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Meaning & Definition

Mean Wage

The mean wage is the average wage that employees receive for the same work performed during a given period of time. It is determined by adding together all of the wages of employees in a specific job or industry and dividing that total by the number of employees. In other words, (a+b+c)/3 = the mean or average.

This figure is often used as a benchmark for determining salaries to offer new hires or for estimating costs for new business processes. While this can seem like a straightforward measurement, there are complications that arise as a result of subtle differences in the job classifications and conditions. Different levels of experience and education of the workers in the sample can also skew the results.

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