Reply To: A waitress' wage

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#18002
jmherbener
Moderator

A worker’s wage is the same as the Marginal Revenue Product of his labor, which is the combination of its physical productivity and the market value of what he produces. Thus, a worker’s wage will increase if the market value of what he produces increases, even if his physical productivity doesn’t rise.

The money wage also depends on the purchasing power of money. A worker’s money wage can rise even if his “real” wage, i.e., the purchasing power of his wage, doesn’t.

In 2012, the BLS estimate of the average wage for Waiters and Waitresses was $9.95 and employment was 2,332,020.

http://www.bls.gov/oes/current/oes353031.htm#%283%29

In 1999, the average wage was $6.46 and employment was 2,039,950

http://www.bls.gov/oes/1999/oes353031.htm

That’s a 54 percent increase in the average wage and a 14 percent increase in employment over 13 years.

The CPI was 229.8 in May 2012 and 166.2 in May 1999. Prices increased 38 percent over those 13 years.

ftp://ftp.bls.gov/pub/special.requests/cpi/cpiai.txt

Thus, the real wage of waiters and waitresses increased from $6.46 to $7.21 or 11.6 percent over those 13 years.

Without knowing any relevant details about this labor market, including the extent and type of government intervention, I would say that demand for restaurant meals has increased, pushing up their prices and increasing the demand for waiter and waitress services. The larger demand has modestly increased employment and real wages.