{"id":14929,"title":"French Elections Round-Up Part Two: Employment and Social Policy","link":"https:\/\/bst-europe.eu\/de\/globalization\/french-elections-round-up-part-two-employment-and-social-policy\/","date":"19. April 2017","date_unix":1492609466,"date_modified_unix":1584529518,"date_iso":"2017-04-19T13:44:26+00:00","content":"
\"Jos\u00e9<\/a>
Jos\u00e9 Mart\u00edn @ unsplash.com<\/figcaption><\/figure>\n

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Socio-economic issues will be of central concern when the French elect a new president on April 23rd and May 7th. In a mini-series, the GED project will present to you not only the most pressing issues at stake, but also the corresponding solutions each of the five main candidates proposes. In this second take, we will take a closer look at a topic at the core of voter\u2019s interest in these elections: France\u2019s employment and social policy. For an in-depth analysis, also take a look at our recently published Focus Paper<\/a>.\u00a0 <\/em><\/p>\n

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Missed part one or want to skip ahead? You can click here<\/span> <\/a>or here<\/a><\/span> to go directly to part one or three of this mini-series.<\/em><\/p>\n

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With overall unemployment rates stagnating at 10 percent and youth employment remaining high at almost 25 percent, it is no surprise that according to the recent Eurobarometer, 49\u00a0percent of the French people name unemployment as their biggest concern at national level, followed by terrorism in 2nd (31%) and immigration in 3rd place (19%). Accordingly, issues related to employment and social policy as well as inequality are at the centre of concern during this year\u2019s presidential elections. Let\u2019s take a look at where France currently stands and what each of the candidates proposes.<\/p>\n

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Employment Policy<\/strong><\/p>\n

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Employment is generally a hotly debated issue in France and therefore also a core issue in the presidential elections. With the country\u2019s unemployment rate on the rise since the financial crisis hit Europe in 2008, a central promise of Fran\u00e7ois Hollande\u2019s 2012 campaign was to boost job opportunities. However, unemployment rates remained high, which put Mr. Hollande under immense pressure to deliver upon his campaign promises. Since 2012, unemployment in France has been stagnating at around or even slightly above 10\u00a0percent. According to the OECD, 44\u00a0percent of the unemployed have been jobless for more than 12 months, which suggests high structural unemployment.<\/p>\n

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\"Focus_Frankreich_07lay2\"<\/a><\/p>\n

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Another issue is that France\u2019s share of temporary employment is relatively high compared to other OECD members. This points out a critical duality in the French labour market: Even though about 85\u00a0percent of employment contracts are of a permanent nature (French: contrat \u00e0 dur\u00e9e ind\u00e9termin\u00e9e, CDI), about 87\u00a0percent of new hiring is based on temporary contracts (French: contrat \u00e0 dur\u00e9e d\u00e9termin\u00e9e, CDD), sometimes lasting as short as only a month. Whereas one side of the French labor market is hence characterised by highly regulated and protected jobs, another part is marked by insecurity, precarity and limited labour protection.<\/p>\n

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Young people, immigrants and the low-skilled are the most vulnerable groups on the French labour market. The high youth unemployment rate of 24.6\u00a0percent represents a particular challenge. Both, overall unemployment as well as youth unemployment in France, are the 6th highest in the whole OECD. The OECD therefore emphasises the necessity of undertaking structural reforms to put the country back on track.<\/p>\n

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Several labour market reforms have been successfully introduced by the Hollande administration. However, the Sustainable Governance Indicators of the Bertelsmann Stiftung underline that, even though French economic and labour market reforms are moving in the right direction, they do so without consistency. Concluded in 2013, an agreement with social partners aimed at introducing more flexibility into the labour market and improving health services. The Loi Macron and the Loi Rebsamen, both introduced in 2015, aimed at lowering bureaucratic and procedural barriers. The Loi El Khomri was put into law in summer 2016 after facing extensive protests and controversial debates. Whereas the original draft aimed at loosening up the 35-hour week, the final law does not touch upon this issue, but aims at introducing more flexibility into employment relations in general. The original bill was adjusted several times, and faced strong opposition by trade unions and employees, students but also by members of the governing party, the Parti socialiste. Mass rallies culminated in the \u201cnuit debout\u201d, a regular assembly of protesters in Paris.<\/p>\n

