4 November 2021

Wage increases, companies can do (much) better!

Wage increases, companies can do (much) better!

According to an ELABE survey for BFM TV published on 20 October 2021, purchasing power is now the number one concern of the French.   

This is happening in a context where, when the CAC 40 companies make 79.5 billion euros in profits in 2019, 60 billion are paid out to shareholders (i.e. more than 75% of total profits), and the 120 best paid bosses in France earn between 680 and 1700 years of SMIC per year. All these indicators show the extent to which the equity ratio, introduced by the PACTE law, has yet to prove its operational worth.  

What do the main politicians and presidential candidates say?  

At the beginning of September, Prime Minister Jean Castex asked the social partners to open negotiations on salaries and announced on Wednesday 21 October the granting of an " inflation bonus " for 38 million French people.

On the left, Arnaud Montebourg (ex PS) proposes to increase the SMIC, Anne Hidalgo (PS) to double the salary of teachers and to revalue the salaries of the so-called "first line" jobs. Jean-Luc Mélenchon (LFI) also proposes an increase in the SMIC, as well as a specific allowance for 18-25 year olds and a limitation of wage gaps in companies. Finally, Yannick Jadot (EELV) proposes instead to " give back to the French the equivalent of a thirteenth month's savings " by investing 50 billion euros per year in housing, transport, and improving food.

On the right, Valérie Pécresse proposes instead a reduction in social security contributions for companies, which would increase net pay slips by 10%. For Xavier Bertrand, it is " the remuneration of work according to the company's results" that must "become a fundamental principle " thanks to bonus or profit-sharing mechanisms adapted to the size of each company.  

What do the social partners think?  

Geoffroy Roux de Bézieux, the president of the MEDEF has intervened on several occasions in the media to warn against the risk of "destabilising the economy" that these demands for wage increases entail: "an increase in wages also means an increase in prices.

Laurent Berger (CFDT) called for an immediate 15% increase for the medico-social professions and urged certain professional branches to enter into negotiations. France's largest trade union organisation also proposed making public investment conditional on the introduction of mechanisms for better sharing of the benefits generated within the company.  

The opinion of the Impact France Movement

For the Impact France Movement, the conclusion is clear: companies have a key role to play in guaranteeing the purchasing power of their employees .

Thus, the Impact France Movement claims :  

  • A 50% limit on the share of profits paid out to shareholders in the form of dividends
  • The limitation of remuneration gaps (maximum of 1 to 20 SMIC for SMEs, maximum of 1 to 50 SMIC for ETIs and maximum of 1 to 100 SMIC for large companies, in accordance with the recommendations of theImpact Score on value sharing with detailed target objectives by company size)
  • That public aid and investment be conditional on companies meeting these minimum commitments

Thus, like impact companies, accelerating companies' commitments to better distribute the value generated is a concrete lever for improving workers' purchasing power.

Read on

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