Astrid Panosyan-Bouvet indicated on Friday that she was aiming for a “performance objective » of 5 billion per year over three years on contribution exemptions, according to union sources, confirming a figure initially revealed by Les Echos.
The Minister of Labor went to the High Council for Remuneration (HCREP) to discuss with employers and unions the report by economists Antoine Bozio and Etienne Wasmer, made public the day before.
This report proposes to distribute differently the reductions in contributions which are currently highly concentrated at the minimum wage level, so that the lowest paid employees can be increased more easily. Economists have worked at constant cost on these reductions which amount to around 75 billion euros per year.
Pensions, unemployment insurance: Astrid Panosyan-Bouvet wants to be a more social minister
Raise contributions in two stages
Still according to union sources, Astrid Panosyan 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, to the employer, of an increase.
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 reductions over 2 years”indicated on X about the representative of the CFTC to the HCREP, Pierre Jardon.
The reductions would stop at 3 SMIC, compared to 3.5 SMIC 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 wanted to move forward on Wednesday on France Info “quite quickly” 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.
Important threshold effects
As a reminder, 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”.
There are also significant threshold effects: economists mention the case of a salary increasing from 3,803 to 3,804 euros (i.e. 2.5 SMIC in 2019), which “leads for the employer to an increase in annual labor costs of 2,756 euros, compared to a net gain for the employee of around 9.50 euros”.
The reform must make it possible to “revitalize salaries”, affirmed Étienne Wasmer during a press point: with the central scenario of the report, the cost of increasing employees would fall “quite significantly around 10%”. In the case of a single person without children at the minimum wage level, the increase of 100 euros would thus cost 430 euros and no longer 483 euros.
Do not penalize employment
“This reduction must remain limited” to avoid penalizing employment, explain the economists who have developed alternative scenarios which would either cost several billion euros to public finances or destroy jobs. Their central storyline has an effect “overall positive” on employment, of the order of 10,000 jobs created.
Another option would be, for example, to maintain a level of exemption identical to the minimum wage level, and to restrict exemptions to salaries below 1.9 minimum wage. The budgetary gain would be 12.1 billion euros, but 61,000 jobs would be lost, the authors calculated.
“We are still proposing for the first time in thirty years to increase the cost of labor to the minimum wage. We’re still breaking a bit of a taboo, we’re saying we have to go slowly”underlined Antoine Bozio.
Towards a “very rapid” recovery of unemployment insurance
The Minister of Labor, Astrid Panosyan-Bouvet, said she would like negotiations on unemployment insurance to resume “very quickly”without a new framing letter, in an interview with Ouest-France published online Friday.
“We want this negotiation to resume very quickly” more “I do not want there to be a new framework letter, which does not prohibit the State and the social partners from talking to each other, on the contrary! »declared the minister.
“The agreement signed by three trade union organizations in November 2023, which had not been approved by the former government because it lacked elements, in particular on the rules of unemployment insurance for seniors, will serve as a basis for discussion “she added.
(With AFP)
