From 1 July 1997, all unemployment benefits were raised by 2.2%: in real terms, a 1.8% rise in purchasing power (after adjustment for inflation). This level of increase, considered satisfactory by the majority of the unions involved in running the scheme, was however judged "too low" by the CGT (Confédération générale du travail), which used the rise in the SMIC statutory minimum salary (by 4% from 1 July 1997 - FR9706153N [1]) as an argument in favour of a larger increase in unemployment benefits.[1] www.eurofound.europa.eu/ef/observatories/eurwork/articles/minimum-wage-increased-by-4
The administrative board of the national unemployment insurance scheme (UNEDIC), which is managed jointly by employers' associations and trade unions, adopted in July 1997 several measures aiming both to raise the level of benefit and overhaul the way its contingency fund is run. It is the second objective which has provoked the most heated reactions, especially from groups representing unemployed people.
From 1 July 1997, all unemployment benefits were raised by 2.2%: in real terms, a 1.8% rise in purchasing power (after adjustment for inflation). This level of increase, considered satisfactory by the majority of the unions involved in running the scheme, was however judged "too low" by the CGT (Confédération générale du travail), which used the rise in the SMIC statutory minimum salary (by 4% from 1 July 1997 - FR9706153N) as an argument in favour of a larger increase in unemployment benefits.
The other measure adopted by the UNEDIC administrative board, which will take effect on 1 October 1997, concerns the reorganisation of the ASSEDIC s' contingency fund, a scheme set up to provide aid and emergency payments to unemployed people in urgent need (ASSEDIC s are the regional branches of UNEDIC). Financially, the amount allocated to this fund will rise from its present level of FRF 1.2 billion, to FRF 1.4 billion. What is new is the opportunity henceforth available to ASSEDICs to put such services out to tender. ASSEDICs will be able to contract out material aid (housing, water or electricity, for example) to local specialists or institutions. Emergency assistance can also be farmed out to voluntary organisations, which, after signing a binding agreement on service provision, will be able to take over the distribution and management of this aid. It should also be noted that there has been a tightening of regulations concerning eligibility for this kind of payments. Only jobseekers who can prove that they were covered by the unemployment insurance scheme for four of the 12 months prior to their application can claim this benefit. In 1996, just under 300,000 people were given assistance from this fund.
Most groups representing unemployed people have signalled their disapproval of this decision by staging occupations of some ASSEDIC offices. One of the demonstrators summed up the mood thus : "Authorising outside companies to organise the contingency fund is a way for UNEDIC to distance itself totally from all notions of solidarity with the poorest". All unions and employers are signatories to the agreement on the issue except the CGT. For UNEDIC's president, Nicole Notat who is also the general secretary of the CFDT (Confédération française démocratique du travail) - this transfer of responsibility will enable the benefit to be allocated more efficiently and fairly. As for the CGT, it justifies its refusal to sign up by stating that the transfer may well penalise the most vulnerable group of jobless people.
Eurofound recommends citing this publication in the following way.
Eurofound (1997), UNEDIC reforms management of contingency fund, article.
