French PM's move to increase minimum wage fails to convince unions

Prime Minister Sébastien Lecornu announced the proposals following a meeting with trade unions and employers' organisations called in response to protests and strikes since mid-September over wages, purchasing power and employment.

Under pressure to address the discontent, the government has little room for manoeuvre, as the country is in debt and facing European deficit-reduction requirements, and the ruling party lacks a parliamentary majority to pass its 2027 budget.

The minimum wage, known as the Smic, will go up by around €24 per month, bringing take-home pay to approximately €1,502 from 1 December. The increase combines an early adjustment, linked to inflation, which would normally go into effect in January, along with an additional increase.

Lecornu described it as the second largest minimum wage increase in 20 years, arguing that it should not be dismissed as merely symbolic. It is the first increase initiated by the government that goes above the automatic inflation adjustment since July 2021.

He said it would help launch a new round of wage negotiations across sectors and individual companies, where decisions on pay increases are made by employers and unions.

Unions call increase 'crumbs'

Trade unions slammed the increase, saying it falls well short of what workers need.

The CFDT union had called for an additional €100 net per month, while the CGT demanded a 10 percent increase, equivalent to around €150.

"The government has only announced crumbs," CGT Secretary General Sophie Binet told reporters. 

She argued that once the automatic inflation adjustment that would have come into force in January is taken into account, the additional increase amounts to just €5 - the cost of "a kilogramme of tomatoes".

"We didn't come here to beg for alms," she added, calling for new protests on 17 November.

Podcast: France's student protests and how they fuelled a larger social movement

Other proposals include raising the ceiling for tax-free overtime pay, from €7,500 to €10,000, extending tax exemptions for employee profit-sharing bonuses and introducing energy-related bonuses.

Economy Minister Roland Lescure also said the government would propose extending fuel allowances into 2027.

The government additionally plans to issue a decree requiring companies to disclose all public assistance they receive to employee representatives.

Lecornu also promised a review of employers' social security contributions, aimed at encouraging higher wages without adding additional labour costs to businesses.

Boost for salary negotiations?

The government hopes further negotiations between unions and employers will produce wage increases before December.

Public sector unions, which were not invited to Monday's meeting, are due to meet Lecornu on Friday. Several have already called for a public sector strike on 17 November over pay, particularly a freeze of the index used to calculate base salaries.

The index has not increased since July 2023, meaning civil servants have not received any general pay rises for more than three years, even as inflation has increased.

Lecornu was due to meet representatives of high school and university students on Monday afternoon, followed by the first meeting of a committee reviewing Parcoursup, the university admissions platform. The system has been a major focus of the protests, with students arguing it is opaque and unfair.

The protest movement began with high school students in September and has since spread to other sections of society. The wider union coalition was also due to discuss on Monday evening whether to continue the protest movement.

(with newswires)