France and Italy: The preference for wages at the expense of employment

In France and in Italy, there has been a rise in the wage share of GDP (a skewing of income distribution in favour of employees) even though cost competitiveness is poor, and this has led to market share losses and deindustrialisation and has therefore helped keep the employment rate low and the structural unemployment rate high. This equilibrium shows the preference in France and Italy for wages at the expense of employment: despite the resulting job destruction, per capita wage s continue to grow faster than productivity.