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Whereas the left criticises the reforms as putting workers\u2019 rights at risk, conservatives think the changes still do not go far enough. The divisive potential of such reforms is underlined by an Ipsos survey: Whereas 51\u00a0percent of French people think that more flexibility should be introduced into the labour market, 43\u00a0percent prefer to strengthen employment protection. Whereas voices backing further flexibility are especially strong within the conservatives\u2019 camp (80%) and among older French people (63%), far-left voters (84%) as well as the under-35-years-old (53%) are favourable towards stronger protection systems. These dividing lines can also be seen starkly in the different election manifestos of the presidential candidates. Yet, generally the French seem to think that something must change: Only 6\u00a0percent state that nothing should change in the current labour market situation.<\/p>\n

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Social Policy<\/strong><\/p>\n

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Public awareness of inequality levels in France is rising: The Ipsos survey shows that a large majority (85%) thinks that inequality has risen during the last few years, more than half (54%) even think it has risen sharply. Only 7\u00a0percent say inequality has decreased. This trend is present throughout all political camps, but particularly strong among far-left voters (93%). In particular, the gap between rich and poor is perceived by 82\u00a0percent of the French to have increased. As for intergenerational inequality, the authors of the Social Justice Index (SJI) of the Bertelsmann Stiftung note that several indicators reveal a gap between young and old in France. The SJI finds that French poverty prevention works generally well, but is better for elderly people than for younger ones. This applies similarly to the risk of material deprivation and income poverty. France scores slightly above average on intergenerational justice and slightly below the EU average on matters of child and youth opportunity.<\/p>\n

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As regards wages, income inequality in France is slightly below the OECD average. After a period of high wage growth between 2008 and 2010 as well as a year of wage moderation in 2011, wages are growing again in France at the average pace of the OECD area. French labour productivity is basically equal to German labour productivity, so there is no need for competitive wage adjustments (\u201cinternal devaluation\u201d) as in Spain or Greece. Disposable income stagnated during the financial crisis, so France has circumvented basic income losses such as witnessed in Greece, Italy, Portugal or Spain.<\/p>\n

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French relative income poverty rates remain below the OECD average. One potential factor to explain this relatively stable performance is the well-funded social protection system in France: At 32\u00a0percent of French GDP, the total of social expenditures is the highest within the OECD. By international and European standards, the French welfare state is generous and provides substantial benefits. Generous support is provided for child care and parental-leave benefits; in general, women\u2019s labour-force participation is high. Even though France performs generally well on quality of education, it has one of the largest deficits concerning the link between social background and learning success. Equal access to education is an issue, in particular for working-class and immigrant students. France has a high quality health care system, which is accessible to all residents but generates regular deficits. The overall sustainability of the French welfare state has been improved by pension reforms.<\/p>\n

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Solutions Proposed by the Candidates<\/strong><\/p>\n

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Jean-Luc M\u00e9lenchon<\/strong><\/p>\n

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M\u00e9lenchon, the most left-leaning candidate to this year\u2019s elections, intends to rescind the reforms implemented under Hollande\u2019s presidency, especially the Loi El Khomri which he views as an \u201copen door to internal dumping (\u2026) and the regression of all workers\u2019 rights\u201d. But the candidate of La France insoumise (unsubmissive France) does not contend himself with retracting the reforms of a previous government \u2013 he has his own ambitious agenda: To cut unemployment, he calls for a massive public investment plan worth \u20ac100 billion and to reduce working time to 32 hours per week.<\/p>\n

