Report
How can purchasing power be boosted if productivity gains fail to pick up?
We look at the situations of the euro zone and France. Since peaking in 2018 (euro zone) or 2019 (France), labour productivity has fallen by 0.5% in the euro zone and 5.3% in France. Income distribution (comparison of productivity and real wages) has become skewed in favour of wage earners in the euro zone and France. As productivity is now stagnating in the euro zone and in France, there are only two ways of boosting the purchasing power of all employees, beyond the short-term effects of changes in import prices: Continuing to increase the fiscal deficit; Skewing income distribution against companies. But it should be noted that the rise in companies’ profitability since 2013 has gone hand-in-hand with an increase in their investment. It would be preferable to restore productivity growth.
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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.
Patrick Artus
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