Wages are remuneration paid to labor in return for the services rendered.
Benham has defined the term wages in a restricted sense. According to him, a wage may be defined as a sum of money paid under contract by an employer to a worker in exchange for the service rendered.
If we accept this definition as true, then we will have to exclude it from the study of economics, the services of some independent workers such as doctors, traders, etc., as they do not work under contract. But as we know, their share in the national dividend is quite significant, so we cannot neglect their services.
Thus, realizing this flaw in Benham’s definitions of wages, we define wages as remuneration paid to labor in return for services rendered either under contract of independently.
Meaning and Definition of Labor:
The term ‘labor’, in economics is used in a wider sense. It includes the work of skilled or unskilled, professional or amateur, salaried or non-salaried persons, etc., who put for the efforts mentally or bodily in return for some reward. The reward may be paid in cash or in kind or in both. The unit of time for the payment of remuneration may be day, a week, a month, or a year.