DECRYPTION – Two economists submitted a report this Thursday commissioned by the previous majority, which notably reviews policies to reduce employer contributions.
« For the first time in thirty years, we are proposing to increase the cost of labor at the level of minimum wage . We are breaking a taboo, even if we insist on the fact that we must move the lines slowly. » Antoine Bozio, associate professor at PSE, presented this Thursday with his co-author, Étienne Wasmer, professor at New York University in Abu Dhabi, the final version of their report entitled « Social security contribution exemption policies : a necessary inflection ». The work commissioned by the previous majority from economists was expected.
The overall relief system is costly to public finances, 75 billion euros, for increasingly questionable effectiveness. This policy indeed seems to block the prospects for salary developments in the country. In 1995, at the very beginning of the contribution reductions, the threshold of 1.3 minimum wage covered around a third of employees. Today almost twice as many employees find themselves below the threshold of 1.6 minimum wage.
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