France Nixes Wage Hike

August 1, 2002
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The new government of France seems to have gotten started off on the wrong foot in its relationship with the country's labor unions by refusing demands to hike the national minimum wage more than the legal 2.4 percent minimum.

Observers say holding the line against union demands is an indicator of how the new, center-right government and President Jacques Chirac intend to proceed. However, the early "victory" may prove a double-edged sword: while business leaders are applauding the government's decision, the fact remains that Prime Minister Jean-Pierre Raffarin will need labor support in order to make good on his program of labor, tax and pension reforms.

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