For the first time in two years, wages caught up with inflation in the second quarter: the base monthly wage index (SMB) in the private sector had increased by 4.6% year-on-year at the end of June, according to Dares, when prices had gone down. at the same time it increased by 4.5%.
But for wage earners, this does not erase the losses suffered in previous months with increases that, on average, until then did not make it possible to offset the increase in prices. Especially since inflation has since started to rise again, reaching 4.9% year-on-year in September.
Thus, for an employee to maintain the same purchasing power as in September 2022, their salary must have increased by the same amount in September 2023. On the contrary, those who obtained an increase of less than 4.9% have lost purchasing power, while the luckiest people who saw their salary increase by at least 5% in the last 12 months got it.
You can measure the impact of inflation on your purchasing power by entering your salary for September 2022 and September 2023 below:
Nominal salary vs. real salary
If a majority of French people are in favor of indexing salaries to prices, it is undoubtedly because many of them have not obtained sufficient increases in recent months to compensate for inflation.
Let’s take the example of an employee who receives 1,500 euros net per month in September 2022. After negotiating with his employer, his remuneration increased by 4%, which is equivalent to a salary of 1,560 euros in September 2023. If our employee has seen their nominal wage increase, their real wage fell due to rising prices. That is, with the same amount he could obtain more goods a year ago than today. For inflation to have a neutral impact on his purchasing power, his salary would have to increase by an additional 13.50 euros.
However, this result should be interpreted with caution. Let us remember that inflation measured by INSEE is an average that does not reflect the situation of each French person. For this reason, the statistics institute offers an inflation simulator that allows you to calculate your own price index based on the composition of each person’s consumption habits.
Source: BFM TV
