Inflation rate rise triggers new minimum wage rise in France

In March the inflation rate continued to rise in France, and prices are now estimated to have grown by 4.5% since March 2021, reports the national statistics institute Insee.

This is compared to a 3.6% increase between February 2021 and February 2022.

This rate will lead to an automatic boost of 2.4-2.6% to the French minimum wage (known as the ‘Smic’) on May 1.

France’s minimum wage is currently €1,269 net per month, and so is expected to rise to between €1,299 and €1,304 per month. The exact change will be confirmed on April 15.

The Smic already rose by 0.9% in January after an exceptional rise of 2.2% in October, linked to inflation.

The national Code du travail states that “when the national inflation index reaches a level corresponding to a rise of at least 2%,” as it has done this March, the minimum wage must be increased “in the same proportion.”

Prices have indeed risen by more than 2% between November and March, which is the reference period for the recalculations.

French inflation rate growth is also accelerating, having risen by 1.4% between February and March, compared to 0.8% between January and February.

As well as the surge in the price of energy and fuel which has been exacerbated by the war in Ukraine, Insee has also observed a rise in the cost of manufactured goods and food.

In Germany, the year-on-year inflation reached 7.3% in March, something not seen since November 1981, and in Spain it was at 9.8%.

Can France’s presidential candidates successfully address the issue?

A new survey involving 992 adults, carried out by market research firm Ipsos Sopra-Steria for France Télévisions and Radio France has found that 71% of respondents believe that politicians can impact public spending power.

Some 74% also said that buying power has declined over the past five years for people in France.

It has become a key election topic although respondents did not generally reflect much faith in the candidates for this year’s presidential election.

President-candidate Emmanuel Macron (La République en Marche!) and Marine Le Pen (Rassemblement national) were viewed as the candidates who were best placed to improve the situation, but both of them had only managed to convince 32% of participants.

Overall, respondents (just) placed most trust in Ms Le Pen, with 59% not believing in her ability to ensure buying power, while 60% lacked confidence in President Macron.

Mr Macron and Ms Le Pen are currently the two candidates widely predicted to qualify for the second round. Mr Macron is expected to gain 28% of the vote and Ms Le Pen 20% in the first round, according to the most recent poll by research company OpinionWay this week.

Jean-Luc Mélenchon (La France Insoumise) emerged as the third-most trusted candidate with regards to addressing the cost of living crisis, with 28% of people saying that they had confidence in him, compared to 22% for Valérie Pécresse (Les Républicains).

Anne Hidalgo (Parti Socialiste) came at the bottom of the list – which only studied eight of the 12 candidates – with only 12% of respondents trusting in her ability to successfully address the issue.

The survey also found that, in terms of the cost of living, 65% of respondents were most worried about energy prices, with 55% most concerned by inflation and 44% by pensions.

Some 84% of participants feared a significant increase in energy costs, and 79% were worried about a rise in fuel prices.

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