Presidential Elections: Candidates’ Proposals on Minimum Wages

Most candidates in the presidential election intend to increase the minimum wage in France or reduce taxes and social security contributions that put pressure on low wages. The issue of revaluing the minimum wage divides economists. Overview.

Many candidates for increasing Smic

The possible revaluation of the Interoccupational Minimum Wage (IRW) is one of the main challenges of the current presidential campaign in economic matters. According to the Department of Animation, Research, Research and Statistics (DARES), the currently established gross monthly amount of 1,603.12 euros or 1,269.03 euros net, the minimum wage applies to almost 2 million employees, or about 12% of employees labor. Thus, the decision to raise the minimum wage is one of the options for direct incentives for the government purchasing power these workers, but also influence the evolution of all wages in France. In the context noted return of inflationThus, the minimum wage proposals of various candidates are scrutinized.

Many presidential candidates propose reassessment of the minimum wage, albeit in very different proportions. The minimum wage will be set at €1,400 net for Jean-Luc Mélenchon and Jean Lassalle, €1,446 net for Anne Hidalgo, €1,500 net for Fabien Roussel, €1,500 net by the end of the five-year term for Yannick Jadot, €1,800 net for Philippe Putou and finally 2,000 euros net for Nathalie Artaud.

Minimum wage reassessment regime

in minimum wage revaluation method enshrined in Article 3231 of the Labor Code, which provides for three cases:

– Revaluation of the minimum wage to 1uh January of each year, taking into account the inflation observed for households in the first quintile of the distribution of living standards and the increase in the purchasing power of the average hourly wage of workers and employees;

– reassessment of the minimum wage during the year if the non-tobacco consumer price index for households in the first quintile of the living standard distribution exceeds 2%. The minimum wage is then increased by the same percentage as the change in that index;

– Finally, the government can decide at any time to raise the minimum wage. Then we’re talking about “raising”. It is through this third case that the above propositions are to be understood.

Other political figures – the most right-wing in the political spectrum: Nicolas Dupont-Aignan, Marine Le Pen and Eric Zemmour – for their part propose not to raise Smic directly, but reduce taxes and social security contributions on low wages.

Finally, Valerie Pecresse and Emmanuel Macron, to our knowledge, have not submitted any proposals regarding the size of the minimum wage.

Revaluing the minimum wage: what do economists think?

On the re-evaluation of Smeek, as on many issues, there is no consensus among economists. For some, a reassessment of the minimum wage would be desirable, as it would increase the purchasing power of the workers who receive it. This will lead to positive dynamics in which wage increases will stimulate demand and hence economic activity in general.

Work on minimum wage awarded Nobel Prize in Economics

David Cardone of the winners of the 2021 Nobel Prize in Economics, showed in an influential article published in 1994 thatNew Jersey Minimum Wage Raise Doesn’t Have a Negative Impact on Employment. To do this, he and his co-author Alan Kruger compared the evolution of employment in restaurants in fast food in New Jersey and Pennsylvania, a neighboring state unaffected by the minimum wage increase, and found no major discrepancies there.

For other economists, on the contrary, an increase in the minimum wage would have the disadvantage of affecting business and to punish by increasing the cost of labor the employment of the population, traditionally more affected by unemployment : youth and less qualified people.

These arguments are also regularly reviewed by the Smic Committee of Experts, responsible for making annual decisions on changes to the minimum wage and advising the government on possible “increases”. In its 2021 annual report, the Committee wrote:

The context of the very gradual recovery from the COVID crisis suggests that the consolidation of recent strong jobs is being prioritized rather than increasing the purchasing power of wages. Moreover, before the COVID crisis, the structural situation in the French economy was improving but remained fragile, with still very high unemployment and relatively weak competitiveness, as evidenced by the persistently negative trade balance since 2006. to reduce working poverty, the first factor of which is the number of hours worked, which far exceeds the level of hourly wages.

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