WAGE FUND THEORY
WAGE FUND THEORY OF WAGE
Introduced by Adam Smith and further developed by J S MILL in 1869.
The wage distributed to labours is calculated by considering the wage fund available and the number of workers employed.
Once the wage fund is determined it is kept constant.
Wage = (wage fund)/(no.of workers employed)
All workers are assumed to get equal wages and all workers are homogeneous in nature.
When the number of workers increases, workers are paid less and vice versa.