To facilitate “de-emphasis,” a report submitted to the government recommends “revitalizing wages”

So that the lowest paid employees can receive a raise more easily, economists propose distributing contribution reductions differently.

Commissioned in November by the previous government, economists Antoine Bozio and Etienne Wasmer completed their highly anticipated report on the “desmicardization”. This barbaric word designates the stated intention to fight against a common phenomenon, whereby employees paid the minimum wage “catch up”, via successive increases in the minimum wage, a portion of the low wages which until then were slightly above this threshold. To remedy this, “we propose to break the dynamic consisting of constantly strengthening exemptions on low salaries”write the two experts in the final version of their work, submitted Thursday October 3 to the government.

So that the lowest paid employees can receive increases more easily, the report therefore proposes distributing contribution reductions differently, currently highly concentrated at the minimum wage level. In the central scenario detailed by the authors, the contributions paid by employers would then be increased on salaries whose amount is between 1 and 1.2 minimum wage, then reduced between 1.2 and 1.9 minimum wage and increased between 1. 9 and 3.5 minimum wage. In this scenario, theThe reductions would stop at 2.5 minimum wage, compared to 3.5 minimum wage today.

Due to a system of exemptions which has gradually been implemented in France over the past three decades, the contribution rate which weighs on a minimum wage is now only 6.9%, compared to 45% in 1993, which which places our country at the bottom of the OECD table. Especially since the number of employees paid the minimum wage has increased significantly in France, representing 17.3% of employees on January 1, 2023.

In certain cases, with the current system, the employee himself is not encouraged to ask for an increase, because he may lose all or part of his activity bonus (paid subject to means conditions). Thus, for a single person without children at the minimum wage level, “the increase in labor costs necessary for an increase in disposable income of 100 euros per month is, in October 2023, 483 euros, of which 78 euros can be explained by the variation in the activity bonus”according to the report.

With the central scenario, the cost of increasing employees would decrease “quite significantly around 10%”. In the case of a single person without children at the minimum wage level, the increase of 100 euros would thus cost 430 euros and no longer 483 eurosexplain the economists.