Informations Rapides · 15 September 2023 · n° 232

In Q2 2023, labour cost index – wages and salaries increased by 0.6%, total labour cost index by 0.7% Labor cost index in industry, construction and services - second quarter 2023

In the second quarter of 2023, the payroll paid by employers increased more than the number of hours paid, so that hourly wages rose. This increase was the result of the inflation being taken into account in wage negotiations and their gradual implementation at the start of the year, as well as the result of the automatic revaluation of the minimum wage by +2.22% in May (after +1.81% in January). The profile of wage growth is also marked by the Value Sharing Premium (PPV) for which payments fell again in the second quarter of 2023: €650 million were paid to employees in the non-farm business sector excluding household services, compared with €1.1 billion in the previous quarter and €3.3 billion in the fourth quarter of 2022. This scheme, which replaced the special bonus for purchasing power, allows firms to pay, between July 2022 and December 2023, up to 3,000 euros of bonuses per calendar year and per employee (and even 6,000 euros in the case of a profit-sharing agreement), free of social security contributions and income tax.

In addition, the “1 young person, 1 solution” plan, launched at the end of July 2020, contributed to labour cost variations until the second quarter of 2023. As part of this plan, from January 2023, employers are eligible, under certain conditions, for aid of up to €6,000 to hire a young worker with a sandwich course contract.

In the second quarter of 2023, the labour cost index (LCI) - wages and salaries in the non-farm business sector slowed down: +0.6% over the quarter, after +1.2% in the previous quarter (seasonally and trading days adjusted data).

Year-on-year, hourly wages accelerated: the LCI – wages and salaries rose by 4.9% in the second quarter of 2023 after +4.1% in the previous quarter. This annual increase in wages took place in a context of high inflation, which led to several automatic revaluations of the minimum wage since the start of 2022. Nevertheless, it remained lower than the increase in the minimum wage, which rose by 6.2% over a year in mid-2023. In the second quarter of 2023, PPV payments also contributed +0.4 points to the year-on-year rise in wages (there were no payment at this time last year, as the special bonus for purchasing power scheme ended on 31 March 2022 and the PPV scheme started on July 2022). Year-on-year, wages were almost as dynamic in services (+4.8%) as in construction and industry (+5.0%) taken as a whole, but variations were more contrasted by detailed sector of activity.

Compared to the previous release of 16 June 2023, the Q1 2023 quarter-on-quarter and year-on-year variations in labour cost index – wages and salaries are unchanged.

In the second quarter of 2023, the total labour cost index (LCI) in the non-farm business sector slowed down: +0.7% over a quarter, after +1.6% in the previous quarter.

Year-on-year, the total labour cost accelerated: +4.5% in the second quarter of 2023, after +3.8% in the previous quarter. The slight difference in year-on-year dynamism with the LCI – wages and salaries was largely due to the profile of PPV payments, as this bonus is not subject to social security contributions.

Compared to the previous release of 16 June 2023, the Q1 2023 quarter-on-quarter and year-on-year variations are unchanged.