Fourth year without a boost in statutory minimum pay

On 1 January 2010, the country’s statutory minimum pay was increased by 0.5% to €8.86 an hour. This increase is in line with legal obligations. For the first time ever, the rise was made on 1 January rather than on 1 July, following a reform introduced by a law adopted in December 2008. Although employers are satisfied with the increase, all of the trade unions have denounced the increase as inadequate.

Minimal increase

Following the latest increase at the beginning of January 2010, the hourly rate of the national minimum wage (salaire minimum interprofessionnel de croissance, SMIC) is now €8.86 – constituting a gross increase of €0.04 and a net increase of about €0.02 an hour. Thus, for a 35-hour week, the gross monthly minimum pay amounts to €1,343.77 and the net monthly SMIC to €1,056.24. Currently, about 10% of all employees are affected by the SMIC increase. In terms of the SMIC’s percentage of hourly labour productivity, the country’s minimum pay is now at its lowest level in 60 years.

The legal minimum increase in the SMIC must take into account at least two factors, namely:

• the development of inflation, on the basis of the consumer price index (CPI), excluding tobacco;

• half of the increase in the purchasing power of manual workers’ basic pay.

This is the fourth consecutive year that the government has decided to limit the SMIC increase to the legal minimum amount (FR0708039I, FR0607019I). The increase was announced by the Minister of Labour, Xavier Darcos, during a meeting of the National Collective Bargaining Commission (Commission nationale de la négociation collective, CNNC), held on 15 December 2009, and confirmed by the Council of Ministers on 16 December.

New legal provisions

For the first time since its creation in 1970, the increase in the SMIC has occurred on 1 January. This is due to the legislative change that was adopted on 3 December 2008, which modified the timetable for SMIC increases so that they would be known before annual company and sectoral pay bargaining. It is hoped that this will lead to more dynamic pay bargaining. The 2008 law also created a group of government-appointed experts, which must give an opinion each year on the development of the SMIC. The government’s latest decision is based on the conclusions of this group of experts, which recommended that the SMIC’s increase should ‘correspond to the strict implementation of legal mechanisms’.

Employers satisfied

The employers appear to be satisfied with the government’s announcement, although their reactions were discreet. The President of the Movement of French Enterprises (Mouvement des entreprises de France, MEDEF), Laurence Parisot, remarked that it was ‘healthy that there was no longer a political approach’. MEDEF’s chief negotiator, Benoît Roger Vasselin, justified his organisation’s position by emphasising that ‘difficulties exist for employees in the same way as they exist for companies’. The General Confederation of Small and Medium-sized Enterprises (Confédération générale des petites et moyennes entreprises, CGPME) expressed its ‘satisfaction’ with the rise, while the Craftwork Employers’ Association (Union professionnelle artisanale, UPA) considered the increase to be ‘reasonable’, given the cash flow problems resulting from the current economic crisis.

Trade unions remain critical

The trade unions unanimously denounced the tiny increase in the SMIC. According to the National Secretary of the General Confederation of Labour (Confédération générale du travail, CGT), Maryse Dumas, ‘this is not even an increase; it is a freeze for those on minimum pay’. Ms Dumas also raised questions over ‘what has happened to undertakings regarding a different distribution of wealth’. The National Secretary of the French Democratic Confederation of Labour (Confédération française démocratique du travail, CFDT), Laurence Laigo, argued that ‘the exceptional crisis situation was worthy of a boost’ to minimum pay. CFDT was arguing for an increase of at least 1.5%.

The Confederal Secretary of the General Confederation of Labour – Force ouvrière (Confédération générale du travail – Force ouvrière, CGT-FO), Marie-Alice Medeuf-Andrieu, was highly critical of the fact that there was no boost for the SMIC, emphasising that ‘in this context of economic crisis and social crisis, more and more employees are going to be in very insecure situations’. Vice-President of the French Christian Workers’ Confederation (Confédération française des travailleurs chrétiens, CFTC), Gabrielle Simon, considered the 0.5% increase of the SMIC to be ‘insufficient’, arguing that ‘billions of euro are being put into the economy, but there is only the strict minimum for employees’.

Pierre Concialdi, Institute for Economic and Social Research (IRES)