The government is announcing a 1.6% increase in the minimum wage from December: is this a falsely good idea that risks further raising prices and destroying jobs?

It's been a fortnight since the Minister of Labor Jean-Pierre Farandou has been in dialogue with the social partners to place the cursor on the revaluation of the minimum wage. While it should normally take place on January 1st, it is already almost established that it will be brought forward by one month, i.e. December 1st. It now remains to be seen how much the minimum wage will increase...

And that's where the problem lies. On the one hand, the CFDT and the CGT are respectively demanding an increase of 100 and 150 euros net per month. Opposite, the employers are putting on the brakes, recalling that the minimum wage has already been increased twice this year: +1.18% on January 1st and +2.41% on June 1st - the second increase having been triggered by inflation which had crossed the 2% threshold in May.

As for the government, we are considering giving a (small) boost in addition to the mechanical increase calculated according to the evolution of the consumer price index. But a priori not enough to satisfy either the unions or the employers. In an interview with La Tribune Dimanche, Jean-Pierre Farandou prepared people's minds for an evolution of the minimum wage beyond 1.

500 euros net, or around twenty euros more... But that's all. Risk of rising consumer prices And that's already too much for Enzo Sejnera, who runs 17 hair salons in the Pays d'Aix with 130 employees: "raising the minimum wage is good for purchasing power but for us, it will lead to a 'cascade effect', that is to say we will have to increase salaries above the minimum wage as well," he confides to BFMTV.

“Even if the government grants exemptions from employer contributions, it will not compensate for the increase in costs,” he laments. It should be remembered that during the previous revaluation of the minimum wage on June 1, the government froze the contribution reductions, which remain calculated on the old amount of the minimum wage on January 1. And that's without taking into account the draft finance law (PLF) which, in its initial copy, plans to increase the bill for companies by integrating participation and profit-sharing bonuses in the calculation of reductions in employer contributions and to maintain their freezing despite the evolution of the minimum wage which follows inflation.

“So the consequence is the customer who will pay the price because we will have to increase prices. The men's cut will exceed 30 euros, doing a color for women will exceed 35 euros after December 1,” warns the hair salon boss. In other words, an increase in the minimum wage decided to support purchasing power would, ultimately, result in further increasing consumer prices.

Machine-translated from French