Difference between hourly wage and real GDP per hour worked?

In summary, the conversation discusses the difference between real GDP per hour worked and personal income, as well as the impact of experience on wages. It also mentions the use of GDP as a measure of a nation's wealth and the potential to break it down into a per capita basis for a better understanding of standard of living.
  • #1
theBEAST
364
0
In 2008 the real GDP per hour worked was $45.70? I don't think this means that the average person was making $45.70...

Here is that graph that contains this data:
http://dl.dropbox.com/u/64325990/ECON%20102/Capture.PNG

Could someone please explain the difference?
 
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  • #2
I did some similar work on this not too long ago using US nominal GDP.

In 1950 the labor force included 62,000,000 workers; produced a GDP of $293.7 billion; federal minimum wage was $0.75 per hour, however, the average hourly rate was $2.27 per hour.

Much of my analysis was done on minimum wage versus the average wage.

New workers will not earn near what experienced workers earned, so there will be discrepancies between the highest and lowest for various reasons. So experience is probably the biggest player between the min and the max.
 
  • #3
theBEAST said:
In 2008 the real GDP per hour worked was $45.70? I don't think this means that the average person was making $45.70...

Here is that graph that contains this data:
http://dl.dropbox.com/u/64325990/ECON%20102/Capture.PNG

Could someone please explain the difference?

GDP is not as measure of personal income but of the nations weath by its producion and worth of goods and services. While you can break it down into a per capita basis, which would then reflect more a standard of living.
 
Last edited by a moderator:

1. What is the difference between hourly wage and real GDP per hour worked?

Hourly wage refers to the amount of money a worker is paid for each hour they work. Real GDP per hour worked, on the other hand, measures the productivity of the labor force by dividing the total value of goods and services produced in a country by the total number of hours worked.

2. How do hourly wage and real GDP per hour worked affect the economy?

Hourly wage and real GDP per hour worked are important measures in understanding the health and growth of an economy. Higher hourly wages can lead to increased consumer spending, which can stimulate economic growth. Real GDP per hour worked is also an important indicator of overall productivity and can impact the overall economic output of a country.

3. Are hourly wage and real GDP per hour worked directly related?

No, hourly wage and real GDP per hour worked are not directly related. Hourly wage is a measure of how much workers are paid, while real GDP per hour worked is a measure of productivity. However, higher productivity can lead to higher wages in the long run as companies may be able to increase wages due to increased profitability.

4. What factors can affect hourly wage and real GDP per hour worked?

There are several factors that can affect hourly wage and real GDP per hour worked. These can include changes in labor productivity, inflation, changes in demand for goods and services, and government policies such as minimum wage laws and tax rates.

5. How is real GDP per hour worked calculated?

Real GDP per hour worked is calculated by dividing the total value of goods and services produced in an economy by the total number of hours worked. This value is then adjusted for inflation using a price index such as the Consumer Price Index (CPI) to account for changes in purchasing power over time.

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