Informations Rapides · 14 June 2024 · n° 144

In Q1 2024, hourly wages increased by 2.9% over a year, hourly costs by 3.0% Labour cost index (LCI) - Detailed results - first quarter 2024

In the first quarter of 2024, the wage bill paid by employers in the non-agricultural market sector (excluding services to households) increased significantly more than the number of hours paid by employers, so that hourly wages increased. This increase was due in particular to the automatic 1.1% revaluation in the minimum wage on 1^st January. Nevertheless, the wage growth decreased compared to the previous quarter, reflecting the fall in inflation (+2.8% over a year on average in the first quarter of 2024, after +3.7%). The profile of wage growth was also marked at the start of 2024 by the distinct drop in Value Sharing Premium payments (“PPV”, these payments being subject to social contributions and income tax for some of the beneficiaries since 1^st January 2024): €490 million were paid to employees in the first quarter of 2024, much less than in the previous quarter (€2.3 billion) and in the first quarter of 2023 (€1.2 billion).

In addition, the aid for hiring a young worker with a sandwich course contract, launched at the end of July 2020, contributed to labour cost variations until the first quarter of 2024. From January 2023, employers are eligible, under certain conditions, for aid of up to €6,000.

In the first quarter of 2024, hold back by the fall in PPV payments, hourly wages in the non-agricultural market sector (excluding services to households) slowed down: +0.4%, after +1.0% in the previous quarter (seasonally and trading day adjusted data).

Over a year, hourly wages slowed down, in a context of lower inflation: +2.9% in the first quarter of 2024, after +3.2% in the previous quarter. Hourly wages were slightly more dynamic in industry (+3.0%) and services (+2.8%) than in construction (+2.3%).

In the first quarter of 2024, hourly labour costs in the non-agricultural market sector (excluding household services) barely slowed down: +0.6% over the quarter, after +0.7% in the previous quarter.

Over a year, hourly labour costs slowed down, driven by hourly wages: +3.0% in the first quarter of 2024, after +3.4% in the previous quarter. This slowdown concerned each of the main business sectors (industry, construction, services). The slight difference in dynamism with LCI - hourly wages in the first quarter of 2024 was largely due to the profile of PPV payments, which is not subject to social security contributions: the year-on-year fall in bonus payments has had a greater impact on year-on-year wage growth than on labour cost growth. This difference, observed for most sectors, was more marked in the sector of finance-insurance and electricity, gas etc., where PPV payments fell particularly sharply over a year.

Compared to the flash estimate published on 15 May 2024, the year-on-year changes in LCI - hourly wages in the non-agricultural market sector (excluding household services) in the first quarter of 2024 was revised upwards by 0.1 points; the year-on-year changes in LCI - hourly costs remained unchanged.

Compared to the previous publication of detailed results on 19 March 2024, the year-on-year changes in LCI - hourly wages in the non-agricultural market sector (excluding household services) in the fourth quarter of 2023 was raised by 0.1 points; the year-on-year changes in LCI - hourly costs remained unchanged.

Since December 2023, this publication, dedicated to the detailed results of the Labour Cost Index (LCI), also includes the results of the revised hourly labour cost index – All employees (ICHTrev-TS), via an downloadable supplementary data file from the web publication. The times series of the ICHTrev-TS remain available on the INSEE website. The ICHTrev-TS is therefore now available approximately 75 days after the end of each quarter, rather than 100 days after.

The ICHTrev-TS is primarily intended for users who need indicators of labour costs to upgrade their contracts. Therefore, this index (base 100 in December 2008) is not usually subject to any revision once it has been published. It is computed, every quarter, on the basis of data from the detailed results of the LCI then smoothed and made monthly to ensure less volatility. The choice of an index for the purpose of indexing a contract or the appropriateness of temporarily deviating from the indexation rule provided for in a contract is at the discretion of the contractors.

The ICHTrev-TS comprises a cost index and an employer contributions index. The latter measures changes in the variable “1 + rate of employer contributions”, where the rate of employer contributions is the percentage of employer social contributions and taxes minus subsidies based on wages and employment. Unlike the cost index, the employer contributions index is not made monthly (the three monthly values for the same quarter are identical).