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Rise in French jobless hits 20th consecutive month

January 31, 2013 | By Rachida El Azzouzi

The latest unemployment figures for France reveal that in December the number of jobless rose for the 20th consecutive month to reach a total of 3,132,900, bringing the number of people made unemployed during 2012 to 284,600. The socialist government has announced a barrage of measures to alleviate the trend, which it underlines began well before it came to power last May. But, as Rachida El Azzouzi reports, the initiatives have come under fire from labour unions and economists as being superficial and incapable of reversing the rise in unemployment that is expected this year to reach a historic high.

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The latest unemployment figures for France reveal that in December the number of jobless rose for the 20th consecutive month, to reach a total of 3,132,900, bringing the number of people made unemployed during 2012 to 284,600.

The figures, released by the national employment agency, Pôle-Emploi, on January 25th, show that despite the inexorable rise in unemployment, December’s was the lowest increase in any month last year at an almost negligible 0.1%. The number of jobless who had not worked for the whole month, known as Category A, grew by 3,700, including people in France’s overseas territories, taking the rise for the full year to 10 %, or 270,000 more people seeking work than a year earlier.

Curiously, there was also a surprisingly high level of people being struck from the jobless register in December. This figure rose by 24.5% month-on-month, with 9,200 more people struck off compared with November.

If people whose working hours had been cut during the month are included (categories B and C as well as A), registered unemployment  grew 0.3% in December with 12,600 more people looking for work, but this was lower than in previous months. Taking in all categories, unemployment rose 0.2% in the month with 10,200 more job seekers registered, bringing the overall rise to 8.8% for 2012. Thus by the end of last year, 4.63 million people were registered as looking for work, a figure that rises to 4.92 million if French overseas territories are included.

The government dwelt on December’s near-stable figure but noted the trend remained upward. "The stability in December is noticeable. Nevertheless, it does not mark a reversal of the rising trend observed since 2008 which has been particularly marked for a year and a half," the labour and employment ministry said in a statement.

However, the number of people out of work in France is expected to keep on growing this year and could even set new records. Unedic, the agency that monitors unemployment and sets levels of state pay-outs to the jobless, forecasts that the Category A unemployed will grow by 185,500 in 2013 compared with 294,500 in 2012. And Pôle Emploi, which responsible for paying unemployment benefits and overseeing job-hunting, plans a major upwards statistical correction which will be applied to the January jobless figures.

So despite the government's promise to instigate "a war on unemployment", the situation is hardly improving. Redundancies are being announced across the country, and Goodyear Dunlop Tires has just confirmed a report in Le Monde last week that it planned to close its factory in Amiens, northern France, which employs 1,250 people, by the end of 2014. All of which suggests that France, with over half a million people languishing without work for over three months, is on course to return to record jobless levels last seen 15 years ago.

French national statistics institute INSEE’s key economic outlook for the first half of 2013, published in December, predicted that France will remain on the edge of recession with zero growth, ever-rising unemployment, a collapse of purchasing power and consumption in tatters. Despite this, the government continues to target growth of 0.8%.

But the most disturbing forecast in INSEE’s regular outlook was the trend in the unemployment rate. The institute predicted that by next June unemployment may reach 10.9% of the active population, including French overseas territories, just three decimal points short of the highest jobless level ever recorded in recent French history, set in 1997.

'With zero growth there can be no miracle'

Economists say that to reverse rising unemployment would require annual growth of 1.5% to 2%, but government sources respond with irritation to suggestions that this casts doubt on the credibility of government policies. One person close to President François Hollande said it was tantamount to saying the government might as well head off to the beach and wait for the economic crisis to blow over.

"We have both feet hard on the brakes of this lorry going down a steep slope. You need a mix of two things: re-starting investment in Europe and also momentum in the French context on employment," he said.

This momentum would be generated by measures the government has put in place, he said. He referred to  a new assisted contract aimed at helping unqualified young people who are unable to break into the labour market, called 'contract for the future', and a ground-breaking deal signed by bosses' and trade union representatives on January 11th agreeing to reforms of France's labour laws in exchange for job security. The deal, likely to come before Parliament in March, should help companies through hard times by allowing them to introduce short-time working, this person said.

