1. In paid employment, whatever is classified as ‘employer-paid’ is in fact part of wages, and whatever is classified as ‘wage-paid’ is in fact employer-paid.
Paid employment is an economic exchange, which is therefore always a market, between an employer and an employee, who is also always an individual. When the employer is apparently the same individual as the employee, the exchange is in reality between the enterprise that belongs to that individual and the latter as an employee. Even if the self-employed person keeps the accounts of his enterprise and his own together, in truth these separate accounts exist. This does not imply that every employer is an enterprise. There is no such thing as non-market paid employment, but employers are not just enterprises. While all employers are bosses, everything that is employer is far from being ipso facto entrepreneurial.
2. Any recurring expense paid by an employer in respect of a job is an element of the wage of the worker who occupies that job.
This is rightly the rule that is followed for ‘benefits in kind’: the provision of a service or good to an employee by his or her employer is an element of wage. The employer's shares of the contributions based on wages are a supply of this kind. Pretending they were subsidies is a fiction.
3. Deemed employer contributions that are made to pay a wage are wage-related.
These contributions are part of the complete wages – full wages. The cost of labor is the sum of the net wage – the one that the employee receives in cash – and the indirect wage – the supplies paid for by the employer that are part of the whole wage. In both general accounting and cost accounting and management control, the personnel costs counted among the costs are full wages, including the employer's deemed contributions.
4. The repeal of the employer's share of contributions based on wages does not change anything in net wages, on one condition.
This condition is, of course, that gross wages are increased by the employer's deemed contributions.
5. Before this repeal, Jacqueline's wage deemed to be gross was 100.
Of these 100 deemed gross contributions, the net of employee deemed contributions is, for example, 80 and the employer deemed contributions are 30. Jacqueline is, by this measure, encouraged to consider that her social security coverage costs her 20. In reality, it costs him 50, since the 30 deemed bosses are part of his wage.
6. After the repeal, Jacqueline's gross wage was increased to 130.
His wage net of employee contributions remains at 80 (130 minus 50). A substantial fraction of wages loses its usurped reputation as a subsidy.
7. The fiction of employers' contributions blocks self-regulation, because it puts the insured in a position to abuse and allow benefits to be abused.
Compulsory insurance schemes financed by a large proportion of employers' contributions are exposed to becoming and remaining structurally loss-making. The reason for this is quite simple: their beneficiaries do not realize what it costs them. A management link consubstantial with the very principle of mutualisation is untied.
8. The fiction of employer contributions provides employers with a usurped title to participate in the administration of considerable funds.
However, these funds really come only from the real contributors, who are all individuals and none of whom are an enterprise or any other kind of employer. Their administration, entrusted to returnable joint-stock enterprises, is all the more difficult to exclude as it is likely to become exemplary in the full-trade economy (on what are returnable shares, see the chapter on capital).
9. Compulsory levies have one thing in common with their part consisting of taxes in the strict sense.
They are, in reality, the sole responsibility of individuals and their private non-commercial associations, regardless of the methods of their collection.
10. The fiction of employer contributions also has the disadvantage that a large number of wage comparisons and negotiations relate to lower prices.
Moreover, when there are different social security schemes, particularly between the private and public sectors, a large number of wage comparisons and negotiations relate to unequally lower prices.