages also at the time of determination of wage rate. It has to consider the rates of wages of other enterprises of the same nature. It is also affected by the rates of wages prevailing in the country as a whole.


FAQ

Ques- What do you understand by 'wages'?

Ans- Wages means the payment that is made by an employer to his workers or employees as remuneration of the work that they have rendered for the employer.



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