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Economic Background for Estimating Labor Cost Indicators
In the second quarter of 2024, the wage bill paid by employers in the non-agricultural market sector (excluding household services) increased much more than the number of hours paid by employers, so hourly wages increased. Nevertheless, wage growth declined compared to the previous quarter, in line with the decline in inflation, with the annual growth of the Consumer Price Index at +2.2% in the second quarter of 2024, compared to +2.8% in the previous quarter. The wage growth curve is also marked by the Shared Value Premium (PPV), which has been subject to social contributions and income taxes for some of its beneficiaries since January 2024: €540 million was paid to employees in the second quarter of 2024, compared to €490 million in the previous quarter and €750 million in the second quarter of 2023.
In addition, the aid for hiring young workers on sandwich course contracts, introduced in summer 2020, mitigates changes in labour costs until the second quarter of 2024. From January 2023, employers are eligible for aid of up to €6,000 (previously €8,000) under certain conditions.
Hourly wages and hourly costs growth slowed in the second quarter of 2024
Hourly wages in the non-agricultural market sectors (excluding household services) slowed down again compared to the same period last year: in the second quarter of 2024 they grew by 2.5%, compared to 2.9% in the previous quarter. This is significantly lower than the previous peak reached at the end of 2022 (+5.3%). This slowdown is mainly due to the decline in inflation; however, hourly wages have remained slightly more dynamic than prices since the beginning of 2024. PPV payments, which fell slightly over the year, also played a role, but to a lesser extent than in previous quarters. In the second quarter of 2024, hourly wages in industry (+3.0%) were more dynamic than those in services (+2.3%) and construction (+1.9%).
Compared to the same period last year, hourly labor costs (wages and salaries, contributions, taxes net of subsidies) in the non-agricultural market sector (excluding household services) increased by 2.7% in the second quarter of 2024, compared to 3.0% in the previous quarter. The difference in the dynamism of hourly wages is mainly due to the profile of PPV payments, which are not affected by social security contributions: in the second quarter of 2024, the one-year reduction in bonus payments limited the annual growth of wages to slightly higher than the growth of labor costs.
GraphicsLCI – Hourly Wage and LCI – Changes in Hourly Cost
(Percentages, seasonally and trading day adjusted data – preliminary estimates)
| Change in hourly wages in the second quarter of 2024 | Change in hourly cost in Q2 2024 | |||
|---|---|---|---|---|
| Quarter-on-quarter | YoY | Quarter-on-quarter | YoY | |
| industry | 0.3 | 3.0 | 0.5 | 3.3 |
