Minimum wage, inflation, energy… What is a candidate program for purchasing power?

Dropped early in the campaign in favor of security and immigration themes, spending power has returned to the center of the 2022 presidential election for several weeks. A priority topic for 57% of the French, according to an Elabe poll on March 16, 2022, between the war in Ukraine, rising energy prices, the uncertainty of the recovery from the coronavirus and global inflation. This is twice as much as healthcare (28%) and security (24%), which close the podium and outstrip the war in Ukraine (15%).

The current government has invested heavily in purchasing power in recent months by consolidating measures: energy checks, gas price protection, electricity price caps … The last launch to date is this Friday with a 15 cent discount on the price of a liter of fuel. Actions that, of course, do not prevent other presidential candidates from also wanting to be imposed on this topic. A small overview of the strength of the various proposals.

Minimal salary

A measure of the left par excellence, Smeek’s increase is planned by most of the candidates from that political party. An increase of 10% for Jean-Luc Mélenchon (LFI), 15% for Anne Hidalgo (PS) and 18% for Yannick Jadot (EELV) and Fabien Roussel (PC). Everyone knows that Smic is the only private sector wage that the state can increase since it cannot interfere with the payroll of companies.

But raising the minimum wage could prove counterproductive, according to economist Stephanie Willers: “Raising the minimum wage often causes wages to stagnate, which doesn’t help purchasing power. This creates minimum wage jobs.” According to the expert, too high a minimum wage will make it even more difficult for companies to pay higher incomes. In 1967, only 2% of workers received the minimum wage, compared to 12% in 2021. The economist recalls that France already has one of the highest minimum incomes in Europe. Macroni also tried not to touch him too hard during the five-year term.

Low payroll taxes

Not wanting to touch the minimum wage, the right wants to increase purchasing power by lowering social security contributions, which should allow companies to raise wages. This is, in particular, the flagship measure of Valerie Pecresse (Les Républicains). She aims to increase the lowest wage (less than 2,800 euros per month) by 10% by the end of her five-year term, including a 3% increase from the first year of her presidency. To do this, the Republican candidate wants to reduce the old-age insurance premiums paid by workers by 2.4 points, and this measure would be completely taken over by the state.

Eric Zemmour (Reconquête) wants to reduce the overall social contribution for workers earning less than 2,000 euros per month, while Marine Le Pen (RN) offers an exemption from employer contributions for any salary increase of 10% (for wages up to three times Smic ). Emmanuel Macron wants the abolition of the audiovisual royalty and the abolition of the contribution to the added value of companies.

Measures that are not in doubt, Stephanie Willer emphasizes: “The reduction in social contributions is obviously costly for the state, but the programs are rather vague.” A state whose deficit is also especially high after “Any Cost”. For Valerie Pecresse, compensation must come from several major reforms, such as pensions, the degressiveness of unemployment insurance, and the elimination of 150,000 civil servants. Eric Zemmour wants to limit social benefits for foreigners. Emmanuel Macron wants to limit South Africa by forcing activity, as well as reform the pension system.

Inflation

For Stephanie Willer, this is a big disadvantage among candidates. “They drew up their program in November 2021, long before the Ukrainian crisis and with inflation less than 2%.” Far, far away from the current situation, the Bank of France predicts a possible inflation of more than 5% by 2022. The figure, “not achieved for decades,” the economist clarifies.

Consequence: “The programs hit the current situation and no longer meet the fears of the French,” Stephanie Viller insists. While it is certainly normal for candidates to look at the long term, “inflation is such today that it would be important to respond specifically to it. “For example, the 3% pay rise that Valerie Pecresse had wanted since the first year “corresponded to 2% inflation, but became obsolete with a 5% price increase. Without necessarily raising the minimum wage, special measures would be needed for the low wages most affected by inflation.”

energy

This is the only economic aspect of the Ukrainian crisis that is really taken into account. Jean-Luc Mélenchon calls for a freeze on gas and electricity prices. Anne Hidalgo, Valerie Pecresse and Marine Le Pen want to reduce VAT on energy products to 5.5%. The measure, which Stephanie Viller called “demagogic”: “France already has a chronic deficit to deal with, we must explain where we will find the money for such a reduction in energy VAT.”

The method is more cyclical for Yannick Jadot and Fabien Roussel, who propose to increase the price of the energy bill.

Work more to earn more

Finally, the great mantra of the right: the opportunity to work harder to increase your purchasing power. Emmanuel Macron wants to create a monetizable universal time-saving account for RTT, while Valerie Pecresse wants to tax-free overtime. Just like Eric Zemmour who adds zero pay bonuses (up to three months extra net pay with zero Urssaf).

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