Q.Write a short note on: Real wages

Real wages are the purchasing power of money wages — the actual quantity of goods and services a worker can buy with his wages. They depend on the amount of money wages and the price level, and reflect the worker's true standard of living. ## Meaning Money wages (nominal wages) are wages paid in terms of money. Real wages are the goods and services that these money wages can actually buy — i.e. the purchasing power of money wages. Real wages depend on: - the amount of money wages, and - the general level of prices of goods and services. If money wages rise but prices rise in the same proportion, real wages remain unchanged. If prices rise faster than money wages, real wages fall. Besides prices, real wages also depend on additional benefits (free housing, allowances), regularity of work and the conditions of work. Real wages, not money wages, measure the true welfare and standard of living …