TERM real WAGES refers to wages that have been adjusted for inflation. This term is used in contrast to nominal wages or unadjusted wages. Real wages provide a clearer representation of an INDIVIDUAL s wages. The real purchasing power of income or money is the key determinant of real wage. It an indication of an individual s actual purchasing power. Real wages are a useful economic measure, as opposed to nominal wages, which simply show the MONETARY value of wages in that year. HOWEVER, real wages does not take into account other compensation like benefits or old age pensions.