The revaluation of the minimum wage put to the test by Michel Barnier

© THIERRY CHARLIER/AFP Michel Barnier, July 20, 2017 in Brussels.

Although the INSEE finds an increase in the minimum wage unlikely due to the decline in inflation, the subject has been put back on the table by the new Prime Minister, Michel Barnier.The latter having announced that work should pay more, Les Échos then attest that “two levers” are possible for him. The first, an “immediate boost”; and the second, the use of the recommendations of the Bozio-Wasmer report.

The latest economic report from INSEE, released this Monday, September 9, reports a stabilization of consumer prices. Enough to enter into confrontation with the prospect of an increase in the minimum wage which was intended to offer better purchasing power to the French.

Three legal provisions allow the government to change the minimum wage. The first is the revision on January 1st. This must be accompanied by consistency in certain increases in order to unblock levels that are evidence of the need for revaluation. The second can be done during the year, if the previously mentioned index increases by at least 2% compared to the last revaluation. The third provision is simply initiated by the government, regardless of the period.

While the first two provisions cannot be released for the moment, all that remains is the goodwill of the government. The increase of 200 euros net recommended by the New Popular Front, however, is causing concern among employers. With such an increase, this would only actually put 85 euros into the employee's account, while the employer would have to pay 400 euros in return.

In a deadlock, there remains a measure already highlighted by the progress document of the Bozio-Wasmer report. With the final version soon to be released, the former Prime Minister, Gabriel Attal, has nevertheless taken care to pass the baby on to his successor by indicating the procedure to follow, namely “de-micardisation”. The process would consist of an overhaul of the contribution exemptions by relying on a single system decreasing up to three minimum wages. This is to allow an increase for employees while making it less expensive for companies. 

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