But economists contacted by Mediapart were more sceptical. The French economic observatory OFCE, which last autumn published its 2013 forecast entitled 'The Debacle of Austerity', believes the measures will not lead to nearly as many hirings as the government has predicted.

The OFCE examined the impact of the 'contract for the future', which covers only non-commercial undertakings, and 'inter-generational contracts' which apply to all young people in both public and private sectors. While the government expects 100,000 hirings from each type of assisted contract in 2013, the OFCE forecasts only 90,000 all told, of which 70,000 would come from 'contracts for the future' and 20,000 from 'inter-generational contracts'.

Mathieu Plane, senior economist in analysis and forecasting at the OFCE, says the measures are insufficient. Given the current "overdose" of austerity and zero growth, he said, "there will not be any improvement before 2014". 

For Jérome Gautié, economics professor at Paris University 1-Panthéon Sorbonne, subsidising the creation of temporary jobs will have little short-term benefit. "The 'contract for the future' may help because young people will have a way out of unemployment, but not the 'inter-generational contract'. There is very little demand from companies. Even if the government subsidises employment a little, that does not mean employers are going to hire," he said.

Nor does Gautié see much impact from a competitiveness pact announced last November that offers companies 20 billion euros in tax breaks, or the deal on labour flexibility and employment security. "They are not going to make much difference to the trend […] These measures can help companies but it will be difficult to reverse the momentum. That requires a more significant turnaround in the economic situation at a European level. With zero growth, there can be no miracle."

'Government's change, the methods stay the same'

Jacques Rigaudiat, an economist who was an adviser to former socialist Prime Ministers Michel Rocard and Lionel Jospin, says the present government's policy on employment is "absurd […] The pathetic agreement on employment and 'future' or 'intergenerational' jobs are not going to resolve unemployment."

Rigaudiat, who quit the fradical-left Parti de Gauche last June and is a founder-member of the Paris-based anti-neoliberal think-tank Fondation Copernic, says France needs "a truly pro-active employment policy like launching the energy transition, which would be a source of jobs and energy independence." He also said there could be no serious job creation without a cut in working hours. 

Views at France’s three main trade unions vary. The moderate CFDT says policies to date for reversing rising unemployment are generally positive. "The various measures go in the right direction. But I don’t have a crystal ball and I couldn’t say if they will allow us to reduce unemployment," said Patrick Pierron, the union’s negotiator on employment issues.

But Stéphane Lardy, his counterpart at the Force Ouvrière union, which refused to endorse the flexibility-for-security accord, says the deal will "facilitate redundancies and flexible working, not reduce unemployment". Assisted contracts, a method used by every government, will not be enough, he added. "We do not have any structural view of what an assisted contract could be."

At the CGT, Maurad Rabhi, the official in charge of employment questions, echoes these concerns. Government policy to bring down unemployment is "insufficient, not ambitious enough", he said. "You won’t boost employment with assisted contracts in the public and private sectors and a flexibility agreement in the middle of a crisis […] The government may have changed, but the methods are the same."

To add to the gloomy outlook, unemployment benefits may be squeezed after the Cour des Comptes, the French audit court, criticised employment policy in a report published on January 22nd and called for major changes in the way benefits are allocated. The next day Michel Sapin, Minister of Labour, Employment, Professional Training and Social Dialogue, said on RTL radio that it was "necessary to take measures on unemployment benefits". Employers and unions should "negotiate to find a reasonable and responsible solution", he said.

Lowering payouts to the unemployed is simply "unthinkable" for Force Ouvrière and the CGT. "This is a report written by accountants who would do well to go and visit a Pôle Emploi agency in 93 [Editor’s note: the département of Seine-Saint-Denis just outside Paris with long-term high unemployment]," said Force Ouvrière’s Lardy. "When the crisis and unemployment are on the rise, you do not cut benefits, it is anti-social, you condemn the unemployed to more poverty."

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English version: Sue Landau

(Editing by Graham Tearse)