Savings, jobs: what the executive expects from the unemployment insurance reform

Posted Nov 21, 2022, 6:32 PM

Duration of compensation reduced by 25% from 1er February 2023, or even 40% if France achieves full employment – the cardinal objective of Emmanuel Macron’s second five-year term – but reduced to their current values ​​in the event of an economic downturn. With its unemployment insurance reform the details of which were presented this Monday morning to the social partners the government has taken a date: one of the two most structuring parameters for jobseekers with the amount of their allowance will be tightened or relaxed depending on the state of the labor market.

For the Minister of Labour, Olivier Dussopt, the application of this principle, known as “countercyclicality”, will further encourage the unemployed to return to work when employment abounds, as today, while remaining protective in times of low water. . “The reform should create between 100,000 and 150,000 additional jobs in 2023,” he said, recalling that the objective is to reduce recruitment difficulties.

green or red state

Concretely, two states of the labor market have been arrested: green or red. The passage into the red will be recorded when the unemployment rate within the meaning of the ILO exceeds 9% – average of the last twenty years – or increases by 0.8 percentage point from one quarter to the next. The return to green will be when the two indicators are below the thresholds, but three quarters in a row.

1er next February, we will be in a green period since the reference unemployment rate at this time will be that of the third quarter of 2022 (7.3%) . The duration of compensation for people who will lose their job from this date will then be reduced by a quarter by applying a coefficient of 0.75, without falling below six months and, until 31 December 2023 at this point.

This coefficient will apply regardless of age, including seniors, with a few exceptions: intermittent workers, dockers, fishermen, people licensed under a professional security contract or even in overseas territories in particular. If at the end of the rights, we went from green to red, then the unemployed person will recover the 25% of months planed. “The French unemployment insurance system remains among the most generous in Europe”, defended Olivier Dussopt, citing Germany and Italy where the conversion coefficient is 50%, or Spain (40 %).

“Simple, useful, readable”: Medef, CPME and U2P applauded, even if for the three employers’ organizations it is also necessary to act on training, housing or transport. “New attack against the precarious and the elderly”, “breaking the social contract”, “savings on the backs of the unemployed”: the unions, they did not mince their words.

Massive effect

Knowing that job seekers consume an average of 68% of their entitlements, ie approximately ten months, according to Unédic, all those who remain unemployed longer will be mechanically affected. Or 300,000 people in a full year, according to our information. The others also by behavior effect since, according to the government, the resumption of employment increases with the approach of the end of rights. All in all, the figure of 4 billion in full-year savings put forward by Olivier Dussopt (out of around 40 billion in Unédic expenditure) shows that the impact of the reform will be massive.

Countercyclicality has a bright future ahead of it. In early 2024, as part of the next negotiation of compensation rules, the social partners will be able to “consider” other more protective labor market states, the minister anticipated. But, he added, “we could also consider that if the objective of full employment is reached, that is to say an unemployment rate between 4.5% and 5%, the conversion rate could be hardened a second time. Some imagine that the correct coefficient would be 0.6. This is one of the tracks we have been working on. »

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