Does work pay enough in France? How wages change in relation to inflation

Have you gained purchasing power in recent years? At first glance, there is little chance that the answer will be positive, as inflation has accompanied the French in their daily lives since the summer of 2021 and the end of the health crisis linked to Covid-19. To find out, we compared the evolution of salaries in the country in relation to inflation, on the occasion of the special page of 8 p.m. on TF1 broadcast this Monday, November 4, “Does work pay enough in France?”

Average income down slightly…

The answer is, in reality, more nuanced. Certainly, inflation has reached unprecedented heights in France in the 21st century. According to INSEE data, it stood at 5.2% in 2022 and 4.9% in 2023, records, boosted by the resumption of post-Covid-19 activity and the energy crisis having followed the outbreak of the war in Ukraine. But at the same time, the salary scale has also been revised upwards. “Between 2019 and 2023, the purchasing power of employees has, overall, remained stable”notes Mathilde Gérardin, head of the Salaries section at INSEE, interviewed by TF1info. “Wages have generally increased as much as inflation.”

Overall, because the two years of high inflation were not fully offset by salary increases. Still according to INSEE (new window)the average net salary in the private sector increased by 4.2% in 2022, and 4% in 2023. Significant increases… although lower than that of prices. In constant euros – that is to say taking into account inflation – the average income of French people in the private sector decreased by 1% in 2022, and 0.3% in 2023.

…but low wages protected by the evolution of the minimum wage

The fact remains that disparities exist. To preserve the purchasing power of the most vulnerable households, the minimum wage has been regularly increased. From 1589.47 euros gross at the end of 2021 for a full time, it is now 1801.8 euros gross since November 1 and the latest revaluation of 2%. A total increase of 13.3% in three years. “At the bottom of the salary scale, the French benefiting from automatic increases in line with inflation were able to maintain purchasing power”comments Mathilde Gérardin.

This is less the case for higher incomes. “Depending on the position in the salary scale, the evolution of purchasing power is not the same”confirms the head of the Salaries section at INSEE. “At the top of the scale, employees have seen their purchasing power decline. The decline is greater where there is no direct protection with automatic increases.” Employees with the highest incomes have therefore lost more purchasing power than those placed at the bottom of the salary scale, which has contributed to “a decline in income inequality in 2023”returning to their 2012 level.

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Direct consequence: given the evolution of prices, work pays less and less in France. But this observation could soon be corrected. “According to the first elements for 2024, salaries are increasing a little faster than inflation”note Mathilde Gérardin. “The salary changes observed so far are around 3%, compared to inflation of 2%. Employees are therefore regaining some purchasing power this year.” Enough to compensate for around half of the losses suffered since 2022.