The “de-microcardialization” of the economy was made by Gabriel Attal as one of the priorities of the new government. Behind this phonetically atrocious term hides a very French specificity: the share of employees paid the minimum wage continues to increase. It reached 17% in 2023. According to the OECD, the minimum wage is equivalent to 60% of the French median income, a record in Europe. These figures mean that there are more and more minimum wage earners, but also that a growing share of employees in our country are paid close to the minimum wage.
The word “smicardisation” is ugly but it expresses a worrying reality. This crushing of the salary scale reflects a lack of salary dynamism which poses a real concern for social mobility. In a society that has a high opinion of itself, the fact that remuneration converges towards the minimum wage, even if it is increasing, is something of despair.
Fundamentally, we will find sustainable salary dynamics at all levels when our productivity and growth are higher. We cannot constrain the laws of economic gravitation: it is impossible to generate wages without growth, and growth without productivity. However, France’s growth is around 1% and productivity has been declining since Covid. With an ounce of provocation, but without distorting reality, we could say that current growth is miraculous given productivity, and that the increase in wages is miraculous given growth.
Our country will regain its wage punch, beyond the increases in the minimum wage, when our education and continuing training system has improved, when industry is robotized, when service companies know how to use artificial intelligence. This will take time, but we need results now.
“Destatize” the minimum wage
It is for this reason that the Prime Minister and the Minister of Labor, Catherine Vautrin, should take note of the remarkable work that has just been published for the Institut Montaigne by the lawyer Franck Morel, who was notably the social advisor to Edouard Philippe in Matignon or Xavier Bertrand Rue de Grenelle. Morel recalls that the reductions in charges close to the minimum wage have largely contributed to the crushing of the salary scale.
In the 1990s, these reductions made it possible to reduce the cost of low-skilled labor and increase the employment rate in this category of the population. Faced with unemployment, this policy is a success. On the other hand, it generates a “low-wage trap”. To increase a single employee’s minimum wage by 100 euros net per month after tax, the economist Gilbert Cet showed that the employer had to pay 483 euros: employer and employee social security contributions increase by 281 euros, even though this employee loses 78 euros activity bonus and must pay 23 euros in income tax.
Reducing the progressiveness of contributions would partially close this trap. But such a reform would be complex and could affect employment, which is obviously not desirable. Franck Morel therefore proposes to “destatize” the minimum wage, established today by decree, and to entrust its setting to the social partners, branch by branch.
Are the unions ready for it?
This conventionalization, which would inject freedom into our social contract while preserving it, would also offer sector negotiators the possibility of modulating the level of the minimum wage according to the territories, which would be logical from an economic point of view. The labor and real estate markets, and even consumer prices, are not the same in Paris, Bordeaux or Lunel. The social partners could thus approach the salary scale as a whole, according to the specificities of their sector, and integrate this local problem of “smicardisation” into their decisions. Are the unions, which are so inclined to criticize, often rightly, state interventionism, ready to take on this responsibility?
* Nicolas Bouzou, economist and essayist, is director of the consulting firm Astères
.