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# What Is an Average Industrial Wage?

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• Written By: Jim B.
• Edited By: M. C. Hughes
2003-2018
Conjecture Corporation
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The average industrial wage is the average amount of money earned per hour by workers in some specific geographic region, like a town or country. This rate is generally calculated using data obtained by surveying the goegraphical area, and is determined by taking all of the wage rates earned by workers in the area and averaging them. It is common for industry and labor leaders to use average industrial wage as a benchmark to judge the earnings of a certain group of workers. Most analysts judge this rate against not only previous rates from past years but also against the rate of inflation over time.

One of the primary drivers of the economy is the amount of wages earned by workers. After all, these workers help to spur the economy by using their earnings to consume goods and services. If these wages start to lag, the consumption levels will likely drop in kind. As a result, it is important to have a good measurement of the earnings of the average worker in a particular group. This is where the average industrial wage comes into play.

To calculate the average industrial wage, all of the earnings of all of the workers in a certain area, excluding agricultural workers, are added up and then averaged together. As an example, imagine a town where 100 people earn \$10 US Dollars (USD) per hour, 100 more earn \$12 USD per hour, and a third group of 100 earn \$17 USD per hour. Adding up all of the wages and then dividing that total by the 300 total workers in the town yields an average rate of \$13 USD per hour.

Once the average industrial wage is calculated, it can be used as a standard of comparison for all jobs in the region being studied. Using that simplified example from above, it can be inferred that the people earning \$10 USD per hour are falling well below the average rate. As a result, labor leaders might point to this discrepancy as something that needs to be rectified.

Since the average industrial wage often entails figuring out the earnings of millions of workers, the process is usually accomplished through a survey. It is important to understand that the average rate should never be studied without context. The average rate in an area might well rise over time, but if it doesn’t keep up with rising prices of goods caused by inflation, it still can be a problematic situation for workers.