Early SMIC increase under discussion

The French government is considering an early increase in the SMIC, the national minimum wage, which is normally adjusted automatically on January 1st. However, Labor Minister Jean-Pierre Farandou stated that no decision has been made yet, and Economy Minister Roland Lescure noted that the idea is still under discussion.

SMIC revaluation criteria

The SMIC is adjusted annually based on two factors: inflation affecting the 20% of households with the lowest incomes and half of the increase in purchasing power from the hourly basic wage of workers and employees. It can also rise mid-year if inflation exceeds 2% since the last revaluation, as happened in June last year.

Potential early revaluation impact

According to MoneyVox calculations using Insee inflation forecasts, the January revaluation would likely be less than 1%, considering the 2.41% increase from June. If the government moves the increase forward, it could be implemented in November or December, resulting in a gain of 14 euros or 28 euros for minimum-wage workers, depending on the timing.

Government could opt for a "boost"

The government has the option to apply a "boost," an extra increase beyond the automatic calculation. This was last used in 2012, when the SMIC hourly rate was raised by 2%—1.4% for inflation and an additional 0.6% boost. However, no mention of a boost has been made recently, making it unlikely to be used again.

Employers oppose early revaluation

The early increase is already controversial, with employers warning it could "create chaos in companies." Patrick Martin of the Medef, a major employers' association, expressed concern about the potential impact on businesses. Meanwhile, unions like the CGT are pushing for a much larger increase, calling for a 10% rise in the minimum wage.