Économie et Statistique n° 448-449 - Minimum Wage - Victimization

Economie et Statistique
Paru le : 25/10/2012
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From the minimum wage to living standards: components and trends

Adélaïde Favrat, Delphine Prady et Chloé Tavan

In 2011, workers earning the hourly minimum wage were more likely to be at the low end of the living-standards scale than other employees. Their living standards stood at a mere two-thirds of those of employees earning over 1.1 times the minimum wage. This differential reflects the fact that minimum-wage workers have less earned income, especially as they are more likely to work part-time and to experience jobless spells during the year. The tax and social-insurance system, however, tends to narrow the gap by raising the average living standard of minimum-wage workers by 8% and lowering that of workers paid above the minimum wage. Social benefits and employment-support measures account for a total 11% of minimum-wage workers' disposable income. On the other hand, the contribution of employment-support measures-the working tax credit (Prime Pour l'Emploi: PPE) and the work-related provisions of the earned-income supplement (Revenu de Solidarité Active: RSA)-is modest by comparison with the other components of minimum-wage workers' disposable income, owing to jobless spells and supplementary income received by their households, which excludes them from these means-tested benefits. The living standards of minimum-wage workers are, however, relatively diverse. Twenty-eight percent have a living standard above the median level. This is mainly due to the annual number of hours worked and spousal income contributions. Minimum-wage workers living in single-parent families have far lower living standards than people living in partnerships without children, despite fairly similar wage income. Between 1999 and 2012, for a given family configuration and a given number of hours worked, social-insurance and tax legislation boosted the real disposable income of minimum-wage households faster than the real minimum wage, by over 10% versus 7%. The implementation of measures to support the income of low-wage workers-the PPE in 2001 and the RSA...

Economie et Statistique
No 448-449
Paru le : 25/10/2012