Report
Patrick Artus

Can France correct its flattened wage hierarchy?

The gap between the median wage and the minimum wage is abnormally small in France. This has negative consequences: Low level of low-skilled employment and high low-skilled unemployment; Abnormally small education premium. Can France correct its flattened wage hierarchy ? An increase in the median wage runs into the fact that the real median wage in France has risen more than productivity; A reduction in the minimum wage combined with an increase in public income transfers ( in the “activity bonus” paid to low-income earners, i.e. negative taxation ; or a reduction in employee social contributions) would be effective , but is widely rejected by the public; The only remaining solution is to reduce the tax burden for people around the middle of the income distribution and to move to negative employer social contributions on low wages.
Provider
Natixis
Natixis

Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.

 

Analysts
Patrick Artus

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