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Economy

ORIGINAL FRENCH ARTICLE: Trois centimes pour les smicards

by Fanny Doumayrou

Three Cents for People on Minimum Wage

Translated Thursday 27 December 2012, by Gene Zbikowski and reviewed by Derek Hanson

On Dec. 17 the French government announced a 0.3% hike in the minimum wage from Jan. 1. This corresponds to three eurocents an hour. The mechanism governing increases in the minimum wage is to be reformed.

A small raise for people on the minimum wage, but no more. On Dec. 17, before the National Commission on Collective Bargaining (CNNC), the Minister for Labor, Michel Sapin, confirmed that the government will not grant any above-inflation hike in the minimum wage on January 1.

The minimum wage will only rise in accordance with the legal mechanism for keeping pace with inflation and changes in worker salaries. This means a 0.3% rise, which will increase the gross hourly wage from 9.40 to 9.43 euros. For a full-time worker, the gross monthly increase is from 1,425.67 to 1,430.22 euros, a net increase of 3.50 euros a month.

“This is a measured and fair decision,” said Minister Sapin, for whom François Hollande’s promise to boost the minimum wage was kept … last July. Back then, inflation triggered an intermediary hike of 1.3%, to which the government added a 0.6 percent bonus. The minister underlined that over the year 2012 the minimum wage has increased by 2.3%. With inflation at 1.3%, this corresponds to a 1% gain in purchasing power.

This is not enough to satisfy the CGT and FO trade unions, which were demanding a gross minimum wage of 1,700 euros a month. “The government has remained inflexible whereas it was necessary to make a gesture to workers,” Force Ouvrière thundered, while CGT leader Bernard Thibault criticized a “fake rise in the minimum wage,” which has to be compared to the “20 billion euros in public aid” granted by the government to private businesses.

On the political front, the French Communist Party condemned “bad service done to the economy” and suggested indexing the minimum wage on the salaries of the bosses running the top 40 companies listed on the Paris Stock Exchange. The Party of the Left complained that there is “never money for workers earning the minimum wage.”

The Minister for Labor also announced a reform in the mechanism governing increases in the minimum wage, which will come into effect in 2014. On the one hand, inflation will no longer be calculated using the index of household expenses for blue-collar and white-collar workers, but rather the index of household expenses of the poorest 20% of French households. On the other hand, changes in worker salaries will be based on the hourly wages of blue-collar and white-collar workers, and not on the hourly wages of blue-collar workers alone.

While the first measure goes in the right direction by better taking into account price hikes that affect the lowest-paid workers, the second measure may lead to slowing down increases in the minimum wage.

“The two measures are likely to cancel each other out,” complained Pascal Debay, the CGT leader assigned to wage questions.


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