Structural Inflation And The Economic Function Of Wages: The French Example
The share of wages in the French national income is approximately constant and very considerable. Moreover, the structure of wages is highly rigid. We propose to analyse the causes of this rigidity and to show how it contributes to making the economy inherently inflationary. Finally, we shall inquire whether the rigidity of wages does not denote a fundamental misconception of the economic function of wages under any economic system, and we shall suggest a reconsideration of distribution theory.
KeywordsRelative Wage Wage Structure Economic Function Sectoral Component Retail Price Index
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- some workers’ pensions (‘allocations aux vieux travailleurs’), state subsidies to hospitals, and public assistance payments are excluded. It is thus not possible precisely to distinguish the social insurance benefits of wage and salary earners only. The probable upward bias of the figures in Table 1, line 4 is unlikely, however, substantially to modify our argument. For an analysis of the redistributive effects of French social security schemes see G. Rottier and J. F. Albert, Économie appliquée, Archives de l’I.S.é.A., no. 2–3 (1953), La Redistribution des revenus entre groupes sociaux en 1949 and ‘The Social Services and Income Redistribution in France’, Income Redistribution and Social Policy, edited by A. T. Peacock (1954), pp. 90–138.Google Scholar
- 1.Cf. I.N.S.É.É., ‘L’Évolution récente des revenus salariaux modestes en France’, Études et Conjoncture (August 1954), p. 769.Google Scholar
- 2.The notion of incompressibility in the case of human needs is a difficult one to render precisely. See the detailed studies carried out on this subject in France by the I S.É.A., particularly: Yves Mainguy, ‘La Consommation incompressible’, Économie appliquée (1948), p. 68.Google Scholar
- 2.See André Philbert, Budget type et salaire minimum garanti. L Le Budget type de 1953 (March 1954), p. 149.Google Scholar
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- 1.F. Perroux, ‘Note sur les coûts de l’homme’, économie appliquée (1952).Google Scholar