Real Wage 2
Real Wage 2 : The goods and services that can actually be purchased with money wages. Real wages thus express the purchasing power of the actual income earned by an individual. When prices increase faster than money wages, the purchasing power of wages declines, workers have less disposable income and thus real wages fall. On the other hand, real wages (i.e. purchasing power) will rise when prices fall while wages remain stable, when wages increase but prices remain unchanged or when both wages and prices rise but wages rise at a faster rate than prices. See: Wage; Wage indexation; Wages policy
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