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N° 100 (juillet 2020)

English Abstracts

Special Issue: From a minimum wage to a living wage: A renewed debate

Minimum wage and jobs: The history of a debate

Too high a minimum wage leads to the destruction of jobs. This article offers a brief history of this age-old statement, and it makes two observations. The first concerns the perpetual conflict between those invoking certain incontrovertible rules of economics and those making plans to improve the lot of employees.
This tension has been around since the implementation of the first schemes at the start of the twentieth century, and a similar debate developed in the United States, particularly after the Second World War. The second observation is that this debate has taken a very technical turn in light of developments in economics and an increasing reliance on econometrics. However, the latest empirical studies lead to a steady reconsideration of the principle that raising the minimum wage automatically causes jobs to be lost.
Keywords: minimum wage, jobs, economics, debate.

The European minimum wage on the doorstep
Torsten MÜLLER and Thorsten SCHULTEN

On January 14, 2020, the European Commission started its initiative to establish fair minimum wages in Europe. Based on a discussion of the living wage concept, this article analyzes how recent national initiatives for substantial minimum wage increases in various EU Member States and the Commission’s initiative to develop a European minimum wage policy could mutually reinforce each other and eventually lead to fair minimum wages in Europe that enable workers to enjoy a decent living standard. In view of the significant differences in the minimum wage regimes and welfare state traditions, this article argues for a pragmatic approach of taking the “in-work-poverty-wage” threshold of 60% of the national full-time gross median wage as the reference for the assessment of the adequacy of minimum wages in Europe.
Keywords: minimum wage, living wage, trade unions, campaign, European minimum wage policy, European Commission.

From the National Minimum Wage to the National Living Wage in the United Kingdom

In 2015, the Conservative government established a national living wage with the aim of bringing it up to 60% of the median wage in 2020. In 2019, a new Conservative government increased this ratio to two thirds of the median wage by 2024. How can these decisions be explained given that the Conservative party opposed the New Labour government’s creation of a minimum wage at a much lower level in 1998?
The long-term objective is to break the “low pay, low skill, low productivity” vicious circle in which the UK has become trapped. The immediate objective is to make savings on social welfare spending by transferring the responsibility to make work pay back to businesses.
While it may be too soon to measure the medium-term effects, an early indication has emerged: the steep increase in minimum wage has not resulted in a negative impact on jobs, but it has had little effect on rates of poverty.
Keywords: United Kingdom, minimum wage, living wage, jobs, social welfare.

The minimum wage law in Germany: a generally positive outlook, but some major issues of application
Odile CHAGNY and Sabine LE BAYON
The interprofessional legal minimum wage was not introduced in Germany until 2015. It marked a major step in recognizing the inability of the system of collective bargaining to continue to guarantee, on its own, decent working conditions for many employees. The outlook is broadly positive: the minimum wage has helped to limit wage inequality, temporarily at least; it has benefited many employees; and price rises of certain goods and services turned out to be innocuous, against a general backdrop of moderate inflation. The issue of circumvention of the law is, however, far from resolved. While the minimum wage has not in any event had a significant negative impact on jobs, it has failed to help a great many workers to get out of poverty, due to too few hours worked.
Keywords: Germany, minimum wage, working hours, poverty.

The minimum wage in France: history and debates
This article traces the history of the minimum wage in France, beginning with its creation in 1950. The first part addresses the statutory and regulatory changes that have accompanied this history, identifying three broad periods (1950-1967, 1968-1981, and 1982 onwards). The second part highlights the dead-end policy of social contributions exemptions on “low wages” in relation to the minimum wage. In particular, it highlights the blind spots in the analyses produced by the group of SMIC (minimum wage) experts established in 2009. The third part addresses the main debates surrounding the minimum wage, considering first the employer’s point of view and then that of the employee. The conclusion offers an estimate of a decent minimum wage (living wage) based on the reference budgets published by the National Observatory for Poverty and Social Exclusion (ONPES).
Keywords: France, minimum wage, living wage, reference budgets, social welfare.

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