Low wage work in France

Low-wage work is widespread in America: around 25% of the labor force in 2005, according to OECD data. In France the incidence of low-wage work was less than 13% in 2002 and it is likely to have further declined since then. Moreover, a number of jobs and sectors in which low pay is the rule in the USA do not systematically pay low wages in France. This is the case, for example, of nursing assistants in hospitals, electronic vendors in super and hypermarkets or operators in in-house call centers in the banking or utility sectors. What are the reasons for this gap in inequality between France and the USA? Are workers better-off in France or are there negative counterparts to the small incidence of low-paid work - such as higher unemployment or higher work intensity? Low-wage work in France provides a thorough investigation of these questions, both at the macroeconomic and industry levels. Labor market institutions - and particularly, a high relative minimum wage - play a key role in explaining the compression at the bottom of the wage distribution. Other labor market regulations as well as social welfare provision are also in sharp contrast with the US situation. Detailed case studies in the food processing, hospital, hotel, retail and call center sectors suggest that French firms cope with labor cost and flexibility constraints by increasing work intensity in various ways. High labor productivity and a small number of jobs in low-wage intensive sectors appear as the cornerstones of the French "model". However, the stability of this "model" is challenged by increasing competitive pressure from abroad - including on the labor market - and by the financial cost of Welfare. Reforming the French labor market without boosting inequality is one of the main political challenges of the next decade.