The Limited Times

Inflation reinforces low-wage trap mechanisms

10/15/2023, 3:15:22 PM

Highlights: Inflation, by pushing the minimum wage upwards, has come to crush a little more of the wage scales, already particularly tight in France. The fall in productivity over the past three years has further strengthened the movement by drying up employers' room for manoeuvre. This stalemate in wages can be explained first of all by a very French specificity: the astronomical cost of labour in France, which successive executives have not had the courage to tackle head-on. For decades they have embarked on a complex policy of exemption from employer contributions in order to make wages low.


DECRYPTION - Inflation, by pushing the minimum wage upwards, has come to crush a little more of the wage scales.

This is one of the central topics of the Social Conference. The outlook for the least qualified employees today seems particularly gloomy, because inflation, by pushing the minimum wage upwards, has come to crush a little more of the wage scales, already particularly tight in France. As a result, employees can work for years without seeing their income actually increase. The fall in productivity over the past three years has further strengthened the movement by drying up employers' room for manoeuvre. Hence the feeling of downgrading of households that are unable to increase their standard of living.

This stalemate in wages can be explained first of all by a very French specificity: the astronomical cost of labour in France, which successive executives have not had the courage to tackle head-on. On the contrary, for decades they have embarked on a complex policy of exemption from employer contributions in order to make wages low

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