It is a measure aimed at maintaining purchasing power, but without doing more. During his general policy speech Tuesday before the National Assembly, Michel Barnier announced that the minimum wage would be increased “by 2% from November 1, in anticipation of the date of January 1.”
“There remain in our country professional branches in which the minimums are lower than the minimum wage, this is not acceptable and this will be the subject of rapid negotiations,” added the Prime Minister, who cited among his five priority projects that of of the “standard of living of the French”.
Many coefficients still below the minimum wage
Twenty-five branches, or 15% of the total, had a salary scale including at least one coefficient lower than the minimum wage at the start of 2024, according to the Ministry of Labor. “It has now been shown that our cost reduction system slows down the rise in wages above the minimum wage: we will see it again,” continued the head of government.
With the increase in the minimum wage announced “in anticipation”, the monthly net minimum wage will thus be increased to around 1,426 euros net, compared to 1,398.70 euros currently.
In France, the minimum wage is the only salary indexed to inflation. Each year it benefits from a mechanical increase on January 1st and revaluations also occur during the year as soon as inflation exceeds 2%. The government can choose to go beyond the automatic increase with a “nudge”, but there has not been one since 2012. In this case, the Prime Minister announced an “anticipation”. This choice includes “November and December so in principle there will be no significant revaluation in January unless there is a boost beyond what the legal rules prescribe,” estimates economist Stéphane Carcillo, president of the group of experts. on the minimum wage.
The minimum wage has increased eight times since January 2021, including four times during the year due to inflation. The last revaluation was on January 1st.
Unions demand wage increases
The unions, who met the Prime Minister last week, include wage increases among their demands. The CGT, FSU and Solidaires demonstrated on Tuesday for the government to “respond to social demands”, particularly on these salary issues.
The number of employees paid the minimum wage has increased significantly in France. As of January 1, 2023, 17.3% of employees were affected. As the minimum wage increases faster than the rest of wages, certain sector minimums are caught up. The branches are thus regularly called to order by the government.
Exemptions, maximum at the minimum wage level, introduced to support employment, are today accused by certain economists of slowing down wage progression by creating “low-wage traps”. This is why Michel Barnier intends to review the contribution reduction system.
