The minimum wage: an overview (3)

In the United States: an Obama effect ?

The election of Barack Obama should mark a new impetus for the federal minimum wage. Obama undertook to bring it to 9.5 dollars in 2011, an increase of 45% compared to the current value in nominal !

In addition, like France, the federal minimum wage should become indexed to prices (see the Barack Obama program). However, for the moment, the Minimum wage remains indexed to the sum of an index of the prices of consumer goods not incumbent health and half of the progression of the working purchasing power. The Democrat system therefore seems less generous. However, the workers’ purchasing power in the United States, which has experienced a negative trend for several decades, including it in the calculation would have been without effect. On the other hand, the price index that would be selected would include all of the goods and services whose health. The fact remains that the 45% increase should simply bring back the federal minimum wage until its level of the late 1970s. Only the massive decline in real terms of the federal minimum wage orchestrated during the Reagan and Bush father mandates will be erased.

US federal minimum wage in dollars from October 2008, from January 1978 to July 2011 (inflation hypothesis at 3% annual from 2009 to 2011)

Source: Calculations from data from the Bureau of Labor Statistics. Consumer price index any product. From October 2008, inflation hypothesis smoothed at 3% per year and respect for the commitments of the Obama candidate.

Note: the coverage of the federal minimum wage has been generally constant since January 1978. Previously, several minimum wages coexisted: for example in 1976, $ 2.30 in the big business, $ 2.20 in the hotel catering, $ 2 in agriculture. Before 1961, it only applied to companies engaged in inter-state production or trade activities.

But, in total, as the American federal minimum wage was much higher than the French minimum wage thirty years ago, the federal minimum expected for 2011 should be close to Minimum wage : by taking the Eurostat data for the purchasing power of minimum wages and assuming the absence of a boost from the current French government, and an annual inflation of 3% in the United States, a French smicard at 35 hours would gain gross current 1,320 euros per month in July 2011 and an American worker at the minimum wage at 35 hours would affect 1,240 gross euros. In the (unlikely) hypothesis of a price stagnation across the Atlantic due to the crisis, the American gross minimum wage could exceed the Minimum wage in 2011.

France: the retaining retaining

The example given by Barack Obama is perhaps the source of the political orientation text that the Socialist Party adopted during his congress in November 2008: “ Our objective is to manage to structurally guarantee the distribution of wealth. Starting with an active policy of Minimum wage with regular and significant increases, looking for new indexing mechanisms ». However, we note the lack of precise commitment or even a certain ambiguity in the socialist text. The influence of the recent report of the economic analysis council on the minimum wage may not be unrelated to this reluctance. Written by Pierre Cahuc, Gilbert this and André Zylberberg, Minimum wage and low income: how to reconcile social justice and economic efficiency Finally has just been published in French documentation. It was already available since the start of the school year in an electronic version. This useful work makes it possible to soak up majority visions among French economists and certain ideological foundations of the current majority.

Austria

Following an agreement between employers and the 2007 employee unions, Austria will join the club of countries with a form of minimum interprofessional wage on 1^er January 2009: The minimum branches set by collective agreement cannot be less than 1,000 euros gross for full time … over fourteen months. Almost all Austrians (98%) are covered by minimum branch wages.

Brussels via Germany: a fierce debate

Relatively peaceful in Austria, the debate on the minimum wage is however hard with its neighbor, Germany. On the one hand the proponents of Minimum wage Underline the strong push of low wages in Germany and the collapse of collective coverage (65% of Western employees, 54% of the East in 2006 against 76% of employees in the West and 63% of the East in 1998) as well as the weakness of many minima for covered employees.

Examples of minimum branches in Germany in gross euros (April 2008)

	West	East

Fast food

7.05

6.14

Private transport

6.61

3.91

Retail

6.56

6.78

Meat industry

6.31

4.50

Restaurant hotels

6.12

4.81

Security services

5.25

4.32

Hairstyle

4.69

3.05

Source: Wirtschafts-Und Sozialwissenschaftliches Institute

On the other, the “ anti “Agree the French scarecrow: proof of the risks presented by a minimum wage, the considerable proportion of smicards in France, synonymous with a distribution of completely distorted wages. So we find exactly the argument that I denounced in the previous articles. Again, it should be remembered that the figures of French smicards would be much lower if we retained the methodology used in most other European countries. If it was impossible to mobilize French colleagues on this subject (probably because this observation has been presented for several years as a truth), German economists eager for a national debate on solid bases have harassed Eurostat. Result: in the last version of its statistics, Eurostat removes these figures.

The statistical manager told the Germans (in French in the text): “ You will no longer find it, any more than in data on our site, information on the “proportion of full -time employed people receiving the minimum wage (%)”. Indeed, it turns out that the data transmitted to us by the Member States are very little comparable to each other and, given the political importance of this data, we must first take stock with the Member States and try to progress towards more comparability before possibly republishing this indicator. The problem is above all what “receiving the minimum wage” means. For France, it is the “basic” salary excluding bonus, bonus, etc., so how many people are paid “on the basis of the minimum wage” even if they then receive supplements of remuneration. For other countries, it is in fact the total remuneration, in other words how many people affect “only” the minimum wage (no premiums or other more). The first concept gives for some countries a percentage of around 10%, the second of the order often of 1, 2 or 3%, so that has nothing to do ».

Debates on the minimum wage are more than ever open, at least outside the hexagonal borders.