Economic issues in the revaluation of SMIC
Since 2012, the minimum wage has only increased in line with inflation. For Clément Carbonnier, professor of economics at Paris 8 University, this revaluation is justified to support the purchasing power of the lowest paid workers. Jean-Luc Mélenchon, the founder of La France insoumise, promised an immediate increase in the minimum wage to 1,600 euros net. According to Clément Carbonnier, “ So it seems reasonable to plan such a catch-up to really support the purchasing power of the French ».
Severe criticism of the economic effects
There have been many criticisms of this move. Bruno Le Maire, Minister of the Economy, and Michel Picon, president of the Union of Local Businesses (U2P), expressed their concerns. According to them, such an increase could lead to many layoffs, especially for small businesses that cannot withstand such a large increase in labor costs. Bertrand Martinot, economist at the Montaigne Institute, estimated that this revaluation could lead to a “great flattening of the distribution of wages”, increasing the number of minimum wages from 17% to almost 30%. He pointed out that ” if we change the net minimum wage from 1,400 to 1,600 euros net per month, mechanically, from one day to the next, we will have between 25% and 30% of the minimum wage ».
Potential employment effects
A study by the Montaigne Institute predicts that this move could lead to between 230,000 and 380,000 job losses. Bertrand Martinot emphasized that raising the minimum wage would increase labor costs, especially sensitive to low wages, and could encourage companies to eliminate positions or not create new ones. o. Clément Carbonnier disputes this view, calling it theoretical and difficult to observe with empirical data. According to Bertrand Martinot, the immediate assessment of the minimum wage at 14% could lead to ” a large reduction in the distribution of wages “. In addition, he added that it would mechanically increase the amount of the minimum wage in ” 17% to almost 30% ».
Possible payment for small businesses
To mitigate the negative effects, the NFP offers specific assistance for small businesses, such as zero-interest credits and liquidity facilities. These measures may possibly offset part of the increase in labor costs and limit job losses. However, these support measures remain unclear and require concrete and effective implementation.
A socially just move?
Gilbert Cet, professor at Neoma Business School, warned against further “smicardization” of France. Such an increase could concentrate wages around the minimum wage, thereby limiting the prospects for advancement for the slightly better-paid employees. This situation can cause the frustration of workers and harm the functioning of the labor market. According to Bertrand Martinot, “ the catch-up effect when there is an increase in the minimum wage is a reality. But let’s remember that in absolute terms, the employees concerned will not lose. It is only a feeling and impression of catching up with the minimum wage but in reality, their salary is not less ».
Alternative solutions to consider
Instead of a rapid increase in wages, some economists, such as Bertrand Martinot, propose to examine the mechanisms of setting the minimum wage. A method consisting of adjusting the first level of the salary scales of the various professional branches would be more effective in “de-microcardializing” in France without the negative impact of a general increase of the minimum salary. For Bertrand Martinot, another solution for “ desicardize France” prefers, as recommended by the SMIC group of experts, to ” replace the national legal minimum wage, the amount determined according to a well-known mathematical formula, by the weighted average of the revaluation of the first level of the salary scale of about ten professional branches that sets the tone for the economy ».