All his life at 1300 euros net? Why a large number of employees risk being trapped on the minimum wage

BFM Business

While the Smic is increasing steadily, more than 70% of the major professional branches now have salary grids below the minimum wage. It thus sometimes takes several years for an employee to take off from the minimum wage.

Three increases in less than a year. Since last fall, the minimum wage has increased every quarter. From 2.2% on October 1, 2021, from 0.9% in January and from 2.65% last May. And it’s not over. According to INSEE, a fourth revaluation should take place by next autumn due to inflation which should remain above 2% in the coming months.

A priori good news in this period of galloping inflation for people paid the minimum wage and who represented 12% of the total of private sector employees in 2021 according to Dares.

The problem is that with each new rise in the Smic, an increasing number of professional branches find themselves outside the nails. Their salary scales are partly below this minimum wage. Of the 171 professional branches with more than 5,000 employees, 120 of them have conventional minimum wages below the minimum wage. A record. They were only 37 on December 31, 2020 and 108 last October. Since the inflationary surge of 2021, their number has tripled.

This does not mean that employees in these branches are paid below the minimum wage, which is illegal. On the other hand, many employees risk being trapped at this minimum wage.

“These increases will increase the number of employees around the Smic, warns Thierry Pech, the general manager of Terra Nova who publishes a study on “lifetime smicards”. This causes discomfort among employees and accentuates recruitment tensions.

The “smic trap”

How to explain this “smic trap”? If companies are required to pay their employees at least 1645.58 euros gross (the Smic on May 1, 2022), i.e. approximately 1300 euros net per month, they have the right to then apply the evolution of remuneration according to the grids. conventional. However, if several levels of these grids are below the minimum wage, wages may not change for several years, the time that the conventional level catches up and exceeds the level of the minimum wage.

In the industrial poultry sector, for example, at the start of the year there were “twelve coefficientsbelow the minimum wage”, we recall on the side of the CFDT. In other words, if we can hope to cross a level every 12 months, it would theoretically take 12 years to catch up with the minimum wage.

“In some sectors of the food industry, workers find themselves today and for many years” glued “to the minimum wage even though their skills and experience increase over time, notes the Terra Nova study. This situation is a factor of injustice, even resentment for those concerned.

Whether you have four, five or six years of experience, you will then receive the same salary as a beginner in your sector. And with the successive increases in the minimum wage, more and more employees are likely to be affected in the years to come.

“This story is a bit like that of the rock of Sisyphus: even though it takes many months (and sometimes years…) to raise the minima of the branch to the level of the national minimum wage, the slightest increase in the latter imposes to start again…”, worries the think tank.

The most efficient branches for purchasing power

All the more urgent as the rise in the minima for the branch would have more positive effects on purchasing power than the rise in the minimum wage. A 2018 INSEE study showed that, in companies with more than 10 employees, an increase in branch minima leads to more frequent wage increases than an equivalent increase in the minimum wage.

“All other things being equal, in companies with 10 or more employees, a 1% increase in the conventional minima increases the probability of revaluation by 2.1 points, against 0.8 point for a similar increase in the Smic”, conclude the researchers.

Hence the government’s eagerness to encourage branches to quickly renegotiate their salary scales.

The problem is that some are dragging their feet. First, because with inflation, many companies prefer to contain their cost increases by taking advantage of exemptions. Employers benefit, under certain conditions, from a reduction in contributions and employer contributions on remuneration of less than 1.6 Smic per year. The renegotiation of the grids could cause them to lose this tax advantage on a large number of employees.

After the carrot, the stick

However, how can they be forced to review their salary scales? First by enjoining them to renegotiate. This is what Elisabeth Borne, then Minister of Labor of the previous government or Gérard Larcher did in 2005, then Minister Delegate for Labor Relations under Chirac, noting that the number of Smicards had reached a record level in France with 16.3 % earners at minimum wage.

If these incentives can be fruitful, they are no longer enough when the minimum wage increases every three months. More coercive measures are then necessary. This is what Terra Nova advocates.

First by playing on the levels of contribution exemption. If your branch does not adapt their grids, companies in the sector no longer benefit from tax aid.

“It was the Sarkozy method in 2007, recalls Thierry Pech. But it was not adopted because it was considered unfair for companies that they played the game in non-virtuous branches.”

The think tank is therefore considering a more complex system where the whole branch would receive a penalty in terms of exemption, with the exception of virtuous companies which would update their remuneration grid within the company agreements.

But it is a third way that would be favored by the government. To encourage the social partners of the branches to negotiate regularly, the Ministry of Labor is considering the threat of administrative merger. If a sector does not update its grids, it could be merged with another that is quicker to adapt to Smic increases. In the bill on purchasing power which should be presented on July 6, the low level of wage negotiations will be a criterion for merging two branches together. Will the government stick be effective?

Frederic Bianchi

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