the essential
In its program for the legislative elections, the New Popular Front proposes, within 15 days after its accession to power if the French choose to do so on July 7, to increase the minimum wage to 1,600 euros net per month, compared to €1,399. But is this measure credible and possible given the degraded public accounts?
A catastrophic measure for some or beneficial for others, the increase in the minimum wage, the inter-professional minimum wage for growth introduced in 1970, returns to the debate during the legislative elections. The New Popular Front proposes in its “Legislative Contract”, presented on June 14, several measures concerning salaries which would be implemented within 15 days following its accession to power, if the French choose the left on July 7.
In terms of the “state of social emergency”, the New Popular Front proposes to “increase salaries by increasing the minimum wage to €1,600 net, by increasing the index point of civil servants by 10% (fully compensated for local authorities), to increase the allowances of trainees, the salaries of apprentices and work-study students. »
“An economic catastrophe” for Bruno Le Maire
The minimum wage being at 1,398.70 euros per month net today, this corresponds to an increase of 14.39%. The increase in the minimum wage had already been formulated by La France insoumise in 2022 during the legislative elections. Jean-Luc Mélenchon’s movement proposed raising the minimum wage to 1,500 euros net, to “advance people’s lives”. During the presidential election, Fabien Roussel, PCF candidate, also proposed that “the hourly minimum wage [soit] increased to quickly reach 1,500 euros net per month (i.e. 1,923 euros gross). »
DDM – Philippe Rioux
Unsurprisingly, the government immediately stepped up to denounce the increase in the minimum wage proposed by the New Popular Front. “A sudden increase in the minimum wage would be an economic catastrophe which would destabilize our SMEs and our craftsmen, cause layoffs and therefore mass unemployment such as we have not seen for 40 years. 500,000 jobs would be destroyed,” the Minister of the Economy Bruno Le Maire reacted on X.
“We will ensure that we preserve VSEs and SMEs, but the CAC40 has doubled its dividend distributions and share buybacks in seven years,” Olivier Faure, first secretary of the PS, noted Tuesday in Midi Libre.
The “de-emcardization” that Gabriel Attal wanted
While business leaders expressed their concerns and in particular the Medef which yesterday auditioned the candidates for the legislative elections, the economist Gilbert Cet, also president of the Retirement Orientation Council, estimated in Le Figaro that “for reasons costs, such an increase would not be reflected in all salaries, which would only reinforce the smicardisation of society.
A situation against which Gabriel Attal spoke out during his general policy speech by proposing the “de-emcardization” of France. “In France we have a paradox. We have a minimum wage, a Smic, significantly higher than that of our neighbors, and we are proud of it. But we have a much larger share of our workers close to the minimum wage than our neighbors. It’s a problem,” said the Prime Minister.
It is true that France has never had so many employees receiving the minimum wage. According to the latest report from the minimum wage expert group published in November 2023, 3.1 million employees in the non-agricultural private sector (i.e. 17.3% of employees) were paid the minimum wage as of 1is January last year. In 2021, they were only 12% and 14.4% in 2022.
“If we increase the net minimum wage from 1,400 to 1,600 euros net per month, mechanically, overnight, we will have between 25% and 30% of minimum wage,” according to estimates by economist Bertrand Martinot, attached to the Institut Montaigne, which could lead to “a gigantic decline in the distribution of salaries” since nothing says that salaries above the minimum wage, fixed contractually, would increase in the same proportions…
No boost to the minimum wage since 2012…
The only salary indexed to inflation, the minimum wage “has been revalued seven times from 1is January 2021 to 1is May 2023 with a cumulative increase of + 13.5% (including + 6.6% year-on-year as of 1is January 2023, the largest annual increase since 1991), indicated the experts, who also noted that the level of the hourly minimum wage in France remains one of the highest among OECD countries. Sophie Binet (CGT) however estimated that “the French minimum wage is lower than the Belgian, German or Swiss minimum wage”. At 1is January 2024, the amount of the minimum wage increased by 1.13%.
“Since 2012, no additional boost has been granted by successive governments to the minimum wage and the latter has therefore only increased in relation to inflation,” Clément Carbonnier, professor of economics at the University of Paris 8 and co-director of the “socio-fiscal policies” axis of the Interdisciplinary Laboratory for the Evaluation of Public Policies (LIEPP) at Sciences Po. “It therefore seems logical to plan such a catch-up to really support the power of ‘purchase of the French’.
