What Is a ‘Decent Wage’? France’s Michelin Raises a Debate.

When the French tire maker Michelin closed its factories during the coronavirus pandemic, Florent Menegaux, the company’s chief executive, took stock of the closures’ impact on employees worldwide. Thousands of workers in Asia, Europe and the United States at the lower end of the company’s pay scales could barely get by, an independent review showed. Michelin vowed to do better.

Last week, the 134-year-old company, which has 132,000 workers at 131 factories in 26 countries, announced that it would guarantee all of its employees a “decent wage” wherever they were in the world, part of a broader social plan intended to ensure that none of its workers would have to struggle to make ends meet.

“If workers are just in survival mode, it’s a big problem,” Mr. Menegaux said in an interview. “When the wealth distribution in a company is too unequal, that’s a problem, too.”

The announcement quickly ignited a debate in France over what exactly constitutes a decent wage and whether more French corporations should follow suit. Unions warned that the Michelin pledge would still leave some workers struggling and that it did not come with a guarantee against future layoffs or site closures.

Corporations worldwide are looking to meet environmental, social and governance targets. A lot of investors are backing away from E.S.G. criteria, but some companies are signing up to become living-wage employers, which commits them to pay salaries that correspond to the costs of rent, food, transportation and child care in the regions where their workers live.

In France, the cosmetics giant L’Oreal committed to a living wage and extended the pledge to its suppliers.