The Kaitz index, devised in 1970 and named after Hyman Kaitz, is an economic indicator represented by the ratio of the nominal legal minimum wage to median wage adjusted for the industry-level coverage. [1] [2]
The Kaitz index, devised in 1970 and named after Hyman Kaitz, is an economic indicator represented by the ratio of the nominal legal minimum wage to median wage adjusted for the industry-level coverage. [1] [2]
A minimum wage is the lowest remuneration that employers can legally pay their employees—the price floor below which employees may not sell their labor. Most countries had introduced minimum wage legislation by the end of the 20th century. Because minimum wages increase the cost of labor, companies often try to avoid minimum wage laws by using gig workers, by moving labor to locations with lower or nonexistent minimum wages, or by automating job functions. Minimum wage policies can vary significantly between countries or even within a country, with different regions, sectors, or age groups having their own minimum wage rates. These variations are often influenced by factors such as the cost of living, regional economic conditions, and industry-specific factors.
The poverty threshold, poverty limit, poverty line, or breadline is the minimum level of income deemed adequate in a particular country. The poverty line is usually calculated by estimating the total cost of one year's worth of necessities for the average adult. The cost of housing, such as the rent for an apartment, usually makes up the largest proportion of this estimate, so economists track the real estate market and other housing cost indicators as a major influence on the poverty line. Individual factors are often used to account for various circumstances, such as whether one is a parent, elderly, a child, married, etc. The poverty threshold may be adjusted annually. In practice, like the definition of poverty, the official or common understanding of the poverty line is significantly higher in developed countries than in developing countries.
A wage is payment made by an employer to an employee for work done in a specific period of time. Some examples of wage payments include compensatory payments such as minimum wage, prevailing wage, and yearly bonuses, and remunerative payments such as prizes and tip payouts. Wages are part of the expenses that are involved in running a business. It is an obligation to the employee regardless of the profitability of the company.
A living wage is defined as the minimum income necessary for a worker to meet their basic needs. This is not the same as a subsistence wage, which refers to a biological minimum, or a solidarity wage, which refers to a minimum wage tracking labor productivity. Needs are defined to include food, housing, and other essential needs such as clothing. The goal of a living wage is to allow a worker to afford a basic but decent standard of living through employment without government subsidies. Due to the flexible nature of the term "needs", there is not one universally accepted measure of what a living wage is and as such it varies by location and household type. A related concept is that of a family wage – one sufficient to not only support oneself, but also to raise a family.
David Edward Card is a Canadian-American labour economist and the Class of 1950 Professor of Economics at the University of California, Berkeley, where he has been since 1997. He was awarded half of the 2021 Nobel Memorial Prize in Economic Sciences "for his empirical contributions to labour economics", with Joshua Angrist and Guido Imbens jointly awarded the other half.
Piece work or piecework is any type of employment in which a worker is paid a fixed piece rate for each unit produced or action performed, regardless of time.
Personal income is an individual's total earnings from wages, investment interest, and other sources. The Bureau of Labor Statistics reported a median weekly personal income of $1,139 for full-time workers in the United States in Q1 2024. For the year 2022, the U.S. Census Bureau estimates that the median annual earnings for all workers was $47,960; and more specifically estimates that median annual earnings for those who worked full-time, year round, was $60,070.
In the United States, the minimum wage is set by U.S. labor law and a range of state and local laws. The first federal minimum wage was instituted in the National Industrial Recovery Act of 1933, signed into law by President Franklin D. Roosevelt, but later found to be unconstitutional. In 1938, the Fair Labor Standards Act established it at 25¢ an hour. Its purchasing power peaked in 1968, at $1.60. In 2009, Congress increased it to $7.25 per hour with the Fair Minimum Wage Act of 2007.
Involuntary unemployment occurs when a person is unemployed despite being willing to work at the prevailing wage. It is distinguished from voluntary unemployment, where a person chooses not to work because their reservation wage is higher than the prevailing wage. In an economy with involuntary unemployment, there is a surplus of labor at the current real wage. This occurs when there is some force that prevents the real wage rate from decreasing to the real wage rate that would equilibrate supply and demand. Structural unemployment is also involuntary.
In economics, a monopsony is a market structure in which a single buyer substantially controls the market as the major purchaser of goods and services offered by many would-be sellers. The microeconomic theory of monopsony assumes a single entity to have market power over all sellers as the only purchaser of a good or service. This is a similar power to that of a monopolist, which can influence the price for its buyers in a monopoly, where multiple buyers have only one seller of a good or service available to purchase from.
In the United States, despite the efforts of equality proponents, income inequality persists among races and ethnicities. Asian Americans have the highest median income, followed by White Americans, Hispanic Americans, African Americans, and Native Americans. A variety of explanations for these differences have been proposed—such as differing access to education, two parent home family structure, high school dropout rates and experience of discrimination and deep-seated and systemic anti-Black racism—and the topic is highly controversial.
Wage theft is the failing to pay wages or provide employee benefits owed to an employee by contract or law. It can be conducted by employers in various ways, among them failing to pay overtime; violating minimum-wage laws; the misclassification of employees as independent contractors; illegal deductions in pay; forcing employees to work "off the clock"; not paying annual leave or holiday entitlements; or simply not paying an employee at all.
Alan Manning is a British economist and professor of economics at the London School of Economics.
The Fight for $15 is an American political movement advocating for the minimum wage to be raised to USD$15 per hour. The federal minimum wage was last set at $7.25 per hour in 2009. The movement has involved strikes by child care, home healthcare, airport, gas station, convenience store, and fast food workers for increased wages and the right to form a labor union. The "Fight for $15" movement started in 2012, in response to workers' inability to cover their costs on such a low salary, as well as the stressful work conditions of many of the service jobs which pay the minimum wage.
In economics, the wage ratio refers to the ratio of the top salaries in a group to the bottom salaries. It is a measure of wage dispersion.
The gift-exchange game, also commonly known as the gift exchange dilemma, is a common economic game introduced by George Akerlof and Janet Yellen to model reciprocacy in labor relations. The gift-exchange game simulates a labor-management relationship execution problem in the principal-agent problem in labor economics. The simplest form of the game involves two players – an employee and an employer. The employer first decides whether they should award a higher salary to the employee. The employee then decides whether to reciprocate with a higher level of effort due to the salary increase or not. Like trust games, gift-exchange games are used to study reciprocity for human subject research in social psychology and economics. If the employer pays extra salary and the employee puts in extra effort, then both players are better off than otherwise. The relationship between an investor and an investee has been investigated as the same type of a game.
The decoupling of median wages from productivity, sometimes known as the great decoupling, is the gap between the growth rate of median wages and the growth rate of GDP per person or productivity. Erik Brynjolfsson and Andrew McAfee highlighted this problem toward the end of the twentieth century and the beginning of the twenty-first century. This problem furthermore leads to wage stagnation for the median despite continued economic growth overall. Mathematically, if inequality grows, then top incomes and total income can increase even if median income is relatively stagnant.
 | This labor-related article is a stub. You can help Wikipedia by expanding it. |