SMIC 2022. Jean-Luc Mélenchon promises an increase in the minimum wage to 1,500 euros in the event of his appointment as Prime Minister. Is it doable? At what price ? What impact on the job market? All of the information.
[Updated May 19, 2022 at 8:11 a.m.] A short distance from the first round of the legislative elections (scheduled for June 12 and 19), Jean-Luc Mélenchon is not giving up and is continuing his efforts. With the aim of winning the post of Prime Minister from the newly elected Elisabeth Borne, the boss of Nupes has made himself the spokesperson for a strong demand: the revaluation of the Smic to the tune of 1,500 euros net! Plus 1,400 euros as the latter had promised during the presidential campaign with the Insoumis. A way to put pressure on the government in place. As a reminder, the amount of minimum wage has just increased for the second time in 2022! Indeed, after a first increase observed on January 1, 2022 (0.9%), it climbed by 2.65% on May 1. That is an increase of 5.9% over the year. The monthly net amount goes from 1,269 euros to 1,302 euros. The gross monthly salary goes from 1,603 euros to 1,645 euros. Regarding the hourly gross, it climbs from 10.57 euros to 10.85 euros. As a reminder, such an increase is automatic when the level of inflation exceeds 2%, it is currently 4.8% in April over twelve rolling months.
But then, what could be the advantages and disadvantages of such an increase in the minimum growth wage if it were to come into force? This type of increase could create certain social tensions between employees paid the Smic and the middle class by allowing the "smicards" to benefit from higher remuneration. Companies should match this amount, but in these times of runaway inflation and zero growth, it should not be expected. In addition, this could aggravate the inflationary circle by forcing companies to increase the amount of their products on sale to compensate for this rise in the minimum wage. One more blow for the French, at a time when inflation is about to cross the 5% threshold (INSEE forecasts around 5.4% inflation in May over one year). Conversely, such an increase could also inject new momentum and relaunch growth through consumption.
After experiencing a 0.9% increase at the start of 2022, the minimum wage is now increased to 1,645.58 euros gross per month, compared to 1,589.47 euros gross monthly last year. In 2021, the Smic had already experienced a fairly unprecedented revaluation of 2.2% to compensate for the price increase of more than 2% between November 2020 and August 2021. It was the first time since 2011 that an automatic increase took place outside the 1st january. As a reminder, if an employer were to pay one of his employees below the legal amount of the Smic, the latter is liable to a fine of 1,500 euros. He may also be ordered to pay damages to the employee.
The minimum wage is therefore experiencing a second increase on May 1, 2022. Indeed, to take account of the rise in inflation (4.5% in March over one year), the minimum growth wage is increased by 2.65%, i.e. a net increase of 34 euros per month. In other words, the net minimum wage goes from 1,269 euros to 1,302.64 euros net, an increase recorded on Sunday 1 May.
Each year, the amount of the minimum wage is reassessed. On January 1, 2022, it reached 1,603 euros gross per month on the basis of 35 hours per week. This increase is the result of both the evolution of inflation and the increase in the wages of workers and employees. On May 1, 2022, a new increase following inflation came into effect, bringing the gross minimum wage to 1645.58 euros. As an indication, here is the evolution of the amount of the minimum wage since 2010:
The amount of the monthly net minimum wage reached 1,302.64 euros, compared to 1,269 euros on January 1 and 1,231 euros in 2021. As a reminder, here is the evolution of the amount of the net minimum wage, in recent years, amounted to:
The amount of the hourly minimum wage (gross) amounts to 10.85 euros, compared to 10.57 euros on January 1, 2022 and 10.25 euros previously. As a reminder, the amount of the hourly Smic, in recent years, amounted to:
The amount of the hourly Smic is extremely variable. Keep in mind that the amount may vary from one payslip to another, due to the amount of social security contributions deducted from the gross hourly minimum wage. In January 2022, the amount of the net hourly minimum wage was around 8.37 euros. For example, it was weaker between January and September 2021, measured at 8.11 euros.
The minimum growth wage corresponds to the legal minimum hourly wage that the employee must receive. Deductions are however applicable, in certain cases (apprentices and employees under the age of 18). The hourly rate has been 10.85 euros since May 2022, this is the amount paid for one hour of work. Unlike the monthly Smic, which is modeled on the basis of 35 hours per week.
The Smic in France is 10.85 euros gross per hour for a working time of 35 hours. Not all member states of the European Union have one, but for those that have it, the differences are quite significant. According to Eurostat data, the lowest Smic in Europe is the Smic in Bulgaria (332 euros per month). The highest minimum wage in Europe is in Luxembourg (2,257 euros).
For some member countries such as Austria, Cyprus, Denmark, Finland, Italy and Sweden, a minimum wage per branch applies. The minimum wage can also, for these countries, be determined by negotiations between the social partners.
The case of Switzerland is a bit special because only 5 cantons have a minimum wage. Geneva, Neuchâtel, Jura, Ticino and Basel-City. It is not the same between the different cantons.
Beyond that of the cantons, there is no minimum wage in Switzerland at the country level for several reasons. The first is that Switzerland is a federal state, and each canton remains sovereign. Keep in mind that the Swiss Smic remains, on average, 60% higher than the Smic in France.
Since January 1, 2018, in Germany, a legal minimum amount of wages exists. A Smic redefined every two years, from now on, and reaches 9.82 euros per hour since January 1, 2022. A next revaluation should take place on July 1, 2022 and should bring the German Smic up to 10.45 euros gross Of time.
In France, the Smic was revalued on January 1, 2022 to take into account the evolution of prices between August and November 2021. Employees were entitled to a minimal increase of 0.9% at the start of the year. The monthly net minimum wage therefore rose from 1,231 euros in 2021 to 1,269.45 euros in 2022. The monthly gross minimum wage increased from 1,554.58 euros to 1,603 euros on 1 January 2022.
It was then revalued a second time by 2.65% on May 1, 2022. Enough to bring it to 1,302 euros net monthly.
The Smic is revalued each year on January 1st. It is indexed to inflation measured for the 20% of households with the lowest incomes. The revaluation of the Smic is carried out on the basis of half of the gain in purchasing power of the average hourly wage of workers and employees. An increase is also carried out as soon as the level of inflation exceeds 2%.
Employees who carry out a professional activity in the hotel and catering sector have a different minimum wage from the legal minimum wage, called the hotel minimum wage. At first glance, the hotel minimum wage seems more advantageous than the legal minimum wage, but it is worth taking a closer look. Indeed, the hotel Smic is calculated on 39 hours per week, and not on 35 hours. Another significant difference, when an employee is paid the hotel minimum wage, he automatically benefits from a 10% increase in overtime worked between the 36th and 39th hour. This is why the net monthly hotel minimum wage is 1,430 euros. Beyond the remuneration of the classic minimum wage (1,269.45 euros) due to the increase in overtime. The gross monthly hotel minimum wage amounts to 1,804.65 euros.
The applicable collective agreement generally provides for a conventional minimum wage. If the agreed minimum is lower than the Smic, the employer pays a salary supplement to reach the amount of the Smic. If the conventional minimum is higher than the Smic, the employer pays what is provided for by the collective agreement.