Revaluation of the minimum wage: who will really benefit from it and what effects on wages?

Prime Minister Sébastien Lecornu is expected to announce an increase in the minimum wage for December 1, increasing the minimum wage to €1,500 net. What are the consequences on other salaries?

This Monday, November 9, Prime Minister Sébastien Lecornu received employers and unions from the private sector, then high school students and students. The objective is to put an end to the social discontent that has shaken the country for several weeks, in particular by announcing measures to fight inflation. Among those which should be announced at 1:30 p.m., one of the most anticipated is the revaluation of the Smic (the minimum wage) which should go from €1,477.93 to €1,500 net.

Normally, the minimum wage increases each year on January 1st. But the decree plans to bring this increase forward for December 1, to help households before the holidays (each minimum wage employee will receive an additional €22 and some extra). The government's last “voluntary” increase dates back to 2012, when the minimum wage increased by 0.6%. Suffice to say that the unions are demanding more from the State.

You should know that 11.8% of employees in the private sector (around 2.1 million people) are affected by this increase. However, for part-time employees, the actual gain on this increase is extremely small and should have no impact. Many high-intensity sectors such as hospitality, construction or retail include a large number of low-skilled employees paid the minimum wage. These sectors are the main beneficiaries of this increase.

This increase will also have an impact on several social benefits or other allowances directly indexed to the amount of the minimum wage. We can cite the activity bonus for example, which will therefore see its amount adjusted.

You should know that the government has no impact on private sector salaries and that it is not because the minimum wage increases that salaries just a little higher will experience a corresponding increase. This will therefore depend on the professional branches and associated conventions, otherwise it could cause a phenomenon of overwriting.

This is a phenomenon where the experience or qualification of an employee paid just above the minimum wage sees their job devalued by its proximity to the minimum wage. We are therefore witnessing a downgrading and many employees find themselves “stuck” at the minimum wage until internal negotiations are successful.

To facilitate these negotiations, a decree should be put in place at the same time as the increase in the minimum wage. The “Guedj” decree affects the mechanisms for reducing charges. It plans to modify the methods for calculating exemptions from employer contributions by no longer using the minimum wage as a reference, but on the first level of remuneration for each professional branch. This is to push companies to revalue these first levels while one professional branch in two has not renegotiated its salary scale for 10 years and sixty-nine branches still have agreements lower than the minimum wage.

Machine-translated from French