The next regional elections will not take place until 2028. However, Valérie Pécresse already seems to be getting ahead. In an interview given to 20 minutes, the president of the Ile-de-France region tried her hand at the traditional Lépine competition of measures by lifting the veil on a package of 40 proposals which must be put to the vote during the Regional Council this Wednesday, September 20. Among them, the creation of a regional minimum wage.
“The cost of living is 8.8% more in Ile-de-France. If we wanted purchasing power parity in all regions, the minimum wage should be 9% or 8.8%. more in Ile-de-France”, declared the LR leader. For economist Gilbert Cet, professor at Neoma Business School and president of the group of experts on the minimum wage, this measure is inappropriate and could even have a strong impact on the region’s economy by pushing businesses to leave.
L’Express: What does Valérie Pécresse’s proposal inspire you?
Gilbert This: It is a shame that Valérie Pécresse, before making proposals of this type, does not read with more attention the public reports of the group of experts on the minimum wage which dealt with this subject. She would have found a very useful source of inspiration for her remarks. In the 2017 report, we asked ourselves the question of the relevance of a regional minimum wage. With kindness, moreover, because the initial postulate is real: price levels are different depending on the region and people do not have the same purchasing power from one region to another, for the same Nominal minimum wage.
We ultimately found that this option was not relevant, by looking at the price indices at a very fine level, constructed by INSEE. Firstly, the differences in price levels are mainly linked to rents. Secondly, these differences are very granular, within the same region. Take the Paris metropolitan area: rent in Seine-Saint-Denis or in the 16th arrondissement for the same surface area is not exactly the same thing. It is not regional minimum wages that are needed to compensate for these differences, but thousands of minimum wages. Noticing this, we said to ourselves that such a proposal made absolutely no sense.
Could this measure reduce tensions in certain professions in the public service, as the president of Ile-de-France suggests?
This is obviously a bad argument. It’s not just the public service that pays salaries, businesses too. These would be subject to different salaries depending on their location, knowing that their own employees do not necessarily live in the city where they are located? The rents to which employees are exposed do not necessarily correspond to the level of rents where the company is located. Furthermore, in a couple, one may work in one place and the other elsewhere. On the edge of Ile-de-France, there would therefore be people with a higher minimum wage, even though they can live in the next region? And what about employees domiciled in Seine-Saint-Denis whose certain colleagues reside in Neuilly or in the 16th arrondissement for the simple reason that their spouse has greater resources?
Zero points, in short?
We are completely missing the point, and in various ways. In our last report for 2022, we looked at in-work poverty. Let’s talk about it seriously. The main factor in working poverty is not hourly wages, but insufficient hours worked. Part-time workers are very often working poor. Among them, there are many, around 40%, forced into this part-time work. How can we support these people to increase their number of working hours? It is the social partners who must be contacted, this is part of their prerogatives. Collective bargaining should be mobilized on this issue, in the branches and in the companies. This story of regional minimum wage does not answer either the question of price levels according to the localities that it claims to raise, nor the legitimate concern of reducing working poverty.
Would this measure not risk creating competition between regions to attract employees?
Effectively. But if we introduced a higher minimum wage in Ile-de-France, it is a safe bet that some companies would leave the region to settle in the one next door, where the minimum wage would be lower. Valérie Pécresse is therefore hitting her own community with energy… She wants to reduce employment there? This is a truly surprising proposition. As we know, intuition is often a bad advisor.
What can the region do to help minimum wage workers?
If Valérie Pécresse wants to do things, she has the means. There are what we call related rights. These are policies developed by local authorities, often by municipalities, but sometimes by departments or regions, and which consist of helping certain populations in difficulty. If she thinks that it is necessary to specifically support minimum wage workers, nothing prevents her from doing so at the regional level. But it is the region that will pay, not the companies.