<p>Wages are a subset of income.  Your income includes your wages but it also includes other sources of income such as dividends and interest.  If your only source of income is a job, then income and wages are the same thing.</p>

<p>It is certainly possible that nominal wages would rise while real wages fall.  Imagine that you earn 50,000 at a job in 2019.  Inflation runs at 5% a year.  And say that at the end of 2019 your boss says that you're getting a 2,000 raise so your salary in 2020 will be 52,000.  In nominal terms, your wages increased from 50,000 to 52,000, a 4% increase.  But since inflation was 5%, your 52,000 salary in 2020 will buy less than your 50,000 salary bought in 2019-- you would have needed a 5% raise (2,500) in order to keep pace with inflation.  Your nominal wage increased but your real wage decreased.  </p>

CC BY-SA 4.0
2019-01-28T23:54:31.970Z
2019-01-28T23:54:31.970Z
Justin Cave
<p>In macroeconomics, I understand that nominal wage (W) is your wage in dollars, while real wage (W/P) is what you can get for that wage (in apples, etc...). But is this the same thing as "nominal income" and "real wage"? </p>

<p>If so, can the nominal income go up while the real income declines? And what would be a proper example of this? </p>

<p>I've researched this question online, but all searches were fruitless and failed to explain this simply. All help is greatly appreciated. Thank you.</p>

CC BY-SA 4.0
2019-01-28T23:07:51.723Z
What do you want to learn about?  'But is this the same thing as "nominal income" and "real wage"?' Can you be clearer? Income may refer to earnings, not only wages.
london
<macroeconomics>
Is nominal/real income and nominal/real wage the same? If so, is it possible for your nominal income to rise as your real income falls?
jrightwiller
# Is nominal/real income and nominal/real wage the same? If so, is it possible for your nominal income to rise as your real income falls?

(Asked by: username_0 on 2019-01-28)

In macroeconomics, I understand that nominal wage (W) is your wage in dollars, while real wage (W/P) is what you can get for that wage (in apples, etc...). But is this the same thing as "nominal income" and "real wage"?

If so, can the nominal income go up while the real income declines? And what would be a proper example of this?

I've researched this question online, but all searches were fruitless and failed to explain this simply. All help is greatly appreciated. Thank you.

**Tags:** macroeconomics
> **Comments:**
> **username_1**: What do you want to learn about?  'But is this the same thing as "nominal income" and "real wage"?' Can you be clearer? Income may refer to earnings, not only wages.  

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## 1 answers

### Answer by username_2 on 2019-01-28. Score: 1

Wages are a subset of income. Your income includes your wages but it also includes other sources of income such as dividends and interest. If your only source of income is a job, then income and wages are the same thing.

It is certainly possible that nominal wages would rise while real wages fall. Imagine that you earn 50,000 at a job in 2019. Inflation runs at 5% a year. And say that at the end of 2019 your boss says that you're getting a 2,000 raise so your salary in 2020 will be 52,000. In nominal terms, your wages increased from 50,000 to 52,000, a 4% increase. But since inflation was 5%, your 52,000 salary in 2020 will buy less than your 50,000 salary bought in 2019-- you would have needed a 5% raise (2,500) in order to keep pace with inflation. Your nominal wage increased but your real wage decreased.


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