In very simple words, the remuneration that is made for the service of the labour is called wages. Wage payment is essentially the price paid for the particular commodity viz labour. Berham defines wages as:
“Sum of money paid under contract by an employer to a worker for the service rendered.”
Forms of Wages
Broadly speaking, wages are categorized as:
1. Normal Wages
Normal or money wages are the wages paid or received by the labour in terms of money . Money is the principle factor in normal or money wages. The wages are calculated in terms of money in this regard.
2. Real Wages
Real wages refer to the income of a worker in terms of real benefits. E.g. bonuses, holidays, transport.
In other words, the value of additional income is called real wages. It is the real wages that enable us to clear that the worker really earns.