Report examines precarious employment and poverty
In June 2000, France's National Economic Planning Agency issued a report examining minimum social benefits, work-related income and precarious employment, highlighting the problems of the national welfare system. It recommends a number of reforms of labour market regulation, unemployment benefit and other aspects of social security.
A report compiled by the National Economic Planning Agency (Commissariat général du Plan), chaired by Jean-Michel Belorgey- one of the architects of the "occupational integration minimum income" (revenu minimum d'insertion, RMI) set up in 1988 - was released on 7 June 2000. This report, entitled Minimum benefits, work-related income and precarious employment (Les minima sociaux, revenus d'activité et précarité) provides a comprehensive overview of the French welfare system and its shortcomings, especially in terms of the increase in precarious employment. The report sets out a number of recommendations based on a range of ideas and assessments.
First, the report states that new labour market regulations are required. A core legal framework governing work activity is required to pool and stabilise employment by encouraging the development of "employer groupings" which would enable employees to work for various different companies. This, according to the authors of the report, would provide "proactive job security" in an increasingly flexible labour market.
The report paints a harsh picture of decay in the unemployment benefit system (FR0006171F). Between 1992 and 1998, the percentage of unemployed people eligible for benefits under the unemployment insurance system fell from 53% to 42%. During the same period, the percentage of unemployed people receiving benefits under half the national minimum wage (SMIC) rose from under 15% to close to 40%. On the strength of these figures, the report recommends improved unemployment insurance coverage for workers in precarious employment and a system of variable employer unemployment insurance contributions based on a company's employment policy. In more general terms, the report maintains that it is the government's role, through parliament, to set out overall unemployment benefit policy. In so doing, the report is also pushing for the strengthening of tripartite (government, trade unions and employers' associations) consultation.
In terms of minimum benefits, the report recommends an increase in the RMI to its initial level in relation to the SMIC. The authors of the report also highlight the alarming situation among young people, more than two-thirds of whom are not eligible for unemployment benefit and whom cannot claim the RMI until they are 25, except where they have dependent children. Although the report is not advocating the creation of a distinct "youth RMI", it does, however, point out that a situation whereby a percentage of young people have no social security coverage whatsoever is not acceptable. Therefore, the report recommends that an "independent young person's benefit" (Allocation jeune isolé, AJI) should be created.
The report also broaches the issue of "poverty traps". It highlights the fact that the unemployment benefit system is immensely complex and recommends that certain benefits be merged as a way of eventually moving towards greater individualisation of benefits, especially to avoid penalising a household receiving the RMI when one of the partners finds employment. The report also advocates the harmonisation of the particularly complex French system of housing benefit. It also comes out in favour of extending the rules governing the right to work and receive minimum benefits at the same time. This would be achieved by setting up a "negative taxation"-style mechanism. Aware of the fact that such a low-wage support policy could foster an increase in precarious employment, the authors of the report stress the need to supplement this measure with a real drive to give part-timers the right to move to full-time work.