Tribune. Households have, today, with the same amount of money as yesterday, the feeling of not being able to buy the same quantity of goods and services, because of the rise in the prices of certain food products, of that of oil. increased by taxes on fuel, gas, electricity, rents and raw material costs in 2021.
These various increases raise fears of a return of inflation. This fear of the high cost of living has grown in a context where new modes of consumption coupled with ever-increasing needs are faced with wages which increase only very slowly or generally stagnate.
If inflation, which currently stands at 1.9%, does not fall and wages do not rise, the ends of the month could be increasingly difficult for middle-income households. The wage moderation of private sector employees imposed by competitiveness and the health crisis reinforces this feeling. That of the public sector and more particularly that of teachers, justified by the reduction in public expenditure, confirms this.
The business of companies
Purchasing power is first and foremost the business of companies since they directly set the level of wages. Apart from the minimum wage and the salaries of civil servants, the State only intervenes indirectly on purchasing power by fixing the amount of taxes, social contributions and social benefits.
Purchasing power depends on both price and income. Therefore, to distribute more, two types of measures are possible.
The State could make tax cuts and employers’ social contributions conditional on an increase in remuneration, in order to encourage companies to modify the sharing of added value in favor of labor income.
The first type consists of reducing prices by compressing wages considered to be a cost, in order to promote the competitiveness of companies and to benefit consumers through the resulting fall in prices. This increased search for lower prices through the reduction of the cost of labor tends to oppose the interests of those who buy to the interests of those who produce, forgetting in passing that those who produce and those who buy are the same economic agents called otherwise. .
This frantic race to lower prices makes work more precarious and encourages competition through wages. It forces households to consume less, thus forcing companies in turn to produce even less by further compressing their labor costs in order to maintain their margins and find outlets. It sets off this vicious circle where the fall in prices leads to fewer outlets for businesses resident in the territory, for lack of sufficient wages.
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