| put up | 0.3 | 1.9 | 0.5 | 1.9 |
| Serve | 0.4 | 2.3 | 0.5 | 2.5 |
| All | 0.4 | 2.5 | 0.6 | 2.7 |
- Scope: Non-agricultural market sectors, excluding household services
- Source: URSSAF National Fund, INSEE – Labour Cost Index (LCI), preliminary estimates
GraphicsLCI Year-over-Year Change – Hourly Wages (Preliminary Estimate)
(exist%)
| All | industry | put up | Serve | |
|---|---|---|---|---|
| Second quarter of 2024 | 2.5 | 3.0 | 1.9 | 2.3 |
| Q1 2024 | 2.9 | 3.0 | 2.3 | 2.8 |
| Fourth quarter of 2023 | 3.2 | 3.3 | 2.9 | 3.2 |
| Q3 2023 | 4.2 | 4.5 | 3.7 | 4.1 |
| Second quarter of 2023 | 5.0 | 5.1 | 5.0 | 4.9 |
| Q1 2023 | 4.3 | 4.3 | 4.9 | 4.1 |
| Fourth quarter of 2022 | 5.3 | 5.7 | 5.1 | 5.2 |
| Third quarter of 2022 | 3.9 | 3.4 | 4.2 | 4.0 |
| Second quarter of 2022 | 2.0 | 2.9 | 2.9 | 1.5 |
| Q1 2022 | 2.5 | 3.2 | 2.6 | 2.3 |
| Fourth quarter of 2021 | 0.6 | 1.1 | 1.6 | 0.2 |
| Third quarter of 2021 | 1.5 | 1.6 | 2.2 | 1.4 |
| Second quarter of 2021 | -2.2 | -1.6 | -3.0 | -2.0 |
| Q1 2021 | 2.4 | 1.2 | 1.2 | 3.2 |
| Fourth quarter of 2020 | 4.3 | 2.9 | 3.9 | 4.9 |
| Third quarter of 2020 | 3.1 | 2.2 | 2.5 | 3.6 |
| Second quarter of 2020 | 8.0 | 4.8 | 7.4 | 9.0 |
| Q1 2020 | 2.2 | 1.6 | 1.8 | 2.4 |
| Fourth quarter of 2019 | 1.2 | 1.5 | 2.8 | 1.1 |
| Third quarter of 2019 | 1.8 | 1.7 | 2.7 | 1.7 |
| Second quarter of 2019 | 1.4 | 1.7 | 2.1 | 1.3 |
| Q1 2019 | 2.3 | 2.7 | 4.4 | 2.0 |
| Fourth quarter of 2018 | 2.2 | 2.1 | 0.6 | 2.4 |
| Third quarter of 2018 | 1.9 | 1.8 | 2.2 | 1.9 |
| Second quarter of 2018 | 1.8 | 1.7 | 1.6 | 1.9 |
| First Quarter 2018 | 1.5 | 2.1 | 0.7 | 1.5 |
| Fourth quarter of 2017 | 1.8 | 2.1 | 3.7 | 1.6 |
| Third quarter of 2017 | 1.5 | 2.3 | 2.3 | 1.2 |
| Second quarter of 2017 | 1.7 | 2.3 | 3.1 | 1.3 |
| First Quarter 2017 | 1.3 | 1.7 | 2.2 | 1.1 |
| Fourth quarter of 2016 | 1.1 | 1.4 | 1.6 | 0.9 |
| Third quarter of 2016 | 1.3 | 1.5 | 2.5 | 1.1 |
| Second quarter of 2016 | 1.3 | 1.7 | 1.5 | 1.1 |
| First quarter of 2016 | 1.6 | 1.9 | 2.4 | 1.4 |
| Fourth quarter of 2015 | 1.7 | 1.9 | 2.1 | 1.5 |
| Third quarter of 2015 | 1.4 | 1.6 | 1.0 | 1.2 |
| Second quarter of 2015 | 1.4 | 1.7 | 1.6 | 1.1 |
| First quarter of 2015 | 1.3 | 1.9 | 1.2 | 1.1 |
| Fourth quarter of 2014 | 1.1 | 1.8 | 0.7 | 0.8 |
| Third quarter of 2014 | 1.4 | 1.6 | 0.8 | 1.3 |
| Second quarter of 2014 | 1.6 | 1.7 | 1.2 | 1.5 |
| First quarter of 2014 | 2.2 | 2.2 | 2.5 | 2.1 |
| Fourth quarter of 2013 | 2.1 | 2.2 | 1.9 | 2.1 |
| Third quarter of 2013 | 2.3 | 2.6 | 2.1 | 2.1 |
| Second quarter of 2013 | 2.4 | 2.6 | 2.2 | 2.4 |
| First quarter of 2013 | 2.1 | 1.9 | 1.3 | 2.2 |
| Fourth quarter of 2012 | 2.4 | 2.3 | 2.1 | 2.5 |
| Third quarter of 2012 | 2.4 | 2.6 | 2.3 | 2.4 |
| Second quarter of 2012 | 2.1 | 2.2 | 1.6 | 2.2 |
| First quarter of 2012 | 1.8 | 2.6 | 1.0 | 1.6 |
chartLCI Year-over-Year Change – Hourly Wages (Preliminary Estimate)
- Scope: Non-agricultural market sectors, excluding household services
