In the midst of a turbulent political landscape, Michel Barnier’s government faces challenges of survival and navigating through various oppositions. Despite the need to stay afloat, Barnier understands the importance of addressing the country’s needs and citizens’ expectations. He aims to bring about significant changes, hinting at revitalizing wage growth to meet popular demands for a boost in purchasing power. However, the key obstacle lies in the stagnation of labor productivity since the pandemic, hindering any substantial increase in wages.
Productivity test
Barnier’s government must address the decline in labor productivity to pave the way for wage growth. Without addressing this crucial issue, realizing an increase in disposable income remains a challenge. As the INSEE national statistics institute highlighted, the current productivity levels are far below pre-Covid-19 standards, posing a significant hurdle to economic recovery.