Wage Trends in France: The Minimum Wage, Wages and In-Work Poverty – Diagnosis and Priorities

In the present context of economic and financial crisis, and given the austerity measures required in France to prevent an aggravation of the debt crisis, current prospects may seem rather gloomy to French people. Had recent decades given them a sense that their economic situation was improving, then the remedy might have been easier to swallow. However, reading the analysis presented here by Gilbert Cette, for most of those lucky enough to be in employment this has not really been the case: beneath a general stability in the distribution of added value in France, we find, on the one hand, an explosion of high incomes and, on the other, a growth in the purchasing power of the minimum wage (the SMIC), which has almost continuously progressed more strongly than the average or median wage. In such a context, a large proportion of workers may have a sense of not profiting fairly from the fruits of growth, as they are being rapidly outdistanced by the top earners and caught up by those at the lower end of the scale.
After presenting the data that characterize such a trend, Gilbert Cette offers various lines of thinking which might lead to a rise in purchasing power for average salaries and develop prospects for upskilling among the least qualified, in order to reduce the number of employees remaining indefinitely on the minimum wage. He particularly stresses the need to strengthen wage negotiations at sector and company level, which also requires a strengthening of the role of the social partners. He also recommends some angles of state intervention to regulate high-end incomes in certain cases. Lastly, he stresses the need to better reconcile employee protection and economic efficiency and, in order to do so, to mobilize the social partners to modify labour legislation.