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Smic: the group of experts speaks out against a boost on January 1, 2024

Exactly how much will the more than three million French workers paid the minimum wage earn in 2024? The question is not yet completely resolved but one thing is certain, the probability of a government boost to the minimum wage on January 1 seems lower than ever.

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Smic: the group of experts speaks out against a boost on January 1, 2024

Exactly how much will the more than three million French workers paid the minimum wage earn in 2024? The question is not yet completely resolved but one thing is certain, the probability of a government boost to the minimum wage on January 1 seems lower than ever. The committee of experts in charge of the subject has in fact decided against this option in its annual report, published this Thursday. This opinion may only be advisory, but few governments have not followed its recommendations. The only exception dates from July 2012. A few months after his election, François Hollande granted a slight increase of 0.6%. Conversely, Nicolas Sarkozy and Emmanuel Macron have always been satisfied with automatic increases.

In addition to possible boosts, the minimum wage is in fact revalued every January 1, taking into account inflation and gains in purchasing power of workers and employees. In addition, it can be increased during the year if prices have increased by more than 2% since the last increase. However, revaluations have been exceptionally numerous over the last two years. Driven by the strong return of inflation, the hourly rate of the minimum wage changed “seven times from January 1, 2021 to May 1, 2023 with a cumulative increase of 13.5%, including 6.6% year-on-year as of January 1. 2023, the highest annual increase since 1991,” underline the experts in their report. With all these adjustments, the “smicards” are “the only French employees who have seen their purchasing power maintained”, explains Gilbert Cet, economist professor at Neoma, to explain the arbitration made by the group of experts that he presides.

These repeated increases are an advantage which also hides perverse effects. A number of employees, yesterday slightly above the minimum wage, are caught up by this floor. Result, “the percentage of employees directly affected by the revaluation of the minimum wage on January 1 continues to increase in 2023 to reach a historic level of 17.3%, after 12% in 2021 and 14.5% in 2022”, points out the document.

Worse, certain professional sectors sometimes find themselves with several minimum levels below the minimum wage. Of course, employees do not see their remuneration fall below the legal minimum, but this phenomenon causes a lasting blocking effect at this level. Questioned by the unions, the Prime Minister took up the subject, which notably led to a social conference on October 16.

In the process, the executive threatened to take action against the branches which did not play the game of negotiation and did not regularly update their salary scales. Sixty of them were in this situation in mid-October. Since then, things have improved, the Ministry of Labor points out, since “only” 39 of them received a call to order by mail sent a few days ago by the minister. Around ten of them, the most recalcitrant, will even be received by the minister or his entourage soon. The objective is to remind them that “the situation is obviously detrimental to employees but also to the attractiveness of the sector and therefore of companies”, points out the ministry.

Beyond that, the group of minimum wage experts calls for reflection to make wage increases less costly for employers. “For a single employee on minimum wage, increasing their net employee by 100 euros costs their boss 483 euros,” laments Gilbert Cet. A good one which can be explained by the numerous exemptions from charges for low salaries which have been voted over time. “Employer social contributions at the minimum wage level are now limited to the work accident and occupational illness contribution,” write the experts.

On the other hand, this allows the cost of labor on low French wages to be within the OECD average, while “the level of the minimum hourly wage in France remains one of the highest among the countries concerned”. On the other hand, “policies supporting unskilled employment will have to find other avenues in the future,” warn the authors. Who add that “the large-scale support policies for low incomes, in particular with the activity bonus, also seem to have reached their limits”. Warnings which should only strengthen the determination of the executive to attack the French social model, in order to finally achieve full employment, promised in 2027 by Emmanuel Macron.

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