Real Wages


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Real Wages

The wages that a person earns or that a company pays after adjusting for inflation. For example, if an employee makes $25,000 per year in both Year 1 and Year 2, but the inflation rate is 10%, that $25,000 is only worth 90% of its previous value ($22,500) in Year 2. This is good for the employer, but bad for the employee.
References in periodicals archive ?
In a 2018 report, the World Bank said that improving the link between labor productivity and real wage growth would also be critical in reducing poverty.
Qatar and Lebanon are both predicted to see a drop in real wages, with Qatar forecast to have a -0.5 per cent loss in real wages, and Lebanon to have a -1.7 loss in real wages.
Elsewhere in the Middle East, incomes will also move slower, with Lebanon forecast to see a drop of 1.7 per cent in real wages. This is compared to 1.8 per cent growth in Lebanon last year and 6.1 per cent growth the year before.
This is the lowest growth in real wages since the financial crisis in 2008.
The next worst affected area in the region was South Tyneside, down 7% or PS28 a week, then Sunderland where real wages have dropped by 5%, or PS22 a week.
In analyzing wage growth, the report finds that in advanced G20 countries real wage growth declined from 0.9 per cent in 2016 to 0.4 per cent in 2017.
"From 2001 to 2016, labor productivity grew by at least 50 percent, yet the real wages did not grow at all.
The paradox of slow capital accumulation with a rising profit share may be explained by different factors: a depressed domestic market due to the stagnation of real wages; a wedge between profit share and profit rate; a reduction in relative profitability caused by the fall in the US manufacturing labour share
The growth in real wages, ongoing since early this year, is set to shore up consumer demand throughout 2018.
The figures, calculated by ETUI from independent data published in February 2018, aim to reflect the value of earnings - known as "real wages" - after inflation and living costs have been taken into account.