Social Security Budget: Commission Declines Against Key Article on Employer Contributions

The deputies of the Social Affairs Committee, in particular those of the Macronist, LR and RN groups, spoke out on Tuesday 22 October against a flagship measure of the government's Social Security budget, overhauling employer exemptions, in particular to generate at least four billion euros in savings.

This vote will have to be repeated in the chamber, where the deputies will start again from the government's initial text.

The article plans to limit and distribute differently the reductions in employer contributions, currently heavily concentrated at the minimum wage level, in the hope of obtaining revenue and encouraging wage increases. Hostile deputies warn of an increase in the cost of labor and a "threat" to employment.

The measure is one of the most irritating in the budgetary sequence between the government of Michel Barnier and its fragile coalition in the National Assembly, in particular the Macronists who see it as a step backwards in their employment policy.

This new cocktail of contribution reductions planned by the government would also stop at three times the minimum wage, compared to 3,5 times the minimum wage today.

The reform, which would bring in at least four billion euros, or even "five billion" according to MPs from several groups, has angered employers who say it "will destroy several hundred thousand jobs".

This government article "will result in freezing salaries, reinforcing the minimum wage, and breaking the dynamic of job creation", criticised Sylvie Bonnet, LR MP, who is nevertheless a member of the coalition supporting Prime Minister Michel Barnier.

Like Macronist MP Jean-René Cazeneuve, for whom the measure "would inevitably lead to an increase in the cost of labor" and would send a "very bad signal to businesses." While his parliamentary group had also planned less severe amendments aimed at modifying the distribution of contributions, he chose, like LR and RN, to simply reject the article.

"For some companies, salaries and charges represent up to 60% of their turnover," argued RN MP Katiana Levavasseur.

To the great displeasure of the left, which voted against the deletion amendments: "we are in a rather surprising situation, it is the new Popular Front which is going to come to the support of the government", quipped Hendrik Davi (Ecologist and Social), judging that "this exemption policy has had no effect on competitiveness".

"We can create more and better quality jobs with these funds," added the rebellious Hadrien Clouet.