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He also intends to raise salaries for workers and to introduce a salary cap of \u20ac400,000. For salaries above this threshold, he proposes to introduce a 100\u00a0percent tax rate. In order to reduce youth unemployment specifically, he advocates a special contract that would allow young people to work in the public or nonprofit sector and acquire qualifications\/skills that would improve access to the regular labour market. He also proposes to lower the pension age to 60 while raising the minimum pension to the level of the minimum salary, a measure that is aimed both at reducing unemployment and raising pensioners\u2019 living standards.<\/p>\n

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Beno\u00eet Hamon<\/strong><\/p>\n

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The candidate of the Parti socialiste, Beno\u00eet Hamon, plans to replace the Loi El Khomri with a new labour law. This law shall encourage the reduction of working hours on a voluntary basis and improve working conditions. The social economy sector would be enlarged from 10\u00a0percent now up to 20\u00a0percent of French GDP by 2025. Hamon intends to increase the minimum wage as well as basic benefits.<\/p>\n

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An issue getting widespread attention during the election campaign is his (several times adjusted and\/or modified) idea of a basic income (Revenue universelle d\u2019existence, RUE or UBI in English). He proposes that everyone between 18 and retirement age who earns less than 1.9-times the minimum wage (that is a gross income of \u20ac2,812), would be eligible to receive the basic income. Unlike with current unemployment benefits, eligibility is unconditional.<\/p>\n

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Hamon states the RUE would amount to \u20ac600. Yet, as it would be individually calculated depending on other personal revenues, including wages and social benefits (e.g. family, housing, unemployment benefits), not everyone would receive the same amount. According to Hamon\u2019s campaign, 19\u00a0million French, i.e. 30\u00a0percent of the population, would be eligible, at an estimated cost of \u20ac35 billion. To finance his plans, Hamon inter alia proposes to reduce corporate tax credits in order to generate \u20ac15\u201320 billion. He also proposes the idea of a tax on robots to generate \u20ac5\u201310 billion, a \u201csuperprofit tax\u201d for banks and an increase in public debt by \u20ac5\u201310 billion.<\/p>\n

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Emmanuel Macron<\/strong><\/p>\n

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The programme of Emmanuel Macron, the head and founder of the En Marche! movement, does not touch the 35-hour work week and proposes that, where possible, collective negotiations shall be decentralised and take place at firm-level. The conclusion of firm-level agreements is prioritised to the conclusion of agreements covering the whole sector. Social charges shall be reduced in order to push purchasing power.<\/p>\n

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Macron plans to introduce a universal unemployment insurance, also covering those who quit their job upon their own wish. But Macron links this universal coverage to the condition that the recipient actively engages in searching for a new job; if two job offers fitting the individual\u2019s qualifications are refused or if the individual\u2019s job search lacks commitment, he\/she may lose the right to receive unemployment aid. Additionally, as part of the investment plan, Macron wants to invest greatly in further education and skills training. He further proposes a universal pension system, replacing the separate systems currently in place in France. Macron intends to adhere to the retirement age of 62, but also proposes that those who want to work beyond that shall have the opportunity to do so.<\/p>\n

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Fran\u00e7ois Fillon<\/strong><\/p>\n

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Liberalising the labour market is a high priority for Fillon, the candidate of les R\u00e9publicains. He sees this as a key measure to improve France\u2019s competitiveness. One of his central propositions is to abolish the 35-hour working week and let social partners set working time at company level. As for the public sector, Fillon intends to introduce a 39-hour working week.<\/p>\n

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In tackling high youth unemployment, Fillon wants to create a better system of apprenticeships and alternating in-company training that would facilitate better integration into the labour market. Fillon\u2019s manifesto sets out the intention to reduce unemployment not only via better conditions for job creation but also stronger activation of unemployed persons. This is supposed to take place by introducing a reduction of unemployment benefits should the recipient reject a job offer.<\/p>\n

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Marine Le Pen<\/strong><\/p>\n

