2023-08-07 15:35:19
Aiming to achieve full employment in 2027, the government has given a roadmap to the social partners in charge of the unemployment insurance system in France. The latter will be reformed, but the changes that the state is preparing to make do not meet with unanimous approval from the unions and workers’ defense organisations.
Indeed, the State intends to encourage a rapid recovery in employment by reducing the duration of unemployment benefit. This solution is not to the liking of the trade unions who propose, on the contrary, to make jobs more attractive instead of precipitating the unemployed into poorly adapted or precarious jobs, because of the reduction in compensation. It should be noted that unemployment insurance in France is a social insurance mechanism designed to protect workers in the event of involuntary loss of employment. It is administered by the National Interprofessional Union for Employment in Industry and Commerce (Unédic), a joint organization bringing together representatives of employers and employees.
The government wants to maintain the method of calculating unemployment compensation for 2019, which had sparked protests from unions and workers’ defense organizations. This method of calculation involved taking into consideration income received over a longer period (up to 24 months) instead of 12 months to determine unemployment benefit. The aim was to encourage job seekers to find work more quickly and to take account of more recent periods of activity to establish the amount of their benefit. However, this choice has been criticized for failing to take into account the particularities specific to different sectors of activity and the regional realities of the labor market.
Furthermore, the duration of compensation from February 1, 2023 will remain unchanged, despite the fact that it represents a reduction of 25% compared to the previous duration of compensation. Only periods of strong economic deterioration will allow it to be revalued. On the other hand, the modulation of the “bonus malus”, which influences the unemployment insurance contribution rate for companies in certain sectors, will be maintained. This measure aims to discourage the abuse of precarious contracts by companies, in order to promote job stability. However, it can have harmful consequences for certain companies, in particular those confronted with seasonal variations in activity or operating in sectors where short-term contracts are frequent, such as transport.
The consequences of the reform of the unemployment insurance system
The new provisions of the pension reform plan to take into account the extension of working time when compensating older workers. Currently, these workers over the age of 55 benefit from a longer period of compensation, which leads some companies to dismiss them rather than keep them in their jobs until their retirement. The roadmap suggests that Unédic should grant increased financial support to France Travail (the entity that will replace Pôle emploi). Currently, Unédic finances Pôle emploi up to 11% of its revenue, i.e. 44 billion euros in 2022. The aim is to increase this contribution to 12 or 13% by 2026.
However, from 2023, Unédic’s revenue should decrease each year in order to finance other employment-related initiatives, in particular apprenticeships. Despite this reduction, Unédic will have the obligation to continue to reduce its debt, aiming to halve it by the end of 2026. It is important to remember that this debt amounted to 60 billion euros. euros in 2022. Also, the reduction in the duration of benefits might encourage jobseekers to accept jobs which do not correspond to their professional aspirations or for which they have an excess (or a lack) of qualifications. This might not only lead to job dissatisfaction, but also contribute to a deterioration in the overall quality of work.
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