Distributing dividends among employees is one of France's solutions to combat inflation

One of France's possible solutions to combat rising inflation will be to distribute dividends among employees, in the cases of companies that already distribute them among shareholders.

11/28/2022

This is a measure that the French government wants to approve for the next 5 years, and which has been on the “dialogue table” since November 8.

It is clear that with increasing inflation, the purchasing power of workers has decreased significantly, and in this context, requests for salary increases are increasing, and this of distributing dividends among the business workforce would be a way to expand profits.

This is an electoral promise by Emmanuel Macron, which he already wanted to approve this summer, but which despite the delay he hopes to be able to make effective and binding in the next five years, and is based on the statement that when there is an increase in dividends for shareholders, there should be an identical mechanism for employees.

According to data from the NGO Observatoire des Multinationales, the 40 main French companies paid a record figure of 57,500 million in dividends to their shareholders during 2021.

French workers are also already protected by other mechanisms, such as profit sharing, which is conditional on the company's results, since in organizations with more than 50 workers, participation is mandatory, and there are also exceptional payments, which were initially called the "Macron bonus", but were finally called the "value-sharing bonus", money that is also tax-exempt up to €6,000 per year.

Inflation

It is expected that the French government will be able to finish the negotiations before January 31, but for now it does not have the support of employers (who prefer to review existing models and, if necessary, improve them), nor of unions (who reject replacing salaries with subscriptions and demand that salaries be indexed to inflation). It remains to be seen what happens, although the French government hopes to be able to push this measure forward with other support.

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