France: How can purchasing power be increased?

Although real wages are increasing faster than labour productivity in France, strong pressure has appeared on the French government to increase wage earners' purchasing power, through the yellow vest movement, for example. How can purchasing power be increased in France? A greater increase in real wages than in productivity cannot be used for a long time: it would eventually squeeze corporate profitability, which cannot be sustained by corporate tax cuts, like it did in 2019; Household tax cuts cannot be permanently financed by the fiscal deficit; if they are offset by government spending cuts, the effect on household income may be very limited; We should not forget that there is fiscal neutrality in the medium term : a reduction in household taxes financed by increases in other taxes has no long-term effect on the economy; we will provide examples; The first lasting solution is therefore to increase real wages in exchange for higher productivity gains; unfortunately, productivity gains have now become virtually zero in France. Restoring them requires corporate modernisation and an improvement in labour force skills; We must also factor in the negative effects on purchasing power of the rise in energy prices and real estate prices; the former raises the question of the management of the energy transition, the latter the shortfall in construction in France; both issues will be difficult to solve in the short term. So there is no "miracle" short - term solution to increase purchasing power.