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Marine Le Pen, the far-right candidate of the Front National, has harshly criticised the labour market reforms under Hollande\u2019s presidency and would scrap the Loi El Khomri. While keeping the 35-hour working week as a general rule, she would allow certain branches to negotiate 37 or 39 working hours a week which would have to be fully paid. She also wants to set the entry to retirement at 60 years or after 40 years of contribution payments. Le Pen further proposes to introduce a \u201cnational employment priority\u201d, by which she would introduce \u201ca tax on every new contract with a foreign employee\u201d \u2013 which would be incompatible with the EU rules governing the Single Market. Her main strategy against high unemployment is a re-industrialisation policy further underpinned by protectionist measures. In addition, she intends to privilege French companies for all public procurement.<\/p>\n

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Missed part one or want to skip ahead? You can click here<\/span> <\/a>or here<\/a><\/span> to go directly to part one or three of this mini-series.<\/em><\/p>\n

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Selection of Sources:<\/strong><\/em><\/p>\n

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Bertelsmann Stiftung (ed.). Social Justice Index. G\u00fctersloh 2016.<\/p>\n

Bertelsmann Stiftung (ed.). Sustainable Governance Indicators, Country Report France. G\u00fctersloh 2016.<\/p>\n

European Commission. Eurobarometer 86. Brussels 2016.<\/p>\n

Eurostat. Eurostat Dissemination Database. Luxemburg 20.03.2017.<\/p>\n

Geoffroy, R., and A.-A. Durand. Qui b\u00e9n\u00e9ficierait du revenu universel de Beno\u00eet Hamon? Le Monde 15.03.2017.<\/p>\n

LOI n\u00b0 2015-990 du 6 ao\u00fbt 2015 pour la croissance, l\u2018activit\u00e9 et l\u2018\u00e9galit\u00e9 des chances \u00e9conomiques.<\/p>\n

LOI n\u00b0 2015-994 du 17 ao\u00fbt 2015 relative au dialogue social et \u00e0 l\u2018emploi.<\/p>\n

LOI n\u00b0 2016-1088 du 8 ao\u00fbt 2016 relative au travail, \u00e0 la modernisation du dialogue social et \u00e0 la s\u00e9curisation des parcours professionnels.<\/p>\n

OECD. OECD Data. Paris 2017.<\/p>\n

OECD. Employment Outlook 2016: How Does France Compare? Paris 2016.<\/p>\n

OECD. Society at a Glance: Equity Indicators, Social Spending. Paris 2016.<\/p>\n

Poingt, G. Beno\u00eet Hamon \u201egauchise\u201c son programme \u00e9conomique. Le Figaro 16.03.2017.<\/p>\n

Rabreau, M. En France, 70% des embauches sont des CDD… de moins d’un mois. Le Figaro. 12.04.2016.<\/p>\n

Piketty, T. Of productivity in France and in Germany. Le blog de Thomas Piketty. Le Monde 09.01.2017.<\/p>\n

Teinturier, B., and Dusseaux, V. Les Fran\u00e7ais, l\u2019\u00e9conomie et la r\u00e9forme de l\u2019Etat. Ipsos Public Affairs. Paris 2016.<\/p>\n

 <\/p>\n

 <\/p>\n","excerpt":"

In this mini-series, the GED project will present to you not only the most pressing issues at stake in France’s, but also the corresponding solutions each of the five main candidates proposes. In this second take, we will take a closer look at the core of french voters‘ interest: France\u2019s employment and social policy.<\/p>\n","thumbnail":"https:\/\/bst-europe.eu\/wp-content\/uploads\/sites\/24\/2017\/04\/jose-martin-651-scaled.jpg","thumbnailsquare":"https:\/\/bst-europe.eu\/wp-content\/uploads\/sites\/24\/2017\/04\/jose-martin-651-scaled.jpg","authors":[{"id":13882,"name":"Sylvia Schmidt","link":"https:\/\/bst-europe.eu\/de\/blogger\/sylvia-schmidt\/"},{"id":6108,"name":"Christian Bluth","link":"https:\/\/bst-europe.eu\/de\/blogger\/christian-bluth\/"}],"categories":[{"id":152,"name":"Globalization","link":"https:\/\/bst-europe.eu\/category\/globalization\/"}],"tags":[]}