Friday, December 12, 2025 The SMIC Professional Crew publishes a file at the affect of the minimal salary at the French economic system. Then again, its affect on poverty isn’t unequivocal. The minimal salary isn’t sufficient to give an explanation for increasingly more numerous private trajectories. Disposable revenue, which takes under consideration help won and restricted bills, is a fairer criterion.
And this 12 months, the Minimal Salary Professional Crew’s file launched on Friday, December 12 raises the query: does the minimal salary nonetheless in reality give protection to towards poverty? Then again, as INSEE and the Institute for Public Coverage (IPP) have identified in different more moderen papers, gross wages on my own don’t resolve poverty. What’s vital is the usual of residing, i.e. disposable revenue after social transfers of a wide variety (which can be added up), taxes and obligatory tasks (which can be subtracted). Within the context of emerging housing costs (13% build up within the reference hire index, IRL) and the expanding heterogeneity of circle of relatives scenarios, the query will have to not be requested in a purely macroeconomic sense.
Instructional literature echoes this statement. Antoni B. Atkinson emphasizes that poverty is not only about “lack of wages” however about inadequate get right of entry to to international sources; Patrick Moyes reminds us that the construction of the circle of relatives profoundly adjustments the relative lifestyle. As for France Strategie and INSEE, after the newsletter of the file on poverty in France, they record the rise of what we name operating poverty, this is, the truth that paintings is finished with out exceeding the poverty thresholds and with out the opportunity of making the most of social growth.
Inflation dampener?
Our first chart compares the evolution of the minimal salary, wages and costs since 2013. We see very obviously that the minimal salary has served as a surprise absorber right through the new inflationary collection: its computerized revaluations have made it advance as speedy, ceaselessly sooner, than the CPI.
Determine 1 – Evolution of the minimal salary, the elemental per thirty days salary (SMB), the elemental hourly salary of staff and workers (SHBOE) and the shopper worth index (CPI) with out tobacco – Assets: Dares, Insee, Record GES 2025 – Creator’s chart.
This pattern contrasts with the rage of reasonable wages, which stepped forward extra slowly. As highlighted in different analyzes by way of France Strategie and the Group for Financial Co-operation and Building (OECD), this has had the impact of tightening the salary hierarchy, a state of affairs already documented right through earlier minimal salary catch-up classes.
The affect of operating hours
However this statement says not anything a few measurement this is however decisive: get right of entry to to full-time paintings as a result of one of the minimum-wage staff aren’t there full-time. As a number of research by way of INSEE and the Directorate for Animation of Analysis, Research and Statistics (Dares, Ministry of Labour) have proven, an important share of minimal salary staff paintings part-time, ceaselessly now not by way of selection, however as a result of full-time paintings isn’t to be had. That is what economists name compelled part-time paintings.
This part-time paintings radically modifies the translation of the minimal salary: we’re speaking concerning the minimal hourly salary, however, in particular, the per thirty days way don’t mirror this price. A minimal salary paid for 80% of full-time or intermittent hours routinely results in decrease earning and subsequently greater publicity to poverty.
But when we persist with this comparability, shall we conclude that the minimal salary absolutely protects the lowest-income workers. Then again, that is the place the problem turns into extra complicated. As a result of poverty does now not rely simplest at the wage: it will depend on the disposable revenue, and subsequently on all of the family sources. This displays analysis on operating poverty, a rising phenomenon in France in step with the Observatory of Inequality, about one in 3 folks in poverty is hired, however circle of relatives obligations, housing prices or the absence of different revenue stay the family under the poverty line.
From minimal salary to disposable revenue
In an effort to perceive the actual capability of the minimal salary to offer protection to towards poverty, we wish to take a look at what it turns into as soon as it’s remodeled into disposable revenue because of the knowledge from INSEE and DARES, i.e. into revenue after taxes, advantages and non-conquerable advantages.
The next chart contrasts 3 circle of relatives scenarios: a unmarried particular person, a unmarried dad or mum with a kid, and a pair with a kid the place each adults obtain the minimal salary.
Determine 2 – Disposable revenue and poverty thresholds in step with 3 profiles of families incomes the minimal salary Assets: Dares, Insee, GES 2025 Record – Creator’s graph.
Within the first panel, we be aware {that a} unmarried minimal salary earner has disposable revenue above the poverty line at 60% of median revenue. The task bonus performs a very powerful position, however above all it’s the absence of circle of relatives responsibilities and prime mounted prices that provide an explanation for this consequence.
This profile corresponds to the vintage illustration of the minimal salary as a person protection internet. As INSEE knowledge and the paintings of France Strategie verify, operating poverty continues to be quite restricted. Then again, even on their very own, a minimal salary employee may have extraordinarily prime marginal prices in spaces with prime condominium call for.
Operating poverty
The second one panel tells a fully other tale. A unmarried dad or mum, even with a full-time minimal salary process, is obviously under the poverty line; extra critically, their disposable revenue not compensates their internet wage thru transfers. That is the place the concept that of operating poverty takes on its complete that means. In spite of employment and regardless of revenue dietary supplements, the family stays in a state of affairs of structural fragility.
In keeping with INSEE, single-parent households are lately the crowd maximum uncovered to poverty, and particularly to subject matter and social deprivation, now not as a result of they paintings much less, however as a result of they’ve a unmarried revenue, upper bills and not more talent to evolve.
Within the 3rd panel, a pair with a kid and two minimal salary earners additionally lives under the poverty line. This consequence means that circle of relatives composition, even with two minimal wages, creates structural poverty on low earning; so the graph displays that the margin finally is slightly restricted. A part of the income disappear because of cuts in assist and the access of taxes, a phenomenon smartly documented by way of the IPP and the Bozio-Wasmer file of their paintings on “implicit marginal rates”. In spaces with prime rents, a intake surprise or value build up can push those families right into a a lot more precarious state of affairs.
ICI France 3 Hauts-de-France, 2024 Contrasting scenarios
One conclusion is apparent: the minimal salary nonetheless protects some workers from poverty, however this result’s some distance from uniform. It protects a full-time employee with out youngsters, however is not enough to verify a tight lifestyle when the wage on my own has to hide family bills, particularly in single-parent scenarios. This asymmetry is on the middle of the rise in operating poverty noticed by way of INSEE and documented by way of the Institute for Public Insurance policies.
Those effects remind us that poverty is not only a phenomenon of exclusion from the exertions marketplace. It impacts built-in, professional staff with strong contracts, however whose minimal salary, implemented to an inadequate quantity consistent with hour or absorbed by way of restricted prices, not lets in a lifestyle above the poverty line. Then it seems that the minimal salary is extra the decrease threshold of person wages than an device of circle of relatives social ensure.
At a time when the query of buying energy takes middle level and when the revaluation of the minimal salary stays one of the crucial primary adjustment equipment, those conclusions invite us to reorient the controversy. No longer simplest the extent of the minimal salary will have to be puzzled, but in addition its capability to constitute a reference revenue for extraordinarily heterogeneous circle of relatives and territorial configurations. In different phrases, the minimal salary nonetheless performs its position as a person stabilizer, however it’s not enough to offer protection to positive families ultimately.
Then the smaller query arises, “By how much should the minimum wage be increased?” » sure “How can we guarantee that the disposable income from a minimum wage job actually makes it possible to avoid poverty?”.
