Wage share

Wage share

The wage share is the ratio between compensation of employees (according to the system of National accounts) and one of the following variables:

#gross domestic product at market prices
#gross domestic product at factor cost.
#net domestic product at factor cost (domestic income at factor cost)In order that the wage share reflects only changes in relative incomes and not changes of the composition of employment in "employees" and "number of self-employed", often an adjustment is made. In this case the "adjusted wage share" is:

compensation of employees per employee

divided by one of the following:

#gross domestic product at market prices per number of persons in employment (this adjusted wage share is also called "real unit labour costs").
#gross domestic product at factor cost per number of persons in employment
#net domestic product at factor cost (domestic income at factor cost) per number of persons in employment

The wage share is a (rough) indicator for the distribution of income between "capital" and "labour". In the short term it moves countercyclically to the business cycle.

Criticism

The main criticism of the wage share concept is simply that it does not accurately describe the share-out of income between employers and employees. The reason is that the incomes included in the ratio are those which conform to the concept of value added.

Compensation of employees is not the same as the disposable real income that workers get, and Operating surplus is not the same as real profits realised by enterprises. Consumption of fixed capital, another component of GDP, is measured at economic depreciation rates, which may diverge from real income obtained from depreciation write-offs. Finally, the indirect taxes net of subsidies included in GDP are only those which are regarded as direct imposts on production. In summary, GDP only very selectively measures total income flows - disregarding transfer income, property income and capital gains, land rents, subsoil rents and a fraction of net interest. As a result, the value of the share of wages in the product may be overstated, particularly if taxes on consumption increase as well.

ee also

*Labour
*Rate of exploitation
*Value added
*Value product
*Wage

External links

* [http://europa.eu.int/comm/economy_finance/indicators/annual_macro_economic_database/ameco_contents.htm ameco data base of European Commission staff offices]
* [http://www.imf.org/external/pubs/ft/weo/2007/01/pdf/c5.pdf Englisch (pdf): International Monetary Fund, Economic Outlook "Spillovers and Cycles in the Global Economy", April 2007, Chapter 5 The Globalization of Labor. With some international data or graphs on the wage share.]


Wikimedia Foundation. 2010.

Игры ⚽ Нужен реферат?

Look at other dictionaries:

  • Wage — For other uses, see WAGE (disambiguation). A wage is a compensation, usually financial, received by workers in exchange for their labor. Compensation in terms of wages is given to workers and compensation in terms of salary is given to employees …   Wikipedia

  • Wage slavery — is a term first coined by the Lowell Mill Girls in 1836, [ [http://books.google.com/books?id=YXT kSv1btIC pg=PA87 lpg=PA87 dq=lowell+%22wage+slavery%22 source=web ots=WsT3bkI 0G sig=w7N0JGBskFiUHReS 00amVMNaPY hl=en Artisans Into Workers: Labor… …   Wikipedia

  • wage — [wāj] vt. waged, waging [ME wagen < NormFr wagier (OFr gagier) < wage (OFr gage), a stake, pledge < Frank * wadi, akin to Goth wadi, a pledge: for IE base see WED] 1. to engage in or carry on (a war, struggle, campaign, etc.) 2. [Dial.,… …   English World dictionary

  • wage — n 1: a payment usu. of money for labor or services usu. according to a contract and on an hourly, daily, or piecework basis often used in pl. 2 pl: the share of the national product attributable to labor as a factor in production Merriam… …   Law dictionary

  • wage fund — wage fund, wages fund or wages fund theory noun The former theory that there is at any given time in a country a determinate amount of capital available for the payment of labour, therefore the average wage depends on the proportion of this fund… …   Useful english dictionary

  • wage — / wages [n] earnings for work allowance, bacon*, bacon and eggs*, bread*, compensation, cut, emolument, fee, hire, pay, payment, price, receipts, recompense, remuneration, return, returns, reward, salary, share, stipend, sugar*, take*, take… …   New thesaurus

  • wage and salary — ▪ economics Introduction       income derived from human labour. Technically, wages and salaries cover all compensation made to employees for either physical or mental work, but they do not represent the income of the self employed. Labour costs… …   Universalium

  • wage — wageless, adj. wagelessness, n. /wayj/, n., v., waged, waging. n. 1. Often, wages. money that is paid or received for work or services, as by the hour, day, or week. Cf. living wage, minimum wage. 2. Usually, wages. Econ. the share of the… …   Universalium

  • wage — /weɪdʒ / (say wayj) noun 1. (often plural) that which is paid for work or services, as by the day or week; hire; pay. 2. (plural) Economics the share of the products of industry received by labour for its work, as distinct from the share going to …  

  • wage — I. noun Etymology: Middle English, pledge, recompense, from Anglo French wage, gage, of Germanic origin; akin to Old High German wetti pledge more at wed Date: 14th century 1. a. a payment usually of money for labor or services usually according… …   New Collegiate Dictionary

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”