Taking the French out of “Smicardization”.

PAmong the realities that demoralize many French people and fuel the opposition vote, there is one thing that stands out at the end of every month: their pay slip. Half of French workers receive less than 2,091 euros net per month – the average salary in 2022 – and an increasing proportion of them fall below the minimum wage level, set at 1,398.69 euros net. While these minimum wage workers were only 12% of the workforce just three years ago, today they represent 17%, or more than 3.1 million.

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The phenomenon seen in the early 2000s, when the 35-hour week became widespread, is not new. The “yellow vest” movement of 2018-2019 highlighted the anger of workers at the impossible end, due to increases in fuel taxes. But inflation returns from 2022 are pushing more workers into the “low wage trap” through a pernicious mechanism.

While the minimum wage, the only wage legally indexed to price increases, has been increased several times (+12.6% in total since 2021), the basic salary of employees and workers (+9%) has not been followed. The result: battalions of people hitherto paid little more than the minimum wage, and aspiring to the minimum level, are on the rise. The feeling of downgrading that grips the victims of this “smickardization” is the holy grail of demagogues, especially the extreme right. This erosion of purchasing power undermines commitment to work and weighs on consumption, the main driver of the French economy.

Low wages are maintained by a system of exemptions from the minimum wage alone that encourages employers to keep workers, because the additional cost of paying them out is high. Conversely, an employee “caught” by the minimum wage is a boon to the boss in terms of exemption from charges.

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There is an urgent need to correct the harmful consequences of such practices, without waiting for the slow rebalancing expected from a slowdown in inflation. Emmanuel Macron, promises “Do everything to improve the pay of the work”

, during his press conference on January 16, seems to have understood this. Steps are yet to be taken to get out of that situation, which, if it depends primarily on the balance of power and negotiations between unions and employers, is also vulnerable to state action.

If the return to the common wage index, abandoned in 1983, cannot produce a lasting response due to its inflationary nature, it is up to the government to strongly encourage the social partners to raise the traditional minimum in professional branches where they are below the minimum. The wage state should favor employers who share their profits more equitably with their employees and who encourage them by providing training opportunities to promote skill development and mobility from one company to another, important factors in promotion.

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But the main lever available to the executive is through an overhaul of the system to reduce charges on low salaries. Reduce contributions to salaries slightly above the minimum wage, make exemptions conditional on promotional actions, etc. All incentives to pay employees better should be explored. Social justice, the dignity of workers and the unity of the country are at stake.

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