How much room is there to increase low wages in France?
The need to substantially increas e the purchasing power of the lowest wages is a recurring topic of debate in France. How should it be done? Different approaches are put forward: An increase in low wages spreading to a large proportion of wage earners to maintain the wage hierarchy. This would give rise to: Either a significant rise in prices and a competitiveness problem, especially if it concerned the sector exposed to foreign competition; Or a fall in companies’ profit margins, with questions over its sustainability; An increase in public transfer payment s to wage earners at the bottom of the income scale (increase in the activity bonus paid to low-income earners), with questions over how to finance it; An increase in wages (or in specific bonuses) paid by companies on a voluntary basis (without constraints) , with tax benefits for example. This would favour employees of healthy companies (which would be acceptable in an environment of acute hiring difficulties). The last solution would be the least risky, but it would not concern all wage earners; it may also have positive incentive effects (wage earner mobility).
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