President Emmanuel Macron has promised a minimum wage rise and tax concessions in response to weeks of violent protests.
France has seen four weekends of violent protests against fuel tax rises, living costs and other issues.
Speaking in a televised address, Mr. Macron condemned the violence but said the protesters’ anger was “deep, and in many ways legitimate”.
The minimum wage would increase by €100 per month from 2019, he said.
A planned tax increase for low-income pensioners would be cancelled, overtime pay would no longer be taxed, and employers would be encouraged to pay a tax-free end of year bonus to employees, he added.
However, he refused to reinstate a tax on the wealthy, saying “this would weaken us, we need to create jobs”.
The minimum wage will be increased by 7% – and the cost of this increase will be met by the government rather than employers.
Government minister Olivier Dussopt told broadcaster BFMTV the total cost of all the measures is likely to be between €8bn and €10bn.
“We are in the process of fine-tuning and to see how to finance it,” he added.
The protesters adopted the name after a social-media campaign urging people to take to the streets wearing the high-visibility yellow jackets that must be carried in every vehicle in France.
They were initially protesting against a rise in duties on diesel, which is widely used by French motorists and has long been less heavily taxed than other types of fuel.
Mr. Macron had said higher taxes on fossil fuels were needed to fund renewable energy investments.
