HAS a few days before the first round of the legislative elections, the two political parties are emphasizing what often emerges as being the first source of concern for the French, purchasing power. To do this, National Rally (RN) and New Popular Front (NFP) promised to implement ambitious reforms if they arrived in Matignon on the evening of July 7. The NFP proposes purely and simply to increase the minimum wage to 1,600 euros net, against the current 1,398.79 euros, an increase of around 14%. A measure already carried by La France insoumise during the 2022 legislative elections then presented as a bill but rejected by the National Assembly.
What would be the consequences if such a measure were implemented? Bertrand Martinot, economist and specialist in unemployment and employment policies, points out a mechanical effect: “Today, 17% of workers are paid the minimum wage. If the minimum wage suddenly increases to 1,600 euros, the percentage of workers paid in reference to the minimum wage increases to around 30%. » France then becomes an economy where nearly one worker in three has remuneration set by the State, which does not exist in any market economy.
An increase in the minimum wage and side effects
Bertrand Martinot points out a second, more pernicious effect, which concerns the increase in labor costs: “It is possible that an increase in the minimum wage of 14% could lead to job destruction or at least make bosses reluctant to hire. According to initial estimates from the Bank of France and the Court of Auditors, around 350,000 jobs are threatened, or which will not see the light of day. » Indeed, at this level of remuneration, it is easier for companies to eliminate services with low added value than to increase salaries and therefore employer contributions.
READ ALSO Social and tax fraud, the false jackpot that the far right fantasizes aboutAn analysis that Stéphane Carcillo, professor of economics at Science Po Paris, shares: “In the current economic situation, there are many failures at the level of VSEs/SMEs, and they are the ones that employ the most minimum wage workers. » The latter fears that employees of companies which do not have enough margin will cost more than what they bring in due to the increase in the minimum wage. However, this measure would have a clear advantage at the macroeconomic level. For him, the 200 euros per month granted to minimum wage workers will be used up and not saved, which will create a stimulus effect.
READ ALSO “If the RN or the NFP win the legislative elections, foreign investors will go elsewhere! » But several questions remain, in particular that of the activity bonus currently paid to workers who earn between one minimum wage and one and a half minimum wages. Bertrand Martinot fears that, with the increase in the minimum wage, many employees will no longer be entitled to this activity bonus, which would cancel out the purchasing power thus created. On the other hand, if the left alliance aligns the activity bonus with the new minimum wage of 1,600 euros, this will be very expensive for public finances.
Same objective, different measure
On the RN side, we have taken up the 2022 program and the desire to reward employers who increase salaries below three minimum wages by 10% by exempting them from employer contributions. The idea in itself is not bad when we know that, to increase an employee by 100 euros, the employer must pay 400. “It must be said, however, that at the low-wage level there is already no or very few employer contributions,” specifies Bertrand Martinot.
READ ALSO Price blocking and VAT reduction: measures with perverse effectsThe latter wonders: “This is a reform that will cost taxpayers a lot of money with a lot of gray areas: do we include inflation up to 10%? Are we talking about individual or collective increases? » Stéphane Carcillo is also skeptical about the number of companies ready to take advantage of this system. On the one hand, because salary increases generally occur in a context of inflation to cushion the rise in prices. However this year: “salary negotiations point towards an increase of 4 to 5%, which is already good. It is therefore not certain that all SMEs/VSEs will increase employees by 10% even with the exemption from charges.”
READ ALSO Smic, retirement at 60… The NFP explains how it hopes to finance its programOn the other hand, the employer must be sure that the exemption is lasting, because if it is only valid for one or two years, the increase in salary is permanent, so it is less interesting. Finally, Stéphane Carcillo points out the fact that in France “80% of employees earn less than three minimum wage”. “It is therefore a poorly targeted measure, which risks not helping those who need it most. »
