Nimellispalkka

Nimellispalkka, or nominal wage, is the wage or salary stated in current monetary terms without adjusting for changes in the price level. It is the contractual or observed amount paid to a worker before accounting for inflation, taxes, or other deductions. In economic statistics, nimellispalkka is contrasted with reaалipalkka, which measures purchasing power after adjusting for inflation.

In practice, nimellispalkka refers to the face value of earnings, typically expressed per month or per hour. Real wages, by comparison, reflect changes in the cost of living and show how much goods and services a given wage can actually buy. As prices rise or fall, nominal wages can move in the same direction as inflation, but real wages may rise, fall, or remain stable depending on the price level.

Determinants of nimellispalkka include productivity growth, labor market conditions, collective bargaining outcomes, minimum wage legislation, and macroeconomic factors such as unemployment and inflation expectations. Wage negotiations often aim to balance purchasing power with competitiveness and employment goals.

Limitations of focusing on nimellispalkka alone include that it does not indicate take‑home pay after taxes and social contributions, nor does it reveal changes in real purchasing power. For economic analysis, nimellispalkka is frequently combined with price indices to derive real wages and assess living standards over time. In Finland, nimellispalkka is a standard concept in wage statistics and labor market reporting.