A wage is the price paid for the use of services of labor per unit of time (per hour, per day, and so on). A wage is an amount of money paid to a worker for some specified quantity of labour. When expressed with respect to time, it is typically called the wage rate.
The wage rate is the pre-tax amount paid per unit of labour. It is often the main monetary item that the worker and the employer focus on.
For example, in the United States, as of 2004, the prevailing wage rate for manual labour might range from $10 up to $70 per-hour, depending on the type of work and its location.
In addition to the hourly figure above, the employer usually offers other a fringe benefit package, possibly including pension arrangements, the notice period, holiday entitlement, required hours of work, health insurance benefits and retirement conditions. All of the above, including the wage rate, are usually described in an employment contract that is agreed between the employer and employee at the commencement of the period of employment.
Depending on the structure and traditions of different economies around the world, wage rates are either primarily market-driven (the USA) or influenced by other factors such as tradition, social structure and seniority, as in Japan.
In several countries around the world there is a statutory minimum wage rate that has been introduced to prevent the exploitation of low-paid workers. Some people believe that the effect of introducing a minimum wage is to discourage the employment of people who, in the absence of the statutory minimum wage, would have earned a wage below the introduced minimum.
