In matters of economic exchanges, labor income and “remuneration of labor” denote the same counterpart, the latter understood as including the employer shares so long as there are any231.
It is only in law that the subordination link of the wage-earner to the employer makes wages a subset of labor remunerations. As soon as there is a labor income, there is a wage economically speaking, whatever the name given to that remuneration233. Although, in the case of the labor income of the owner of a sole proprietorship, there is manifestly no subordination of one person to another, whether natural or legal, this income is in reality a cost of that enterprise, including when this owner calls themselves, or is called, a “self-employed worker” or a “sole trader.”
One is the median labor remuneration. By the definition of what a median is in statistics, the labor incomes below or equal to the median remuneration are as numerous as those above it. In national and sectoral economic statistics, the difficulties of estimating it do not prevent it from existing.
More broadly, a consensus, both on the wage question and on the other components of an economic policy, is solidly established only when it is grounded in the experimentally verified theorization of the principal distributions of flows that the practice of economic exchanges tends to establish. This is why what follows rests notably on the content of chapter 8234.
To generate the rise in the purchasing power of labor remunerations, a current of technical innovations is needed, broad and continuous enough to raise the average productivity of investments. Admittedly, it is not often the employers as such who are the inventors of these innovations. But it is they who open up outlets for them, through their financial management, including outside the enterprise, as well as throughout the public sector. It is potentially all employers and not only entrepreneurs with, currently, still — be it said in passing — their tendency to suppose, exaggeratedly, that “wealth creation” is the preserve of the market sector — in fact, every paid job takes part in the ceaseless creation of economic exchange value.
Once there is growth in the purchasing power of the median labor remuneration denoted C1, the growth in the purchasing power of the minimum labor remuneration called C2 may be lower than, equal to, or higher than C1. Those who hold that full employment is obtained by making C2 lower than C1 have not understood that it is heavily counterproductive totie growth and competitiveness to the casualization of employment and to the reduction of the labor cost235.
These gaps can be seen in two ways. Either they are regarded as the consequence of an economic law common to the formation of all prices, making differing labor remunerations as inevitable as the differing dearness of foods, clothing, and housing. In that case, the assumption (the act of taking on), nation by nation, of the sharing of total labor income would be incongruous: the future of attempts to alter this sharing would be that of the sandcastle facing the rising tide, driven by the economic law that would be common to the formation of all prices.
This possibility and this benefit are nested at the heart of the market economy, that general regime whose acceptability they considerably increase… which does not suit anyone who has decided to hold economic liberalism to be either antisocial, or condemned to be asocial in order to exist fully.
It is generally once a year that decisions are made to increase, freeze, or reduce labor remunerations (reduce, because there are frequently variable earnings-sharing components on top of the “base wage”). When the decision is the same for all wage-earners, from the least to the most highly paid, the gaps within this wage bill remain unchanged. When the decisions differ by subset of job positions, gaps are modified. Especially viewed over the long and very long term, the possibility of taking on the sharing of the wage bill is beyond doubt.
Wages are prices whose ratios to one another remain modifiable by the social body. To be sure, these modifications cannot be abrupt, failing which they reduce incentives too quickly or reinforce deterrents too imprudently. But also, the chaining year after year of these modifications makes it possible to pursue the adjustments that will be perceived, collectively, as felicitous and “decent” in matters of equalities and inequalities of labor income. Increasing the distribution of national labor incomes through the modulation of wage gaps is one of the major treatments of “the social question.”
Whether or not under the heading of an “incomes policy,” attempts to force up this weight all end in failure. Either the forcing is of the nominal level of low wages and, through a general rise in the price level, no lasting increase in purchasing power results; or the forcing is, through regulatory capping, of placement incomes, and the incentive for the acquisition of shares of capital is too weakened for the creation and reconversion of jobs not to be themselves too weakened (with the consequence that the increase in primary purchasing power, the one that incomes provide, is itself slowed, blocked, or reversed into its opposite).
In this great work of civil engineering, the “social model” may become a cause of failure. It suffices for it to be built on economically unsound mechanisms. Then a refounding is required. For the social partners and the public authorities to fully take on the sharing of labor income through the reduction of wage gaps where they are very widely judged indecent does not suffice for this refounding. But it bears on a central point that no sound argument permits treating as if it were subsidiary or beside the point: the distribution of labor incomes by occupational-qualification group. To err about it is all the more formidable in that it results in too much recourse to redistribution, which inflates the public levy to the point of making it stifling.
12) High labor remunerations cut into those below them. Relative to the common acceptance of this truth, the techniques to be used by the social partners and the public authorities are secondary to bringing the whole of civil society to consciously take on the distribution of total labor income through wage gaps, where it judges it beneficial to reduce or increase them236.
The cutting, by high labor remunerations, into the incomes – themselves also from labor – that are below them is not only inevitable but also necessary. But why act as if this cutting did not exist? To do so is to help make it, within a few generations, ever more calamitous, since, from a growing gap between the highest and lowest wages, the victims are necessarily more numerous, far more numerous than the beneficiaries. It is to persist in defending privileges through a denial of reality: whatever one does, high labor remunerations lower the purchasing power of the remunerations below them.