Managers lose buying power: salaries catch up with the value of labour

According to Le Monde Économie, which cites the APEC (the French association for executive employment) barometer published on Thursday, executive pay is falling for the first time since 2010. The cause: salaries rising more slowly than inflation, hence a drop in buying power. The survey's detailed methodology (sample, amounts, sectors) does not appear in the wire report we have before us; we will not invent it. What follows is our reading.

First, a point of vocabulary: when wages rise by less than prices, we do not speak of a "squeeze", we speak of a fall in real wages. The figure on the payslip is the same, or a little larger, but it buys less bread, rent and commuting. It is a cut, simply administered slowly, with no letter and no disciplinary meeting.

Second: in commentary, inflation has a annoying habit of "rising" all by itself, like a tide. Prices, however, are set by companies, distributors, landlords and states. What the studio economists call a force of nature is a set of decisions, some of them very profitable. Marx called fetishism this inversion that turns relations between people into relations between things. Here, "inflation" is the subject of the sentence; those who set prices have vanished from the grammar.

Third point, and this is the heart of the matter: the wage is not the reward for merit. It roughly corresponds to the cost of reproducing a labour force. When the basket of necessary goods gets dearer and the wage does not follow, the value of the labour force is, in practice, eroded. Unpaid working time, the source of profit, stretches accordingly. Nothing cruel about it, the concepts tell us: it is structural. The question remains, and the wire report does not say, of what companies' profits did in the meantime.

The most instructive part concerns the category affected. Executives long lived with the conviction of being on the other side of the barrier, protected by their qualifications, their autonomy, their closeness to management. Yet they remain employees: they sell their labour power, and its price is negotiated in a balance of forces. That their decline is a "first since 2010" signals less a rupture than an extension: what other employees have long endured now reaches floors reputed to be comfortable.

We might also ask what role the reserve army of labour plays: a job market where candidates abound, or one that one wants to "cool", makes requests for raises more timid. The report establishes no link of this kind, and we do not claim it is proven; it is a hypothesis to be checked against the figures.

Meanwhile, the barometer has the merit of recalling an obvious truth that economic language takes pains to blur: there is no "buying power" in itself. There are wages, there are prices, and there are people who decide both.