# wages of labour

**Definition**  
Wages of labour are the monetary compensation paid to workers for their time, effort, and skill in producing commodities. They represent the labour component of a commodity’s price and are determined by the quantity and difficulty of the labour required.

**Source Chapter**  
*The Wealth of Nations*, Book 1, Chapter 6.

**Context**  
Smith repeatedly references wages when discussing how the “whole produce of labour belongs to the labourer” and how wages are part of the price composition. He also notes that wages can be adjusted for hardship or skill.

**Economic Domain**  
Distribution

**Smith’s Original Wording**  
> “The value which the workmen add to the materials, therefore, resolves itself … into two parts, of which the one pays their wages…”

**Modern Interpretation**  
Wages of labour correspond to labor compensation in modern economics, encompassing wages, salaries, and benefits. They are a primary factor of production cost and a key variable in labor market analysis.