Two systems that come out from two different histories and cultures 3
A) Wage regulation from 1949 to 1990 in France and in Germany 3
B) Main features of the current systems in France and in Germany which have been inherited from their historical context 6
Two systems that are today simultaneously questioned 7
A) Why does France want tobe inspired by the German’ system? 7
B) Why does Germany want to be inspired by the French system? 13
Would a standard minimum wage in Europe be a solution? 16
A) Difficulty principally stems from the fact that history culture social and economic policy choices are all different in Europe 16
B) Possibilities and suggestions for social progress as requested by Europeans on theminim wage 17
The minimum wage finds itself at the centre of numerous discussions in Europe as its future will determine whether or not Europe will head toward a welfare union or rather toward a union barely protecting workers. One of Lisbon treaty’s primary ambitions was to make the minimum salary for the social sphere a symbol as the Euro becamea symbol for the monetary sphere. To realize this objective, the minimum salary must evoke a certain conception of human dignity. The principle behind is that any employee should live at a decent level far from the poverty level and not only the conception that the minimum wage is the lowest wage at which workers can sell their labour. However today, other goals have to be taken into considerationto fulfil minimum wage ambitions. Now, the minimum salary is gradually being seen as a way to reduce inequalities and social inefficiencies in advanced societies between skilled and poorly qualified labour. It may also incite firms to make productivity gains by investing in new technologies instead of hiring employees filling poorly gratifying positions with sub minimum wages. Finally in economicterm, the introduction of a minimum salary now became justified by unfair economic competition between countries in Europe between countries with or without social advances on minimum wage. Fighting what is called social dumping is set as a priority in Europe. Although those goals are easy to understand, whether the minimum salary succeeds in attaining its goals is still uncertain. Over the yearsthe minimum wage has been a popular topic for the public and as such it has become of electoral importance for politics as well as a vigorous and still hotly disputed one for economists all over the world. The neoclassical economists argued that raising wages over the deduced equilibrium by the law of supply and demand would make employers hire less low-skilled employees. In response, othereconomists who support minimum wage would argue that it is a way to increase the purchasing power of low-skilled labours that could eventually push goods demand upward, which would increase investments and economic activities and thus reduce unemployment.
Germany and France have over the time adopted two different approaches over the minimum salary due to historical contexts and culturaldifferences.
In France, low-skilled labour beneficiate from a nationwide SMIC (French minimum wage) whereas in Germany, agreements in different sectors, landers, etc. would constitute the legal framework for a minimum wage (a statutory minimum wage doesn’t exist).
We cannot directly assess the overall efficiency of those two systems because those countries are suffering from the same inefficiencies: weakgrowth, high unemployment level, increasing public deficit and low-productivity growth. However, we can see how they can inspire and learn from each other.
In this contribution, we will analyze what would be the best thing to do in France and Germany regarding their wage regulations. First, we will study what has lead France and Germany to adopt and confront social inequalities as of today....