Wage hikes prove a tough equation for France's social partners

Prime Minister Sébastien Lecornu hosts a social conference Monday with unions and employers to address wage increases, facing pressure after protests drew up to 1.6 million people. Real wages in the private sector fell 1.1% over the past year and 3.3% since 2021, adjusted for inflation. The government can only act on the minimum wage, with unions demanding increases up to 10%, while employers warn against combining wage hikes with planned cuts to payroll tax relief. Economists argue the current system of state subsidies for low wages creates a trap, as minimum wage rises compress other salaries. Some propose a major reform shifting certain employer contributions to a broader tax base, though the weakened government has limited room to maneuver.