Trésor-Info - Publications de la direction générale du Trésor - Wages

The Swiss High-Price Island

2026-01-22T00:00:00+01:00

Switzerland has a reputation for being a particularly expensive country. The GDP price index is roughly 60% higher than the European Union (EU) average, creating what is known as a “high-price island”. This high cost of living affects consumption more than investment, and, within consumption, affects services more than goods.

The high-price island was not caused by recent inflation but rather structural factors dating back to the 1970s. It goes hand in hand with wages that are approximately the double of those in neighbouring countries. Above all, high price levels in Switzerland reveal a dichotomy in its economy.

While one section of the Swiss economy is heavily outward-facing, and its very high level of productivity has resulted in high wages, another section is focused on the domestic market, particularly the service sector, where there is little competition. To match the high wages in the competitive tradable sector, the less productive domestic sector has to raise its wages, resulting in a rise in the overall prices.

The Swiss model openly prioritises producers over consumers with an eye to promoting Switzerland’s economic and industrial position. The result is that certain sections of the economy are relatively closed off, with high levels of agricultural protectionism and a less demanding competition policy than the one underpinning the EU.

High income levels allow most of the Swiss population to benefit from very strong purchasing power. While Switzerland is certainly a high-price island, it is first and foremost an island of prosperity, driven by the success of its exports. Paradoxically, there is a lingering doubt as to whether this model is sustainable (i) without the continued support of targeted protection schemes and (ii) lower domestic competition.

Wage Trajectories of French Minimum Wage Earners

2025-06-12T00:00:00+02:00

Study of individual wage trajectories provides a more detailed picture of wage mobility and stagnation over a long period than aggregate wage indicators.

Analysis of wage trajectories in France between 2013 and 2019 shows that minimum wage earners, hereby defined as employees earning less than 1.1 times the French statutory minimum wage (Smic), were more likely to see their salary increase than other employees. These employees also received higher average pay rises. In particular, this is due to the fact that more young people, at the start of their careers, are minimum wage earners and then experience a rapid pay rise.

However, wage trajectories of minimum wage earners are very diverse. Only a minority of them remain permanently close to the minimum wage. Certain categories of individuals are however more likely to remain minimum wage earners over time: women, clerical workers and service sector employees.

Lastly, an analysis of wage trajectories during the COVID-19 pandemic between 2019 and 2021 suggests that experiencing a period of short-time work did not significantly affect the likelihood of wage progression during this period.

The Distribution of Income Generated in France Between Labour and Capital

2025-05-06T00:00:00+02:00

Generally speaking, the income generated in a country is divided between labour (labour costs, meaning all expenditure connected with using the labour factor), capital (gross operating surplus) and, residually, general government (taxes on production and operating subsidies).

For the past three decades in France the proportion of labour-related expenditure in the value added of non-financial corporations has remained fairly stable at around two thirds. Between 1990 and 2023, changes to this share can be broken down into three separate phases (see Chart). It fell between 1990 and 2007 as businesses offset rising taxes on production by limiting wages and recruitment. It then increased between 2007 and 2017 as the shock to business activity caused by the financial crisis had a greater impact on companies’ gross operating surplus than on the payroll which is less flexible. From 2017 to 2023, it declined slightly essentially due to the time-lag in wages aligning with the 2022 inflationary shock, an adjustment which continued into 2024. In addition, the cut in taxes on production over the period allowed for an increase in gross operating surpluses.

The slight rise in the proportion of labour-related expenditure in value added between 1990 and 2023 mirrors that of labour-related levies whereas the share relating to net wages (before income tax) remained stable.

Within the capital share, net dividends increased between 1990 and 2023 whilst net interest paid out fell. The corporate savings rate and businesses’ ability to self-finance their investments rose slightly.