The Minister of Labor Astrid Panosyan-Bouvet presented on Friday to the social partners the broad outlines of what the government plans on contribution reductions, with the objective, according to union sources, of recovering 5 billion euros per year over three years.
Newly appointed, the minister went to the High Council for Remuneration (HCREP) to discuss with employers and unions the report by economists Antoine Bozio and Étienne Wasmer made public the day before. The latter proposes to distribute differently the reductions in contributions which are currently highly concentrated at the level of the minimum wage, so that the lowest paid employees can be increased more easily.
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While economists worked at constant cost on these reductions which amount to around 75 billion euros per year, Astrid Panosyan-Bouvet indicated, according to union sources, that she was aiming for a “performance objective” of 5 billion per year over three years, a figure initially revealed by Les Échos.
She put forward the idea of proceeding in two stages to raise contributions to the level of the minimum wage, in 2025 and 2026, and review the reductions to mitigate the threshold effects which increase the cost, for the employer, of a increase.
17.3% of employees on minimum wage in France
The “Minister of Labor announced that he was considering a reduction in exemptions from employer contributions at the level of the minimum wage and a reduction in the slope of the reductions over 2 years”, indicated on X on the representative of the CFTC at the HCREP, Pierre Jardon. These reductions would stop at 3 minimum wage, compared to 3.5 minimum wage today, said another union source. While confirming that it had presented the broad outlines of its project, the Ministry of Labor for its part did not reveal any details.
Astrid Panosyan-Bouvet had hoped on Wednesday on France Info to move forward “quickly enough” to take into account the recommendations of the economists’ report in the Social Security accounts, whose draft budget for 2025 must be presented next week.
The number of employees paid the minimum wage has increased significantly in France. As of January 1, 2023, 17.3% of employees were affected. With the current system, according to the report, for a single person without children at the minimum wage level, “the increase in labor costs necessary for an increase in disposable income of 100 euros per month is, in October 2023, 483 euros” .
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