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Economics vocabulary · Jobs and Unemployment

Real wage

Meaning in economics, with examples

nounCommon term

In economics, real wage means: A wage measured by what it can actually buy, after adjusting for inflation; if prices rise faster than pay, real wages fall.

In Turkish: reel ücret

How it is used

Usually used in the plural: real wages rose, fell or stagnated. Economists compare real wage growth with productivity growth. The opposite is the nominal wage, the amount written on the payslip.

Example sentences

  1. Real wages fell last year because pay rises did not keep up with inflation.

  2. The union wants a deal that protects the real wage of its members.

Common collocations

  • real wage growth
  • real wages fell
  • real wage losses
  • protect real wages
  • wageThe money a worker is paid for their work, especially when it is calculated by the hour, day or week.
  • nominalMeasured in current money values without adjusting for inflation, such as a salary or a GDP figure expressed in today's prices.
  • in real termsMeasured after removing the effect of inflation, so that a figure shows the true change in what money can buy.
  • purchasing powerThe amount of goods and services that a sum of money or an income can buy; it falls when prices rise faster than incomes.
  • trade unionAn organisation of workers that negotiates with employers about pay, working hours and conditions on behalf of its members.

More terms: Jobs and Unemployment

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This page explains English vocabulary for learners. It is not financial advice.