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Preserve purchasing power with the sliding salary scale

As inflation stands at around 6% at the start of the 4th quarter of 2022, the question of maintaining purchasing power is becoming crucial. Basic necessities, essential for everyday life, are constantly increasing. Salaries do not follow.

Editor’s Note: This article comes to us from the CGT Union in France.

The indexation of the SMIC is not enough

Inflation – the erosion of the value of money – primarily affects employees and the most vulnerable social strata. In times of high inflation, the market value of the euro decreases: each euro makes it possible to buy fewer and fewer goods and services.

This year, the SMIC has been increased 3 times, but these increases are independent of any government and employer will, because the SMIC is legally indexed to inflation. the same does not apply to other salaries.

And this situation has surprising consequences; out of 166 professional branches, only 37 have a starting grid above the minimum wage . For all the others, the minimum income can only be achieved thanks to bonuses, in particular those linked to working conditions. 

“Inflation requires relaunching the debate on the urgency of raising wages to neutralize this mechanical reduction in the purchasing power of wages” insists Boris Plazzi, CGT Confederal Secretary. 

Implementation of the sliding salary scale

To maintain purchasing power, the sliding scale of salaries must be put in place, ie the automatic indexation of all salaries to the increase in the cost of living. 

The argument of the wage increase/inflation loop, dear to liberal economists, must be forgotten. 

In a period of high inflation, the financial situation of CAC 40 companies, in 2021 and 2022, and the dividends paid to shareholders border on indecency, compared to the slow erosion of the purchasing power of employees.

For 40 years (date of the abolition of the sliding wage scale): the decline in the share of wages in the wealth produced has been estimated at 1,500 billion euros! 

The government must not rely solely on the goodwill of companies!

To preserve the purchasing power of all employees, the CGT is mobilizing to: 

  • the establishment of the sliding scale of salaries, with the promulgation of a new law and the modification of the labor code. 
  • the revaluation of the SMIC to 2000 euros gross,
  • without forgetting the increase in the index point for civil servants, which must be revalued automatically each year, in the same proportions as the minimum wage.
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