The reduction in the level of unemployment in France over the past two years accelerated during July 1999. This development has fuelled government optimism, but trade unions and employers' organisations were more varied in their reactions.
Download article in original language : FR9909106NFR.DOC
The reduction in the level of unemployment in France over the past two years accelerated during July 1999. This development has fuelled government optimism, but trade unions and employers' organisations were more varied in their reactions.
For the first time, the Minister for Employment and Solidarity, Martine Aubry, personally presented the July 1999 employment figures to the press. Unemployment fell by an unprecedented 52,600, a drop of 1.9% for "category 1" job-seekers - ie those unemployed people looking for full-time work on an open-ended contract who have not performed more than 78 hours of casual labour during the month. This substantial decrease is due in part to the fact that a dispensation from active job-seeking has been extended to certain categories of unemployed people over the age of 55, receiving benefits. Those covered by this dispensation are no longer considered to be unemployed but nevertheless continue to receive benefits. However, even when the figures are adjusted to take account of this fact, unemployment still dropped by 38,600 (1.4%) in July. There are two reasons why this decrease cannot merely be put down to chance:
it represents an acceleration of a trend observed over the past two years. Since June 1997, the number of job seekers has fallen by 367,100 or 11.7%; and
the fall is due mainly to increased employment rather than retirement. In 1998, France, with GDP growth at 3.2%, created 406,000 new jobs ( 1.8%), of which 310,000 were in the private sector. Jobs created in the public sector were mainly the result of the "new jobs for young people" scheme. Despite a temporary slowdown in economic growth, 130,000 jobs were created during the first half of 1999 in the private sector.
The government has therefore presented a very upbeat assessment of its policies. The Prime Minister, Lionel Jospin, announced that its "central goal" was to "return France to a society of full employment in the coming decade". The social partners, although not denying that the situation had indeed improved, were more varied in their assessment of the situation.
Above all, the trade unions stressed that despite the progress made, unemployment as calculated by the International Labour Organisation remains very high at 11.2%. The only countries in the European Union to have higher rates are Italy and Spain. If current trends are maintained, and growth hovers around an annual 3%, it will take a decade to return to full employment.
The unions also stated that the majority of jobs created are precarious. For example, the amount of temporary work obtained through employment agencies, calculated as an equivalent of full-time work, rose by 27% in 1998. In January 1999, 41% of unemployed people had become unemployed because of the end of a temporary job (either a fixed-term contract or temporary agency work). In July 1999, some 550,000 job-seekers were not included in category 1 because they had worked more than 78 hours casual labour in the course of the month - ie more hours than half a full-time job. The Minister for Employment and Solidarity has announced her intention to tax companies which "abuse precarious employment".
Finally, the risk of exclusion from the labour market still looms large: even though the number of long-term unemployed people (those unemployed for more than a year) has fallen by 9% over the past year, they still account for 39% of all job-seekers.
Employers' associations look at the situation from a different angle. First, they point out that labour shortages have begun to appear in certain sectors and occupations. In their view, the quantitative reduction in unemployment heightens the problem of the qualitative mismatch between supply and demand of labour. Second, they stress that "companies are the creators of jobs." In light of this, current positive results are likely to be marred by rising pay costs and corporate taxation brought about by the current 35-hour week legislation (FR9906190F).
The upturn in the employment and unemployment situation cannot be denied. France has not recorded such good figures since the 1988-90 period, and this trend is set to continue in 2000. Beyond that, everything will depend on growth in the EU and the success of the current move to reduce working time.
Eurofound recommends citing this publication in the following way.
Eurofound (1999), Unemployment falls sharply, article.
