There are several factors other than money wage which affect real wages. These are as follows.
(1) Purchasing power of money or price level:
Purchasing power of money or Price level is the main determinant of the level of real wage. Other thing remaining the same, higher is the price level, lower is the purchasing power money and vice-versa.
Purchasing power of money refers to quantity of goods and services purchased by exchanging unit of money. When purchasing power increases we can purchase more quantity of goods and services and vice-versa.
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(2) Scope for extra income:
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If there is scope for extra income like private practice of a doctor or private coaching for a teacher, then the real wage will be higher. But if a worker has no scope for extra income then his real wage will be low.
(3) Additional benefits:
There are certain special benefits and fringe benefits in some job. These facilities play an important role in determining real wage. The additional benefits such as free quarters, free medical facilities, free fooding, annual bonus, pension, provident, insurance etc. increases the real wage of a worker.
(4) Current trade of expenses:
If the current trade expenses of a worker are more like a lawyer who always purchase books his real wage will be lower in comparison to another worker where such trade expenses are not necessary.
(5) Conditions of work:
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Condition of work determines the level of real wage. If the working hours are less, leisure’s are more, environment of work is healthy and work is comfortable the real wage will be higher. If above facilities are not available, the real wage will be lower.
(6) Conditions of employment:
If the employment is whole time and permanent the real wage will be high. If the employment is part time and contractual the real wage will be low.
(7) Prospects of promotion:
Two jobs with equal salary but one with higher promotion prospect will have more real wages. A clerk in the bank has got higher real wage than a clerk in the Secretariat because the bank clerk has got greater prospect of promotion.