Purchasing power: towards pay increases in dribs and drabs in 2025

In 2025, salary increases will be very limited: half of employees will not exceed 2.5% and 7% will not receive any increase, according to the study by Mercer, published Thursday, July 10. In an uncertain economic context and strong social tensions, the question of value sharing is becoming central.

We shouldn't count on a salary increase this year in 2025. Companies are cautious. According to a study by Mercer, a firm that annually surveys numerous companies in different sectors, half of employees will receive no more than a 2.5% increase in the next mandatory annual negotiations, compared to 4% at the same time in 2024, something unheard of since Covid, according to Mercer, which speaks of a historic decline in budgets dedicated to salary increases.

In recent years, there was no wage freeze. However, in 2025, 7% of companies plan not to increase salaries at all. Inflation has slowed significantly. It is now below 1%, after 2% in 2024 and 4.9% in 2023. In recent years, it is true, companies have tried to offset price increases. After Covid, many experienced a recovery in activity and posted good results. Today, the situation has changed.

The economic environment has darkened, with geopolitical tensions. Many sectors are hanging on the threat of US tariffs. Political stability in France is no longer the same. The business community lacks visibility, which is prompting it to tighten its grip. Companies are also anticipating upcoming budgetary efforts. Faced with François Bayrou, who reiterates that everyone will have to make an effort in 2025, companies, as well as employees and households, are expecting tax increases.

This situation could create social tensions, as workers risk being caught in a pincer movement: on the one hand, increases in taxes (with possible cuts in tax loopholes or a freeze on the scale in the event of a blank year), on the other, very limited salary increases, and therefore reduced purchasing power.

If companies try to compensate with meal vouchers or other benefits and at the same time pay out large dividends to their shareholders, things could get stuck.

Mercer noted a climate of heightened social tension in 2025. The number of disagreement reports regarding salary negotiations increased by 21% in March 2025, compared to 18% a year earlier. In a context of near-stagnation in salaries, the question of value sharing will become more pressing than ever.