• The government wants – again – to reduce the duration of unemployment benefit, which would drop from 40% in the event of unemployment to less than 6%.

  • Nevertheless, in the current economic context, such a downward trend in unemployment seems almost impossible during the whole of 2023.

  • Therefore, why propose a measure that has little chance of being effective one day?

It's a surprise under the tree that the unemployed would have done well.

On December 23, two days before Christmas, the government sent its draft decree on unemployment insurance to the social partners, with a new deal.

In addition to a 25% reduction in the duration of benefits when unemployment is below 9% from February 2023, already planned, a 40% reduction in the duration is planned if unemployment drops below 6 %.

The measure is much contested, in particular by the social partners and the political opposition, but does it at least have a chance of being applied one day?

Currently, lowering unemployment to 6% seems like a more impossible mission than all of Tom Cruise's filmography put together.

“The current economic situation is really, but really not, going towards a massive reduction in the number of unemployed in France”, summarizes Stéphanie Villers, macro-economist and adviser to PwC France.

Utopian goal

A quick glance at the state of France, and more generally of the European Union, makes it possible to understand the wall of reality that this decree risks eating away at.

Let us quote pell-mell inflation at 6.2% in November over one year in the country, and at almost 10% on average in the EU-27, a GDP growing by only 0.2% in the third quarter of year, and fears of recession.

In short, the French economy sucks badly.

The unemployment rate is at 7.3%, and after a sharp drop, its decline is slowing down.

It's only lost 0.1 points in one quarter, so there's still more than a full point to lose.

A goal as Herculean as “virtually impossible in such an economic context”, believes Stéphanie Villers.

Slow growth, high inflation, but also a rise in interest rates, decided by the European Central Bank, are almost incompatible with a sharp drop in the number of unemployed.

Inflation priority

With high interest rates, companies can borrow less without breaking the bank, thus reducing investments and hiring.

“This is also the stated objective of the European Central Bank: to lower demand, whether consumption or investment”, in order to finally reduce inflation.

The economy is like the resolutions of the beginning of the year: it is better not to scatter or run two hares at the same time.

“Very clearly, the French government has chosen to fight against inflation more than against unemployment,” comments Stéphanie Villers.

And the year 2023 is already shaping up to be quite complex in the battle for purchasing power, with the reduction in aid, the continuous rise in energy and food prices, and many companies on standby. and partial unemployment.

An anachronistic decree?

Barring an improbable scenario – such as a hard to imagine peace in Ukraine in the spring – the unemployment rate in France should remain stable, or even slightly increase, throughout 2023. Therefore, the question arises: why make it a decree? if the goal is unattainable?

Claire Vivès, sociologist at the Center for Employment and Labor Studies, believes: “Currently, everyone is talking about this possible 40% reduction in working time, which is quite hypothetical, and no one is focusing on the drop in 25% which will be effective from February 1st.

However, this is the most drastic reduction in the duration of unemployment compensation, which follows an already extremely harsh reform in 2021. "Especially since, as we have seen, France has little chance of going below 6%,



By setting the threshold at 6%, a desire to mourn full employment, set at 5%.

"It was an objective set by the Macron government for this second five-year term, but with the war in Ukraine, it seems difficult to achieve in the short term.

Setting a target of 6% and over 5 is already a bit of a gain on this target, ”says Stéphanie Villers.

A decree “for nothing”

For Claire Vivès: “To include in this decree a future reduction which will require a new decree in the event that we reach 6% is legally useless.

This reveals that there is no political risk in hitting the unemployed without interruption because part of the public is in favor of it.

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According to Anne Eydoux, lecturer in economics at the National Conservatory of Arts and Crafts, this decree is part of a long-term logic of “unraveling the current unemployment insurance system.

Beyond the budget cuts, we are witnessing a major reform of governance.

This is less and less equal and has been largely taken over by the government since 2018.

For the expert, “the reforms announced today correspond to even greater savings.

It is as if job seekers were made to pay the cost of the partial activity measures, co-financed by Unédic, which were used to support companies during the health crisis.

»

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  • Economy

  • Unemployment

  • Unemployment insurance

  • Inflation

  • Crisis

  • Unemployed