a report recommends removing exemptions from employer contributions on high salaries | EUROtoday

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The socialist deputy for Essonne Jérome Guedj, during the Amfis of La France insoumise, in Châteauneuf-sur-Isère (Drôme), August 26, 2023.

Exemptions from employer contributions are as soon as once more within the crosshairs. In a report made public on Tuesday September 19, the Renaissance deputy for French folks overseas Marc Ferracci and the socialist deputy for Essonne Jérôme Guedj advocate removing these reductions once they apply to high salaries. The thought is just not new however the truth that it’s supported by two parliamentarians from opposing political households provides it visibility and suggests the emergence of the beginnings of a consensus “transpartisan”a few days earlier than the presentation of the Social Security financing invoice (PLFSS) for 2024.

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For round thirty years, successive governments – from the proper to the left – have diminished the contributions that firms pay to “Secu”, the target of this coverage being to cut back the price of labor in an effort to fight unemployment amongst mass – significantly among the many least expert staff. Various measures have been taken over time, first by lowering contributions for remuneration at or simply above the minimal wage. Then the goal step by step widened, till it included pay slips reaching 3.5 occasions the minimal wage.

Taken collectively, these selections find yourself costing “crazy money”, as Mr. Guedj underlines, sarcastically utilizing a phrase from Emmanuel Macron, in his foreword to the report. In 2022, these exemptions represented 73.6 billion euros, on the degree of the final “Secu” system (and round 80 billion, if we think about the social safety organizations, exterior the final system, that are additionally affected by these mechanisms). The quantities concerned have seen their weight improve, going from 1.1 factors of GDP in 2004 to 2.8 factors in 2022. As a normal rule, the shortfall for “Secu” is compensated by the State.

Bruno Le Maire unfavorable

The drawback is that these provisions seem like ineffective in some circumstances. Thus, the discount in household contributions for salaries between 2.5 and three.5 minimal wage produces results “almost zero” on employment and “difficult to detect on competitiveness” firms, write the 2 parliamentarians, citing a number of research – together with a observe from the Economic Analysis Council printed in 2019 and work carried out by famend specialists (economists Pierre Cahuc, Yannick L’Horty, Philippe Martin, and so forth.). This is why MM. Ferracci and Guedj suggest removing this exemption, when it applies to remuneration above 2.5 minimal wage, whereas pleading for a “support for sectors that would be most strongly affected” by the disappearance of this support.

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