- Source: URSSAF National Fund, INSEE – Labour Cost Index (LCI), preliminary estimates
GraphicsYear-over-year change in LCI – Hourly cost (quick estimate)
(exist%)
| All | industry | Serve | put up | |
|---|---|---|---|---|
| Second quarter of 2024 | 2.7 | 3.3 | 2.5 | 1.9 |
| Q1 2024 | 3.0 | 3.2 | 2.9 | 2.2 |
| Fourth quarter of 2023 | 3.4 | 3.7 | 3.4 | 3.0 |
| Q3 2023 | 4.2 | 4.6 | 4.1 | 3.5 |
| Second quarter of 2023 | 4.6 | 4.7 | 4.5 | 4.2 |
| Q1 2023 | 3.9 | 3.8 | 3.9 | 4.1 |
| Fourth quarter of 2022 | 4.8 | 4.9 | 4.8 | 4.1 |
| Q3 2022 | 3.8 | 3.1 | 4.0 | 3.7 |
| Second quarter of 2022 | 2.0 | 2.9 | 1.6 | 3.0 |
| Q1 2022 | 2.3 | 3.0 | 2.1 | 2.5 |
| Fourth quarter of 2021 | 0.4 | 0.9 | 0.1 | 1.1 |
| Third quarter of 2021 | 1.0 | 1.2 | 0.8 | 1.4 |
| Second quarter of 2021 | -2.7 | -2.0 | -2.3 | -4.5 |
| Q1 2021 | 1.8 | 0.7 | 2.8 | -0.2 |
| Fourth quarter of 2020 | 3.5 | 2.5 | 4.0 | 3.2 |
| Third quarter of 2020 | 2.2 | 1.6 | 2.6 | 1.4 |
| Second quarter of 2020 | 7.3 | 4.4 | 8.0 | 7.4 |
| Q1 2020 | 2.1 | 1.8 | 2.1 | 2.1 |
| Fourth quarter of 2019 | 0.9 | 1.4 | 0.7 | 2.0 |
| Third quarter of 2019 | 2.0 | 2.0 | 2.0 | 2.6 |
| Second quarter of 2019 | 1.7 | 2.0 | 1.6 | 1.9 |
| Q1 2019 | 2.2 | 2.7 | 2.0 | 3.7 |
| Fourth quarter of 2018 | 3.0 | 2.8 | 3.4 | 1.1 |
| Third quarter of 2018 | 2.8 | 2.6 | 2.8 | 3.1 |
| Second quarter of 2018 | 2.7 | 2.4 | 2.8 | 2.4 |
| First Quarter 2018 | 2.1 | 2.7 | 2.1 | 1.4 |
| Fourth quarter of 2017 | 1.6 | 1.9 | 1.3 | 4.0 |
| Third quarter of 2017 | 1.1 | 2.1 | 0.7 | 2.2 |
| Second quarter of 2017 | 1.2 | 2.1 | 0.7 | 3.0 |
| First Quarter 2017 | 0.4 | 0.9 | 0.0 | 1.7 |
| Fourth quarter of 2016 | 0.6 | 0.8 | 0.5 | 1.9 |
| Third quarter of 2016 | 0.9 | 0.9 | 0.7 | 2.8 |
| Second quarter of 2016 | 1.1 | 1.1 | 0.9 | 2.0 |
| First quarter of 2016 | 1.9 | 1.9 | 1.7 | 3.3 |
| Fourth quarter of 2015 | 1.0 | 1.3 | 0.8 | 1.3 |
| Third quarter of 2015 | 0.7 | 1.0 | 0.6 | 0.3 |
| Second quarter of 2015 | 0.7 | 1.1 | 0.5 | 0.9 |
| First quarter of 2015 | 0.8 | 1.2 | 0.5 | 0.5 |
| Fourth quarter of 2014 | 0.2 | 0.8 | -0.1 | -0.1 |
| Third quarter of 2014 | 0.4 | 0.6 | 0.4 | -0.2 |
| Second quarter of 2014 | 0.7 | 0.8 | 0.7 | 0.3 |
| First quarter of 2014 | 1.4 | 1.3 | 1.4 | 1.6 |
| Fourth quarter of 2013 | 0.3 | 0.3 | 0.3 | -0.1 |
| Third quarter of 2013 | 0.6 | 0.9 | 0.5 | 0.3 |
| Second quarter of 2013 | 0.6 | 0.7 | 0.5 | 0.1 |
| First quarter of 2013 | 0.2 | 0.0 | 0.4 | -0.7 |
| Fourth quarter of 2012 | 2.2 | 2.3 | 2.1 | 2.0 |
| Third quarter of 2012 | 2.3 | 2.6 | 2.2 | 2.3 |
| Second quarter of 2012 | 2.2 | 2.4 | 2.2 | 1.8 |
| First quarter of 2012 | 1.9 | 2.9 | 1.6 | 1.3 |
chartYear-over-year change in LCI – Hourly cost (quick estimate)
- Scope: Non-agricultural market sectors, excluding household services
- Source: URSSAF National Fund, INSEE – Labour Cost Index (LCI), preliminary estimates
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