Wage labor is an economic institution in which a worker sells their labor to an employer in exchange for a money wage, distinct from unfree labor institutions such as slavery, serfdom, indentured servitude or debt bondage, in which compulsion rather than a voluntary contractual wage relationship binds the worker. Wage labor became the dominant form of work organization with the rise of industrial capitalism in Europe from the eighteenth century onward, replacing earlier agrarian and craft-based labor institutions in much of the world, and remains the primary basis of most formal employment relationships globally today. Sociologists have long studied wage labor's institutional effects on class formation and workplace organization, including the trade unions that arose to negotiate its terms.
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Alienation (Marx) analyzes wage labor as the structural condition under which workers are estranged from the product, process and social meaning of their own labor.
The company town controlled the wage-labor relationship completely: the employer was also landlord, merchant and often the sole source of usable currency within the town.
Convict leasing paid the state rather than the convict laborer, inverting the ordinary wage-labor relationship even though the leased convicts performed the same kind of work as free wage laborers.
Guest worker programs formalize a wage-labor relationship but tie the worker legal residence to the employer, constraining the ordinary freedom to change employers that wage labor otherwise assumes.
Trade unions arose specifically as an institution to represent and negotiate on behalf of wage laborers within industrial employment relationships.
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