Real wages are just of those working, but don't necessarily say much about a country's standard of living/total output per capita. For example, suppose the adult population remain unchanged, but half of the labor force dropped out. Those remaining in the labor force would likely be paid a higher REAL wage, because there is more demand for the remaining labor. However, reducing your workforce by half will limit the amount of output your country can produce, which is reflected in Real GDP. Therefore, real GDP per capita would, rightfully, indicate that the standard of living is worse off when less people work in the previous example (the real GDP would go down, the "per capita" [US population] is unchanged, so the Real GDP per capita is lower).
Are real wages a good measure of economic progress?
Why do we tend to use Real GDP Per Capita instead of the real wage? What is the issue of using the real wage instead?
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