2023-04-19 20:37:53
TEmpo instead of standstill: With the pension reform in place, the French government of President Emmanuel Macron is already daring to tackle the next major economic construction site. This time it’s about work and employment. The government is pursuing three goals: First, it wants to ensure that employees have a better share in the company’s success.
To this end, the country-wide and cross-industry agreement that French employers and trade unions reached in February after weeks of talks is to be cast in law. Companies with more than 11 employees who achieve a net profit of more than one percent of their turnover three years in a row must therefore introduce a profit-sharing system. This can be, for example, tax- and duty-free special bonuses or the establishment of a company pension savings plan.
The second goal is improved working conditions and in particular a higher employment rate for older French people. Due to widespread early retirement regulations, but also occasional discrimination in many companies, the government sees a need for action, especially in the 60-plus cohort. Actually, therefore, in the course of the pension reform, measures such as the introduction of a “senior citizens’ index” were planned, which would have imposed new transparency obligations on companies with at least 300 employees regarding the employment of older workers.
However, the Constitutional Council considered this to be inconsistent with the legal framework chosen for the pension reform. It is now up to the social partners to improve working conditions. Macron urged them to negotiate a “pact for life at work” by the end of the year. However, it is still unclear whether the unions will readily comply after they turned down an invitation from the President to the Élysée Palace earlier this week to protest against the pension reform.
Third, finally, Paris plans institutional reforms to achieve “full employment” by 2027, meaning an unemployment rate below 5 percent; it is currently around 7 percent. In addition to the vocational schools, the focus is on job placement. Similar to how the employment offices were renamed job centers in the course of the German Hartz reforms, the responsible French authority “Pôle emploi” is also to be known as “France Travail” in the future and, with newly sorted administrative responsibilities, will be able to identify job seekers more quickly and refer them to the right places.
“Challenge and Promote”
A report prepared under the responsibility of Labor Minister Olivier Dussopt calls for action. “Given the fragmentation of actors and responsibilities, today no actor (…) is able to identify all unemployed people in its field,” it says. The authors of the report emphasize that better job placement does not come for free, but requires investments of 2.3 to 2.7 billion euros in the period 2024 to 2026.
Political explosiveness is programmed if the government also dares to provide basic security in the course of this. At the beginning of March, Minister of Labor Dussopt announced that he would provide better support to recipients of benefits, of whom only 40 percent are currently registered with Pôle emploi. New sanctions are also planned for those who miss the planned 15 to 20 hours a week for training, support and job search – so here too a reference to the Hartz reforms with their mantra “Challenge and support”.
The subject is no less mined in France than in Germany. Only on Tuesday did Finance and Economics Minister Bruno Le Maire provoke indignation on the political left with statements about social fraud. “Our compatriots are fed up,” he told BFM TV, “to see that people can claim help, send them back to the Maghreb or elsewhere, even though they are not entitled to it”.
Economists warn that when fighting unemployment, the focus should be on young people in particular. “The underemployment of young people is the biggest obstacle to the goal of full employment,” said Antonin Bergeaud from the Paris business school HEC. He commends Macron’s 2018 apprenticeship reform, which has resulted in a significant increase in the number of apprenticeship contracts, even if it has been costly in terms of corporate subsidies.
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