Difference Between Money Wages And Real Wages In Tabular Formulas
Difference Between Money Wages And Real Wages In Tabular Format
Difference Between Money Wages And Real Wages In Tabular Formula

Real wages are the wages which take inflation rate into consideration. On the other hand, Nominal wages are simply the amount given as wages. Wage garnishments are tough. The government or some third party sends you a notice, sometimes with a court order, to reduce the wages of one of your trusted employees and then send the difference. Some employees may see a difference between Box 1 Federal Wages and Box 16 State Wages due to the value of certain pre-tax transportation benefits. If you find that after making these adjustments to your Gross Pay YTD per your final pay stub, the result does not match Box 1 Federal Wages and Box 16 State Wages on your W-2, call Central Payroll. Step 2: Subtract the applicable minimum wage for your pay period (the amount from Step 1) from the employee’s disposable earnings for that pay period. Step 3: If the amount from Step 2 is zero or less than zero, do not withhold any money from the employee’s earnings. You are done with the calculation.

We may receive compensation from some partners and advertisers whose products appear here. That’s how we make money. Compensation may impact where products are placed on our site, but editorial opinions, scores, and reviews are independent from the advertising side of The Blueprint and our objectivity is an integral part of who we are. Our commitment to you is complete honesty: we will never allow advertisers to influence our opinion of products that appear on this site.

From time to time, you mat need to garnish your employees' wages. The Blueprint shows you when this is necessary and how to calculate the number.

The followings are some of the causes of difference in wages:

1. Difference in efficiency:

All persons are not equally efficient. They differ in abilities, efficiency, skill and attitude. Some people are more efficient and some are not efficient at all. An efficient worker gives better output than others. Different types of work require different abilities. Efficiency requirement in jobs varies from occupation to occupation. For example, the job of a District Magistrate requires more efficiency and responsibility than a clerk. The efficiency of a doctor is more than a nurse. Such differences in abilities, intelligence, efficiency and responsibility account for differences in wages in different occupations.

2. Immobility of labour:

Labour is generally immobile. The presence of non-competing groups in society makes the labour more immobile. Sometimes people are not prepared to accept higher wages if it involves a change of place. Transport difficulties also play a vital role in the immobility of labour. Political barriers against the free movement of labour from one country to another result in the difference in wages in different countries.

3. Presence of non-competing group:

ADVERTISEMENTS:

There are different groups of labour which are not competitive. These are called non-competing groups of labour. In our country this is generally due to caste system. The work of one caste cannot be done by others. For example, a sweeper finds difficulty in getting the work which is meant for higher classes. Different occupations require labour of various qualities. The work of a doctor is different from that of an engineer.

The teacher cannot do the work of a lawyer. So people belonging to a particular group can only compete for that work. For this reason, a sweeper cannot apply for the post of a District Magistrate. Poverty is also another reason which creates non-competing groups in society. The children of a labourer have very little opportunity of getting high paid jobs. The existence of non-competing groups prevents mobility of labour and thereby creates difference in wages.

4. Nature of work:

The nature of work influences the wage differences. Dangerous, disagreeable, hazardous and risky work carry higher money wages to attract larger supply of labour. For example, The labour working in the coal mines are getting more wages than a peon in the office. Soldiers are getting more wages than ordinary police personnel. The salary of the mining engineer is more than a civil engineer. Safe, pleasant, comfortable and occupation of greater risk gives higher wages.

5. Training and extra qualification:

Trained and skilled workers get more wages than ordinary workers. Extra qualifications and special training demand higher wages for a job. If an occupation requires expensive specialized training high wages will be offered.

6. Steadiness of employment:

If work in an occupation is seasoned or irregular, higher wages will be offered whereas in regular employment low wages are given. The wage rate is lower in government jobs than in companies or private sectors.

Difference Between Money Wages And Real Wages In Tabular Formulas

7. Future prospects:

If future promotion prospects in a job are better, then the initial wages are low. People prefer this type of future prospective jobs, though the wage rate is lower. On the other hand, wages are higher in the jobs where there is no future prospects.

8. Presence of labour unions:

ADVERTISEMENTS:

Wages in different occupations like factories, mines, companies are determined by the bargaining strength of labour unions. If the labour union is strong enough, the workers are getting higher wages.

9. Scope for extra earnings:

If the job has a scope for supplementary earnings, the regular income may be lower. For example, a doctor may accept the job with lower wage, because he can do private practice.

10. Wages of women:

Wages paid to women are less than men Specially a male labourer is getting more wages than a female labourer. This is only seen in contract manual labourer. But this case is not seen in other government and private sector occupation. For example, doctors, teachers, office workers, engineers, IT workers in companies etc.

Difference Between Money Wages And Real Wages In Tabular Format

11. Experience:

Experienced workers are normally paid more than the less experienced or inexperienced workers. It is through experience that man gradually knows things. Experience makes the worker wiser and more perfect. Therefore, everywhere experience counts and is being rewarded. Differences in wage rates exists due to varying experiences of different workers.