These relief measures are, in normal times, indexed to the minimum wage. In June, the government decides to freeze their scale at the moment when it should have risen automatically, in order to achieve savings. Without indexation, an increase in the minimum wage does not trigger additional relief. In its draft social security budget for 2027, the executive mentions its intention to extend this freeze. In a scenario in which it raised the minimum wage to 1,700 euros, it could also reverse this decision.
The government raises the net minimum wage to 1,501.90 euros on December 1, after an early increase of 1.6%. La France Insoumise and the Socialist Party, for their part, are calling for a net minimum wage of 1,700 euros. The executive asserts that such a level would destroy jobs on a massive scale. Economists do not quantify the same shock.
The stakes go beyond the announced boost. They pit purchasing power against labor costs and the reliability of the models used to inform wage policy. Depending on the scenario chosen, the balance ranges from a few tens of thousands of jobs destroyed to an order of magnitude close to 230,000.
At the end of the social conference on purchasing power and wages, the government announces on Monday, November 9, this 1.6% increase, effective as of December 1. The monthly net minimum wage rises from 1,477.93 euros to 1,501.90 euros.
According to the executive’s estimate, the real supplement falls to 0.6% once the automatic annual increase, estimated at around 1% on January 1, is deducted. The rise remains well below the amounts chanted in the marches.
Trade unions are outraged by the amount chosen, which falls short of their demands. The CFDT is calling for an additional 100 euros net per month. The CGT is asking for 150.
La France Insoumise, as well as the Socialist Party in its alternative budget for 2027, are aiming for an increase of nearly 223 euros, in order to bring the net minimum wage to 1,700 euros. The government maintains that an increase to that level would produce massive job losses.
The labor minister already estimates that the 1.6% increase alone would cause a loss of 5,000 to 20,000 jobs. He relies on a note from the ministry’s statistical service, which has not been released to the press.
According to him, economists cannot distinguish between layoffs, fixed-term contracts that are not renewed, and hires that do not take place. “It is both at once,” he lists. Young people would be on the front line, “since they often start their careers at the minimum wage or close to the minimum wage.”.
In an initial calculation, Heyer arrives at a balance close to that of the labor minister: 217,500 jobs destroyed. He subtracts 390,000 jobs linked to the rise in labor costs, then adds 172,000 jobs linked to purchasing power. Stronger consumption would support business activity and therefore employment.
He then factors in the indexation of employer contribution relief to a net minimum wage raised to 1,700 euros. This additional exemption would lower labor costs and create 183,000 jobs. The balance then falls to 34,500 jobs destroyed. By applying earlier calculations to an increase of about 15%, he sets out the same assessment on X. He had previously estimated that a 12.4% increase would destroy 29,000 jobs, far from the hundreds of thousands put forward by the government. Material published by BFMTV also places this balance of about 34,500 jobs far from the roughly 230,000 sometimes highlighted.
“If the model is set up to say that there is an effect, then an effect on employment will be found,” Heyer notes further. French history sheds little light on the debate: the minimum wage has experienced “total stagnation” in recent decades. The disagreement therefore concerns less the existence of an employment effect than its scale, depending on whether labor costs are considered in isolation or purchasing power and contribution relief are added.