“You have to recognize the value of work” and “remunerate employees fairly”. Anne Hidalgo has made raising wages one of the pillars of her campaign for the presidential election. If she comes to power, the socialist candidate promises to increase the Smic by 15% from the start of her five-year term, an increase of 200 euros net per month, can we read on her campaign site.
To support her proposal, the mayor of Paris highlights the evolution of wage disparities. “If you look at the last ten years, what happened? The top 10% of earners grew ten times faster than the bottom 10% of earners”, she assured, Tuesday, February 1, on RFI. But is this observation true or “fake”?
This is not the first time that Anne Hidalgo has advanced this argument. She had thus mentioned this order of magnitude from January 18 on the set of LCI, specifying that this trend was observed “since 2008”.
My first priority will be to revalue the work. I will immediately increase the minimum wage by €200 net per month, and I will tackle the indecent pay gaps that exist in certain companies. #LesMatinsLCI pic.twitter.com/lKSDgPGl5s
— Anne Hidalgo (@Anne_Hidalgo) January 18, 2022
So where do these numbers come from? Contacted by franceinfo, the candidate’s campaign team refers to data from the National Institute of Statistics and Economic Studies (Insee), “which are also in a report by the Jean-Jaurès Foundation”. The think tank, close to the Socialist Party, actually published in March 2021 a 36-page document on the revaluation of low wages. The authors develop avenues for “ensure employees receiving low wages the benefit of economic growth and limit wage inequalities”.
The balance sheet they draw up is however less alarmist than that of the socialist candidate. “Since 2008, the wages before redistribution of the wealthiest 10% have increased almost three times faster than those of the poorest 10%”, they write. A number far from “ten times faster” mentioned by Anne Hidalgo.
The authors are based on data from INSEE which present the evolution of the distribution of wages in constant euros, that is to say in values corrected for the effect of inflation. These statistics are expressed in full-time equivalent, which means thata salary is “converted to full-time throughout the year, regardless of the actual volume of work”explains INSEE.
By comparing the evolution of the first decile (D1) – the value of the salary such that 10% of employees receive less – with the 9th decile (D9) – the salary below which 90% of the salaries, therefore the 10% of the highest salaries – we see that the conclusion of the Jean-Jaurès Foundation report is itself slightly overestimated.
According to the latest “long series” published by INSEE, the median salary went from 1,773 euros in 2008 to 1,849 euros in 2018. That is an increase of 4.3% over the period. On the higher paid side, the top 10% of salaries were above €3,497 net per month in 2018, compared to 3,738 euros in 2008. In ten years, they have increased by 241 euros, an increase of 6.9%. On the other side of the scale, the lowest 10% of salaries were below 1,252 euros net per month in 2018, i.e. 39 euros more than in 2008. The lowest salaries have thus grew by 3.2% over the period.
Since 2008, the 10% of the highest salaries have therefore actually progressed 2.2 times faster than the 10% of the lowest salaries. A trend confirmed by Fabien Guggemos, head of the wages and income division of the activity at INSEE, who does not explain the figures put forward by the candidate.
“Over the last ten years, there has been a slight increase in wage disparities.”
Fabien Guggemos, statistician at INSEEat franceinfo
The interdecile ratio between the 10% of the highest salaries and the 10% of the lowest salaries makes it possible to observe this widening of inequalities. In 2008, the wealthiest had a salary 2.88 times higher than that of the modest. This gap stood at 2.99 in 2018.
Over the past decade, “LWages have progressed less at the bottom of the distribution”, analyzes Fabien Guggemos. The last government “boost” in favor of the minimum wage dates back to July 2012, at the start of François Hollande’s five-year term. Since then, the minimum wage has only benefited from automatic annual increases indexed to inflation, “which itself was relatively low” over the period, points out Fabien Guggemos.
The wage gaps observed since 2008 can also be explained by the dynamism of very high wages. Because the category of the 10% of the highest salaries includes great disparities. At the top of the pay scale, the top 1% of employees received 9,037 euros net per month in 2018. That is 2.4 times more than the 9th decile, and 7.2 times more than the first decile.
The share of the wage bill collected by the “top 1%” – private sector employees who receive the highest salaries – has generally been on the rise for twenty years, underlines INSEE in a note published in May 2020. After a slight decline during the financial crisis of 2008-2009, this share “keeps progressing” since the economic recovery of the early 2010s, observes Fabien Guggemos. In 2018, the 1% of the highest paid employees held 8.1% of the payroll, against 7.5% in 2009, in the midst of the crisis.
The first indicators for 2019 tend to show an increase in low wages, in particular under the effect of the payment of the exceptional purchasing power bonus. During this year, the wages of the first decile increased by 1.7%, against 0.7% for the 9th decile. “The bottom of the wage distribution grew a little faster than the top”, “slightly correcting the upward trend in wage disparities” observed in previous years, says Fabien Guggemos.
As for the data on the effect of the health crisis, they are still very partial. However, the INSEE expert notes that “Lhe crisis has affected the most precarious, low-wage earners, who have been more affected by the cessation of activity, more than executives, who on average carry out teleworking activities more often.” “Unsurprisingly, wage income has therefore very strongly dropped”, but the short-time working scheme has nevertheless made it possible to “complete them and largely limit the increase in wage disparities”completes Fabien Guggemos based on an INSEE note published in June 2021.
At the end of 2021, wages seemed to have recovered “their pre-crisis trend levels”, he deciphers. A trajectory that should “to continue thn 2022, with probably quite dynamic wages in a context of high inflation”anticipates the statistician.