Unions in New Caledonia have secured a 4.2 percent increase of the lowest salaries from January 1, 2023.
The concession by the employers' organisation MEDEF was announced as a large crowd rallied for a general strike outside its offices in Noumea.
According to the police, 1500 people had gathered to press their demands while the unions said they mobilised 5000 members.
The unions had sought an across-the-board pay increase of six percent in the private sector to offset the impact of inflation, which in November was 4.4 percent.
The wage hike applies for those between the monthly $US1440 minimum pay and those earning up to $US1775.
Port of Noumea, New Caledonia. Photo: RNZ / Johnny Blades
MEDEF said inflation has hit businesses hard as production costs are rising faster than product prices, in particular with the rise in the cost of energy.
The organisation said New Caledonian companies face a decline as GDP has dropped by 5.9 percent since 2018.
MEDEF said the social partners became aware early on of the negative impact of imported inflation on the purchasing power of New Caledonians.
It said as early as May it and the unions unanimously and jointly asked the government to hold a conference on wages.
MEDEF said since April, there have been proposals for tax reform which combines economic recovery and resetting of net wages.
It said raising wages has therefore always been a key aspect of the planned tax reform.
The government wants to hold a conference next week to discuss reforms in view of the crisis facing public finances.