France: Are lower wages the answer for struggling companies?

Are lower wages for struggling companies in France the answer to the COVID crisis? There are two levels to the analysis: At the macroeconomic level, companies will want to restore their earnings , even if GDP is depressed for a long time. In this case, there would be a trade-off between wages and employment: lower wages would lead to fewer job losses, a fall in the labour share of GDP being necessary for earnings to normalise. The other solution would simply be for earnings to no t normalis e . From a positive and not normative viewpoint, however, this is probably not what will happen, even though it was the case in France after the subprime crisis; At the microeconomic level, it is important to distinguish between companies that are struggling temporarily and those facing permanent problems. For the former, it would make sense to lower wages to maintain employment; for the latter, it makes no sense to lower wages, as job losses are unavoidable. The government should look at upskilling and retraining for w age earners in companies facing permanent problems.