The French government has announced an early increase in the minimum wage due to ongoing protests about rising living costs. Prime Minister Sébastien Lecornu said on Monday that the 1.6% wage hike, originally set for January 2027, will now start on December 1, 2026. This change raises the minimum monthly wage from 1,477.93 euros ($1,656) to about 1,502 euros ($1,683), an increase of 24 euros ($27).
Key Details
Lecornu noted that this increase is the second-largest rise in two decades. He said, "Raising the minimum wage is not enough, but it has a major benefit: it kicks off a cycle of discussions on pay rises." The government is also starting sectoral pay talks and plans to introduce tax measures to ease employer worries about rising labor costs. These measures include income tax exemptions for overtime pay up to 10,000 euros.
Background
Despite the increase, labor unions are not satisfied. The CFDT, France's largest union, is asking for a 100-euro ($112) increase. The CGT union is seeking a 10% rise, which would be about 150 euros ($168) per month. Lecornu recognized the need for more discussions on wage increases but defended the government's actions. He stated, "I no longer believe in headline-grabbing announcements… the government is doing everything it can."
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The wage increase could affect consumer spending and inflation rates, especially in the retail and service sectors. Higher wages may lead to increased purchasing power. Investors will keep an eye on upcoming negotiations on sectoral pay and any further government actions to address living costs.
Based on reporting by: aljazeera.com, euronews.com