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Following the recession of 2008 real wages globally have stagnated [6] with a world average real wage growth rate of 2% in 2013. Africa, Eastern Europe, Central Asia, and Latin America have all experienced real wage growth of under 0.9% in 2013, whilst the developed countries of the OECD have experienced real wage growth of 0.2% in the same period.
Wage growth (or real wage growth) is a rise of wage adjusted for inflations, often expressed in percentage. [1] In macroeconomics, wage growth is one of the main indications to measure economic growth for a long-term since it reflects the consumer's purchasing power in the economy as well as the level of living standards. [2]
nominal wage rate: $10 in year 1 and $16 in year 2 price level: 1.00 in year 1 and 1.333 in year 2, then real wages using year 1 as the base year are respectively: $10 (= $10/1.00) in year 1 and $12 (= $16/1.333) in year 2. The real wage each year measures the buying power of the hourly wage in common terms.
Labour economics seeks to understand the functioning and dynamics of the markets for wage labour. Labour is a commodity that is supplied by labourers , usually in exchange for a wage paid by demanding firms.
Wage rates were discussed in a criticism of Pigou. [47] In autumn 1933 Keynes's lectures were much closer to the General Theory, including the consumption function, effective demand, and a statement of 'the inability of workers to bargain for a market-clearing real wage in a monetary economy'. [48] All that was missing was a theory of investment.
Economists commonly use the term recession to mean either a period of two successive calendar quarters each having negative growth [clarification needed] of real gross domestic product [1] [2] [3] —that is, of the total amount of goods and services produced within a country—or that provided by the National Bureau of Economic Research (NBER): "...a significant decline in economic activity ...
By showing their workers that they will provide stable real wages, firms secure their loyalty. [1]: 384 Seeing implicit contracts as a poor basis for real wage rigidities, new Keynesian economists sought other explanations. [1]: 384 Efficiency wage theories explain why firms might pay their employees more than the market clearing rate.
In mainstream economic theories, the labour supply is the total hours (adjusted for intensity of effort) that workers wish to work at a given real wage rate. It is frequently represented graphically by a labour supply curve, which shows hypothetical wage rates plotted vertically and the amount of labour that an individual or group of ...