Mean Wage | Meaning and Definition

What are minimum wages?

The mean wage is defined as an average wage allocated to employees for performing the same work during a specific time period. To calculate the mean wage, the wages of employees working in an industry or doing a particular job are added and divided by the total number of employees. In other terms, (x+y+z)/ 3= mean wage.

For instance, if an enterprise has 5 employees in the marketing department, and their annual salaries are, $30,000, $ 60,000, $55000, $30,000, & $20,000, then, the mean wage would be:

$30,000+ $60,000+ $55,000+ $30,000+ $20,000/ 5 = $195,000/ 5 = $39,000

So, the mean wage here is $39,000.

Mean wage is generally used as a basis for deciding salaries to propose new hires or reckoning the costs of new business operations.

What is the significance of the mean wage?

This figure stands critically important for job promoters as well as job seekers. When groping about for a job, job seekers tend to pay much attention to mean wages in the location or industry where they are applying. On the flip side, HR professionals and employers must be acquainted with the mean wages by location, industry, and position while scribing job descriptions. That is done to entice relevant and talented folks to send applications for the job vacancies in their company and to stay competitive and fair.

On the surface, measuring the mean wage sounds simple enough. However, subtle differences in job conditions and classifications can trigger complications. The outcomes might also get skewed due to the education and experience level of the employees.