Informations Rapides · 13 September 2024 · n° 225

In Q2 2024, hourly wages increased by 3.0% over a year, hourly costs by 3.4% Labour cost index (LCI) - Detailed results - second quarter 2024

In the second quarter of 2024, hourly wages in the non-agricultural market sector (excluding services to households) accelerated: +1.0%, after +0.2% in the previous quarter (seasonally and trading day adjusted data). Whereas in the first quarter of 2024, the wages growth had been adversely affected by the large decrease in Value Sharing Premium payments (“PPV”) in the end of 2023, PPV payments rose slightly in the second quarter of 2024 (540 million euros paid, compared with 490 million in Q1 2024 and 2.3 billion euros in Q4 2023), and had almost no impact on the overall change.

Over a year, the wage growth was almost unchanged: +3.0% in the second quarter of 2024, after +2.9% in the previous quarter. This almost stable pace of wage growth was the result of two opposing factors: on the one hand, the PPV payments almost stabilised over a year in the second quarter (contributing -0.1 points to the overall year-on-year change), whereas they had fallen sharply at the start of the year (contributing -0.5 points); on the other hand, the rest of wages slowed in line with prices (the consumer price index rose by 2.2% over a year on average in the second quarter of 2024, after +2.8% in the previous quarter). As in the previous quarter, hourly wages increased more than prices. They remained more dynamic over a year in industry (+3.4%) than in services (+2.8%) and construction (+2.7%).

In the second quarter of 2024, hourly labour costs in the non-agricultural market sector (excluding services to households) accelerated, driven by hourly wages: +1.1% over the quarter, after +0.6% in the previous quarter.

Over a year, hourly labour costs also accelerated: +3.4% in the second quarter of 2024, after +3.1% in the previous quarter. It accelerated in industry and construction, and grew at the same rate as in the previous quarter in services. The slight difference in dynamism with LCI - hourly wages observed in the second quarter of 2024 was in part due to the profile of PPV payments, which are not subject to social security contributions: the year-on-year fall in premium payments has had a greater impact on year-on-year wage growth than on labour cost growth. This difference, observed for all sectors, was particularly marked in the sector of electricity, gas etc., where PPV payments had been massive a year earlier.

Compared to the flash estimate published on 9 August 2024, the year-on-year change in LCI - hourly wages in the non-agricultural market sector (excluding services to households) in the second quarter of 2024 was revised upwards by 0.5 points, and in the LCI - hourly costs by 0.7 points. These revisions, which were more significant than in previous publications of detailed results, were the result of the integration of new information on the wage bill (in particular the inclusion of late administrative declarations), and on contributions, as well as an improvement in the treatments of paid hours (carried out between the flash estimate and these detailed results).

Compared to the previous publication of detailed results on 14 June 2024, the year-on-year change in LCI - hourly wages in the non-agricultural market sector (excluding services to households) in the first quarter of 2024 remained unchanged; the one in LCI - hourly costs was revised upwards by 0.1 points.

Since December 2023, this publication also includes the results of the revised hourly labour cost index – All employees (ICHTrev-TS). The ICHTrev-TS is therefore now available approximately 75 days after the end of each quarter, rather than 100 days after. The methodological notes for this index are available in the “Documentation” tab, and the results can be consulted via the downloadable supplementary data file or the times series attached to this publication.

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 after publication. 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).