Wage also known as salary is the amount of pay that an individual receives upon successful completion of a task or service. This salary that he individual gets is received as reimbursement for his or her efforts. There may be also entitled to certain benefits such as sick leaves, accommodation allowance, paid travel expenses that are known as fringe benefits.
There are basically two kinds of wages that employees are entitled to. The first is money wages also known as nominal wages that are paid to persons based on the agreement that was agreed between them and the employer at the time of employment regardless of the inflation rates that are currently being experienced in the economy. On the other hand, real wage is a salary system that takes into account the inflation rate based on the employees resultant purchasing power.
Money wages as explained do not take into consideration the inflation rates. It is the most common form of payment across the globe and it encompasses the whole salary package. This is the basic salary plus any fringe benefits that the employee might be entitled to . Money is paid based on the promises and agreements that were made at the beginning of the hiring process. When there is an increase in wages it is also not dependant on the inflation rates but the employee either as a result of promotion or good performance.
Real wage is system is not as common as one would expect. They determine the purchasing power of the individual when pay is being made and seeing how much the employee can obtain in the current economic trends and situations.
