It’s been a four-year wait for French President François Hollande, who somewhat thoughtlessly announced that he would not attempt a re-election bid unless unemployment fell during his five-year term of office. Figures released Thursday by the French National Institute of Statistics and Economic Studies, INSEE, reveal a fall of -0.3% in the second quarter compared with the first.
INSEE announced that on June 30th the jobless rate stood at 9.6% of the active population in mainland France, and at 9.9% of France’s overall active population, including both mainland France and its overseas territories.
The figures should be taken with a degree of caution, given that INSEE itself warns that they carry a margin of error of 0.3%, equal to the very amount it calculates unemployment has fallen by. But that did not stop labour minister Myriam El Khomri from sending a triumphant Tweet. “With a fall of 74,000 jobless in the 2nd quarter 2016, unemployment is at its lowest level since 2012,” read her message. It is the first time that the jobless rate had dipped below the 10% mark since the start of Hollande’s five-year presidential term in May 2012.
Never before has it taken as long for the French unemployment rate to recover from an economic crisis, despite the unusually favourable circumstances for a recovery, including the fall in the value of the euro, the fall of oil prices, a very accommodating European monetary policy and the eurozone recovery.
This exceptional set of circumstances, celebrated by numerous economists, should have allowed for a strong return of economic activity and job creations. But instead, owing to the significant destruction over recent years of industrial and tertiary services’ production, there was none of it;
According to INSEE, the number of jobless in mainland France at the end of June was 2.767 million, including 1.2 million people who have been unemployed over the past year. INSEE’s calculations are based on criteria laid down by the International Labour Organisation (ILO), and which are different from those used by the French national employment office, Pôle emploi. For that reason, it recorded 5,300 more people without any working acrtivity (category A) than Pôle emploi.
The fall in the number of jobless announced on Thursday applies to all categories of jobless, but was most notable among the 15-24 age group, the priority target for the government, among which unemployment fell by 0.4% in the second quarter compared with the first, although the rate remains stable when calculated over the 12-month period to June 31st.
But despite the relative improvement in the second quarter, the young remain highly vulnerable, with 23.7% of under-25-year-olds out of work, demonstrating the grip of mass unemployment.
Neither can the improvement disguise the degradation of the labour market and its resulting effects of social exclusion. INSEE notes a mounting “halo around unemployment” in a reference to those it estimates to number 1.5 million who seek work but who are not registered as unemployed. The institute estimates there has been a 43,000 increase in their numbers over the past 12 months.
Under-employment is also on the rise. While INSEE reports that part-time contracts have fallen slightly during the second quarter (down -0.1%) while full-time contracts have increased (by 0.2% for long-term contracts and by 0.1% for short-term contracts), it found a rise in the number of under-employed – those who are on part-time contracts and who wish to work more. That category now represents 6.7% of all those in work, a rise of 0.3% during the second quarter.
The question now is whether the unemployment rate will continue to fall over the coming months. Different economic indicators suggest that as of the beginning of the third quarter there has been a slowdown in activity, and even a return to stagnation in the eurozone. Meanwhile the French socialist government appears to be ready to use every means to produce a fall in jobless numbers, including a massaging of statistics.
Rather than await the hypothetical beneficial effects of the recently adopted labour law reform, which it has claimed is set “to liberate energies”, it is hoping for a speedier result by reverting to old practices. As the investigative and satirical weekly Le Canard Enchaîné revealed earlier this month, the management of the national employment agency, Pôle Emploi, has sent out an internal “general mobilisation” plan to its staff detailing a drive to place 500,000 registered unemployed in professional training courses. The manoeuvre is aimed at producing a fall in the number of jobless by moving those sent for training from categories A, B and C – categories that make up the official number of jobless – into category D, which is not used in the calculations, because they would be temporarily unavailable to seek employment.
Meanwhile, in a book of conversations between Hollande and two journalists published this week (‘Conversations privées avec le président’), the French president spoke of his regrets at having announced, just seven months after his election, that the rise in unemployment would be halted by the end of 2012. "The mistake is to have set the deadline for ‘before the end of the year’ as the point of arrival,” he told journalists Antonin André and Karim Rissouli, who met with Hollande on 32 occasions for the interviews that appear in the book. But Hollande also appears to regret having made any re-election bid conditional to reducing unemployment. “I made this announcement about reversing the rise in unemployment because I believed still that growth would be 0.7% – 0.8%. It was finally to be 0.1% or 0.2%. Then, I repeated this engagement during the December 31st 2012 new year’s wishes [TV appearance]. I was wrong to do so.” Hollande observed that an improvement in the jobless figures is not down to the results of just one month. “You don’t elect a president because ‘he created a bit more or a bit less unemployment’,” Hollande added. Nevertheless, it appears everything is being attempted to produce figures that just about meets his now regretted pledge.
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- The French version of this article can be found here.
English version by Graham Tearse