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Economy

ORIGINAL FRENCH ARTICLE: Smic : un coup de froid

by Yves Housson

Minimum Wage: No Thaw

Translated Friday 29 June 2012, by Gene Zbikowski and reviewed by Derek Hanson

The government grants a smidgeon of an increase – 6.50 euros a month. The employers’ association is satisfied.

In the end, the above-inflation increase promised by presidential candidate Hollande comes down – as was feared in these columns – to a smidgeon and amounts, in the words of the spokesman for the French Communist Party, Olivier Dartigolles, to “a freezing cold snap” for the French people who are hoping for a change.

There will be a 2% upward adjustment of the minimum wage on July 1, that is to say, a monthly increase of 21.50 euros for a full-time worker, the Minister of Labor, Michel Sapin, announced yesterday. The increase breaks down as follows: 1.4% to match inflation since the beginning of the year, in other words, early compensation for inflation (the legally-mandated adjustment of the minimum wage was only due on January 1, 2013) and 0.6% as an “above inflation” increase, properly speaking. For the 2.5 million workers who earn the minimum wage, this comes down to a net gain of 6.5 euros a month. This is “substantial for those concerned, but will not destabilize the country’s economic fabric,” the Minister of Labor swears, patting himself on the back for having “broken with the policy of the previous government which, out of dogmatism, refused any above-inflation increase.”

In this matter there can be no doubt that the Ayrault government more clearly heard the siren song of the employers than the complaints of the trade union representatives of the world of labor. This is “a very deep disappointment and a very bad signal is being sent to the employees, who notably voted for François Hollande,” was the analysis of Paul Fourier for the CGT trade union confederation, which was demanding a 1700-euro-a-month gross minimum wage. This “is going to create frustration and discontent among the employees,” said Marie-Alice Medeuf-Andrieu for the FO confederation.

The reaction of the MEDEF, the main French employers’ association, the reaction was moderate. Benoît Roger-Vasselin described the measure as “a reasonable increase,” adding “We have the feeling that the government recognized our worries regarding the situation of the companies.” For her part, Laurence Parisot, the president of the MEDEF, commented that “it has understood the reality of today’s economy and the main objective, which is jobs.” The general association of bosses of small and medium-sized enterprises (CPGME), for its part, stood out by maintaining its fear of “the destruction” of tens of thousands of jobs.

On the left, while Martine Billard, spokeswoman for the Party of the Left, pointed out that the measure “will scarcely change employees’ daily lives,” the spokesman for the French Communist Party condemned a “capitulation.”


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