How to raise the lowest wages? The case of France

There will without doubt be strong public pressure in all OECD countries to raise wages at the bottom of the distribution and thus reduce income inequality. So the question economists must answer is: how can low wages be increased without worsening the economy? We examine this general question in the case of France. It is mostly considered that an increase in the minimum wage reduces low-skilled employment. This may especially be the case in France, where the level of the minimum wage is already high; The approach that France uses is then to prop up low wages with a negative income tax (“activity bonus”) . But this approach has a limit in terms of cost and perception s ; It is still possible that an increase in low wages in sectors where they are widespread has no negative effect on employment if selling prices in these sectors can rise: this is more the case when the economy is buoyant, when wage increases concern all companies in the sector and when any dominant positions among the buyers of goods and services produced by these sectors have been broken up .