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A wage is the amount of money paid for some specified quantity of labour. When expressed with respect to time (usually per hour), it is typically called the wage rate, and is specified in pre-tax amounts. It is often the main monetary item upon which the worker and the employer focus when negotiating an employment contract. Early forms of wages included salt (from which the word salary is derived). In modern English, the word salary tends to be used when referring to employment in which the employee is not paid by the hour. Depending on the structure and traditions of different economies around the world, wage rates are either primarily market-driven (the USA) or influenced by other factors such as tradition, social structure and seniority, as in Japan. Several countries have enacted a statutory minimum wage rate in an attempt to prevent the (some say supposed) exploitation of low-paid workers. Henry C.K. Liu observes that the massive outsourcing of labor-intensive jobs in today's globalized economy, from advanced economies with high-wages to developing economies of large low-wage population pushes down wages and benefits in all economies Liu sees the development as a fundamental imbalance between the bargaining power of capital and that of labor because what passes for free trade is in reality a one way flow that allows capital to move to where its can get the highest return, while restricting labor from going to where they are needed most. Falling wages reduces aggregate consumer demand and lead to economic contraction in a global post-industrial economy saddled with structural overcapacity. Liu proposes an Organization of Labor-Intensive Exporting Countries (OLEC) on the model of the petroleum exporting countries' OPEC, to re-establish the balance the market power between labor and capital for the good of the entire global economy.
EtymologyWage derives from words suggesting making a promise, often in monetary form. Specifically from the Old French word wagier or gagier meaning to pledge or promise, from which the money placed in a bet (wager) also derives. These in turn may derive from the French gage to wager, the Gothic wadi, or the Late Latin wadium, also meaning "a pledge". Wages in the United StatesIn the United States, wages for most workers are set by market forces, or else by collective bargaining, where a labor union negotiates on workers' behalf. The Fair Labor Standards Act requires a minimum wage at the Federal level although states and cities can and sometimes do set their own higher minimum. For certain Federal or State Government contacts, employers must pay the so-called prevailing wage as determined according to the Davis-Bacon Act or its State equivalent. Activists have also undertaken to promote the idea of a living wage higher than current laws require. See also
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