2024-01-20 07:00:22
Plet’s get the facts straight: if food inflation made an impression in 2023, rising to 13% in July, general inflation over the year is slowly falling towards 4%. The decline in purchasing power was limited by public measures. The first is the evolution of the minimum wage, which increased by around 4%, due to the indexation rule alone. Employee compensation was supported by bonuses and overtime. The margin rate of companies has increased to a high plateau in addition to regulated salaries, to which must be added the evolution of the civil service index point. The purchasing power of households was supported by a set of measures with a significant budgetary cost: revaluation of social benefits, discount on the price of fuel, energy shield, effect of the elimination of the housing tax and the royalty audiovisual.
This article is taken from “World Report, 2024 edition”. This special issue is on sale at newsstands or online by going to our store website.
Then, the good performance of employment in 2023 comes from very weak growth in labor productivity. This is good news for employment in the short term; at the same level of growth, a drop in productivity “enriches” growth with jobs, because more workers are needed to produce the same thing. In the medium term, however, this low productivity is bad news for purchasing power and public accounts.
The unemployment rate remains below 7.5%, a rather low level in France. The year 2024 promises to be gloomy on the employment front with growth remaining weak, less than 1%, and a gradual increase in productivity pushing up the unemployment rate. Part of the decline in productivity is the desired result of pro-apprenticeship policies, which have increased wage employment by more than 25,000 people, at a high fiscal cost. Of course, these measures arouse as much criticism as there are colors in the political spectrum, but there is no doubt that public action has supported purchasing power and employment in 2023.
A measure of state support for economic activity is the public deficit, expected at 4.9%. Does this budgetary activism, when growth forecast for 2023 is weak, mean that public debt is increasing worryingly? Not at all.
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