Inflation: the "employee dividend" promised by Macron, a good idea?

We are at the beginning of March 2022 and Emmanuel Macron finally unveils its program for the presidential election. France is almost out of winter and of yet another wave of Covid. The air could finally seem more breathable, if there was not another anxiety contaminating the spirits… Since the summer, prices have been racing, and inflation seems to be encrusted in the landscape . A new fuel is feeding it: Russia invaded Ukraine a few days earlier and the prices of energy and raw materials are panicking again.

With each visit to the pump, the figure on the receipt grows and the French begin to worry about their purchasing power, despite the price shield put in place since the beginning of the autumn by the government to reduce the electricity and gas bills. At the same time, the annual results ball for CAC40 companies has just begun. Many are reaching historic highs, fueling a resentment that has never ceased to exist between France and profits. However, unlike the other candidates, the outgoing president did not emphasize purchasing power, and it is necessary to look in his program for the few measures responding to this concern of employees. Among them, an expression has appeared: the “employee dividend”.

An “employee dividend” dropped out of the purchasing power law adopted this summer… But which made a comeback in the fall. While the Minister of Labor Olivier Dussopt is preparing to give the starting signal for negotiations between employers’ organizations and unions on the sharing of added value, the Head of State is putting his proposal back on the table, declaring during an interview on France 2: “When you suddenly have an increase in dividends for your shareholders, then the company must have a mechanism that is identical for employees”.

All the way to battle in Macronie. Bruno Le Maire, the Minister of the Economy, and Olivia Grégoire, Minister Delegate in charge of SMEs, go to the front to defend the device. “We can no longer avoid the debate on the sharing of value,” said the minister in an interview with the Express in early November. A convention devoted to this subject is announced for the beginning of next year, and Pascal Canfin, deputy secretary general of Renaissance and MEP, is responsible for leading the reflection within the framework of the presidential party. For a while, the idea of ​​an “employee dividend amendment” added to the finance bill even emerged… Before being buried by government spokesman Olivier Véran, referring the subject to a bill ulterior.

A return to the agenda far from being insignificant… Although the exact form that the system could take is still unclear, its principle is clear – to allow a better sharing of company profits towards employees – and seems to be a magic recipe to address a number of concerns. First of all, the wage demands which continue to rise and which promise stormy moments in companies as the NAO (mandatory annual negotiations) approach. Because for the moment, the account is not there. Despite the increases granted by many boxes, real wages in the private sector fell by 2% in the third quarter according to DARES… And the government categorically refuses to hear of wage indexation on inflation, as some unions demand it.

“It is indeed a bad solution, because it anchors inflation expectations and therefore risks perpetuating the dynamic of rising prices”, estimates Philippe Martin, dean of the School of Public Affairs at Sciences. Po. “And a general increase in wages would destroy jobs: on the contrary, a reversible mechanism makes it possible to meet the demand for wage increases while taking into account the situation of each company and the uncertainty in which they are immersed today ‘today,” says Marc Ferracci, Renaissance MP and labor market specialist. The idea of ​​an employee dividend would also make it possible to definitively bury the idea of ​​a tax on excess profits which emerged following the exceptional results of oil tankers and shipping companies and has been stirring up debate for months… and which does not leap for joy the executive, attached to its promise not to increase taxes.

In addition to these short-term benefits, the idea of ​​better “value sharing” has long been an item dear to macronism: in 2019, the PACTE law relaxed the conditions for setting up participation and profit-sharing, and the “purchasing power” bonus introduced in 2018 was renamed this summer “value sharing bonus”. “For those who regret the very Latin conflictuality of our labor market and envy the more cooperative functioning of the Nordic countries or Germany, the establishment of a more systematic participation of employees in the profits is a way of pacifying relations” , analyzes Eric Dor, director of economic studies at the IESEG School of Management.

“A system for sharing value such as participation makes it possible to create a common interest between employees and shareholders: the success of the company”, adds Gilbert Cette, professor of economics at Neoma Business School, and specialist in the labor market. work. And even if the mechanisms for “sharing value” beyond salaries are numerous today, they do not prevent the “holes” in the racket: profit-sharing and the Macron bonus are optional, while participation is only mandatory in companies with more than 50 employees… Thus leaving out many employees of SMEs or VSEs. Today, only one out of two employees has access to a profit-sharing scheme. “In addition, the calculation formula is today incomprehensible for employees and for many business leaders: it should be simplified”, sighs Thibault Lanxade, boss of Luminess, former vice-president of Medef and theorist of the “dividend employee”. “It is also obsolete, based on macroeconomic foundations that no longer have to be”, explained Olivia Grégoire in her interview with Express.

If the idea seems at first glance clever to check off all of these objectives, it remains far from sufficient. “Proposing an “employee dividend” as compensation for the lack of wage increases is a way of circumventing our social model which is built on them: they allow employees to contribute, for retirement for example, and to the State to finance itself”, underlines Eric Heyer, director of the analysis and forecasting department of the OFCE. Moreover, the “employee dividend” is by definition temporary and uncertain: it does not make it possible to definitively close the gap which has widened between the level of prices and that of wages. Even if he‘inflation calms down and returns to a “normal” rhythm, the prices on the labels will not come back down… Unless we fall into a serious crisis and a deflationary scenario, which seems to be a matter of economic fiction in the short term.

These two arguments explain the reluctance of the unions, who would prefer to see the issue of wage increases on the agenda. But the employers’ organizations are also cautious and see it as yet another Kafkaesque device. Small bosses especially, who do not necessarily get paid in salary, but in dividends, are holding back. It also remains to be seen what form it could take concretely. Should this device be added alongside the others? Or improve existing devices? Both ? “Absorbing a temporary shock with a new tool does not seem to me to be the right option: we are going to add even more complexity to our system which is already very complex”, warns Philippe Martin. So many questions that will agitate social partners, politicians and experts in the coming weeks.

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