2023-11-08 17:06:00
Baptiste Morin, with AFP / Credits: PHILIPPE HUGUEN / AFP
modified to
7.18pm, 08 November 2023
In 2022, the average net salary in constant euros of private sector employees decreased by 1%, the “strongest” decline observed over the last 25 years, apart from the trompe-l’oeil developments during the health crisis, indicates the Insee in a study published Wednesday. “In 2022, an employee in the private sector earns on average 2,630 euros net per month in full-time equivalent (EQTP),” indicates the Institute. If we do not take into account inflation, the salary has “significantly increased” in 2022: +4.2% for the net.
The biggest drop since 1996
Despite this, “consumer prices increased more sharply (+5.2%, following +1.6% in 2021), so that the average net salary in constant euros fell by 1.0%”, continues INSEE. “If we except the decline in 2021” (-1.3%), resulting “largely from changes in the composition of employment during the health crisis”, “the drop in the purchasing power of net salaries in EQTP in 2022 is the strongest since 1996, the year since INSEE has been measuring this indicator”, the study continues.
“Only the purchasing power of the lowest salaries has been maintained, due to the increases in the minimum wage in line with inflation,” underlines INSEE.
Salary inequalities still significant
In 2022, “half of employees in the private sector receive less than 2,091 euros net per month in EQTP”, also notes the study. “This median net salary is 20.5% lower than the average salary, which reflects a greater concentration of salaries at the bottom of the distribution.”
Furthermore, women, over-represented at the bottom of the salary distribution, are winning “on average 14.1% less than men in EQTP”, a gap which “has reduced by 0.7 points compared to 2021 and by 6.8 points since 2008”.
Inflation higher than salary increases
“We have a clear increase in salaries in current euros, but not enough to compensate for the increase in inflation,” explains Vladimir Passeron, head of the employment and earned income department at INSEE. “We have an unprecedented drop in the purchasing power of salaries completely linked to this increase in inflation that we have seen since the end of 2021.”
The notable exception concerns the lowest paid employees. And this can be explained by the successive increases in the minimum wage in 2022. The minimum wage was increased by 0.9% in January, by 2.6% in May and by 2% in August. “We have a drop in purchasing power for almost all salaries, except at the minimum wage level. For the lowest salaries, there is this guarantee of purchasing power which does not change thanks to the various revaluations”, concludes Vladimir Passeron.
The minimum wage protected by revaluations
This historic loss of purchasing power should not be compensated in 2023. Wage increases are expected around 4.5% this year while inflation in December should be at the same level. The year 2024 might be more favorable, but this remains to be confirmed. The INSEE study also reveals the distribution of income in the private sector. If the average net salary is 2,630 euros, the median salary is lower, at 2,091 euros.
This means that half of private sector employees earn less. For one in ten employees, income does not exceed 1,436 euros net monthly. At the other end of the scale, the best-paid 10% receive more than 9,973 euros net. The institute also takes stock of the purchasing power support bonus. In total, more than one employee in four received it (26.5%), for an average amount of 803 euros per beneficiary.
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