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For a gross salary etc

You're right to look at the gross, not the net as Agnes did. But the numbers you give concern salaries above a certain level (about 130% of minimum wage). Beneath that level, employers get "relief" on social contributions, so they are less than 40%. On the minimum wage itself, I don't know the figure offhand, but the payroll contributions are not that high.

These cuts on low-salary payroll contributions were brought in gradually over the years to encourage hiring of unskilled workers. In the end, they produce a "perverse" or unintended effect of encouraging employers to keep as many employees as possible down in that low-contribution zone. (A "low-wages trap"). This is the main reason (imho) why the percentage of minimum-salary earners is high, as Munchau points out.

BTW, I think the median salary in France is about 130% of minimum salary, so we'd be talking about half the employee population in this lower-payroll contribution bracket.

The other thing I'd like to point out about what Agnes says is that the social contributions are deferred salary (health, pensions, unemployment insurance, etc). The true wages that correspond to the post you hold = the mass of your gross pay + employer contributions.

Personally, I think it would help the employment situation to bring employer contributions down, but paying for solidarity would have to be shifted elsewhere, on to income tax or a parallel tax most likely. Also the question would necessarily come up: who gets the money from the cut: the employer alone, the employee alone, or a share-out between the employer and the employee's salary?

by afew (afew(a in a circle)eurotrib_dot_com) on Mon Mar 27th, 2006 at 09:02:53 AM EST
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