French Labour Minister Xavier Bertrand refused to confirm a media report on Thursday that the national minimum wage would be lifted by just 2 percent in July, well below rises in previous years.
"It will go up on July 1," Bertrand told BFM television. "By how much? I'm not going to play the mystery man this morning but there are rules," he said, noting that the level would be agreed after talks with unions and employer groups later this month.
Business daily Les Echos said the minimum wage, called the SMIC, would rise by 2 percent in July to 8.44 euros ($11.22) an hour, below the 3.05 percent increase last year or the 5.5 percent rise in 2005, due to moderate inflation pressures.
National statistics office INSEE said on Wednesday that consumer prices rose 0.3 percent in May from the previous month and 1.2 percent from a year earlier.
The SMIC, earned by some 17 percent of French workers, is currently set at a gross 8.27 euros an hour or 1,254.28 euros a month, according to INSEE. It is re-evaluated annually on July 1, based on a formula designed to keep pace with consumer prices but the government can choose to increase it by more than inflation.
Bertrand noted that President Nicolas Sarkozy said during the election campaign that he wanted to give a boost to all employees, not just those on the minimum wage. A moderate rise in the SMIC would please the European Central Bank, which has been issuing its customary warnings against excessive pay deals.
But the report comes amid controversy in France over government plans to look at a possible increase in value-added tax by up to five percentage points, a move that the opposition Socialists say would unfairly hit those on low incomes.
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