1 Explain why the general level of wages is high in the Unit

1. Explain why the general level of wages is high in the United States and other industrially advanced countries. What is the single most important factor underlying the long run increase in average real.wage rates in the United States?

Solution

There is a different way to distinguish between both the general and the real wages.The nominal wage is paid hourly wise and this wage doesn’t give a adjustment for the inflation which shows the rise in the value of the general price.The real wage is on the other hand that take inflation into account.Increase in the real wage leads to a show stating that there has been a rise in the inflation The nominal wage is the wage measured in dollars in the United States.The real wage is the nominal wage and its adjusted for purchasing power.The nominal minimum wage is set by the government.The real minimum wage is determined by the nominal minimum wage.

The level of the real wages and the employment is determined by the labour market method.when the real wages are looked at as a service where goods and service can be bought this can also lead to unadjusted wages and the general level of wages is high in the industralized countries is due to the demand for labour is high compared to the labor supply and the single most important factor underlying the long run is the increasing in the side of the labor productivity.There are various factors corresponding to these insights of the labor and the way of their productivity.