Wage Disindexation in France and the Incompleteness of the Employment Contract

Abstract

Until 1983, the indexation of wages to past prices, which, with the exception of the minimum wage, the SMIG,1 had actually been forbidden by law in 1958, was, nevertheless, common practice in France. It had even been enshrined in a number of collective agreements, including those covering the metal and rubber-processing industries,2 which meant that wage indexation was applied to all employment contracts in firms covered by such agreements. This aspect of the management of the wage–labour nexus shows, first, that customs are sometimes much stronger than rules, even those emanating from the state, and, secondly, that a rule has no meaning until it is put into effect, a point to which we will return later in the book. In launching a campaign to enforce the prohibition of wage indexation, the socialist government of Pierre Mauroy was challenging one of the fundamental elements of the Fordist wage regime, namely the continuous increase in wages relative to the cost of living (Benassy et al., 1977; Boyer, 1978).