YES/ “Aid must be targeted at young people who are preparing a diploma, at most, of baccalaureate level”
By Bruno Coquet, doctor in economics and researcher at the OFCE.
While the debate will swell at the start of the school year on the control of public spending, the maquis of employment aid is in the sights of the government. In particular, learning which, boosted by financial incentives, absorbed nearly 20 billion euros in public spending in 2022! The problem is that around 40% of this envelope, or 8 billion euros last year, is spent in a profoundly ineffective manner due to the poor targeting of aid.
On paper, however, learning is an effective device. It makes it possible to alternate theoretical lessons and periods of work in a company, which promotes the integration into employment of young people who follow this path.
To understand this, these learning aids are divided into two stages:
– The first level of aid is accessible to all apprentices and all employers. The apprentice receives a minimum wage reduced to a fraction of the minimum wage – all the lower the younger he is and his seniority is low – to compensate for his reduced hours, his low productivity, and the time spent by the other employees of the company to supervise it. This salary benefits from general reductions in employer social security contributions, and the apprentice is exempt from employee contributions, CSG/CRDS, income tax, while acquiring the same rights as any employee: retirement, unemployment insurance, bonus activity… Finally, the cost of the lessons provided by the training center which hosts the apprentice is borne by public funds financed by the apprenticeship tax.
– The second stage of aids is targeted. Because if the beneficial effect of apprenticeship on professional integration is strong for young people who have left the school system without a diploma, it is attenuated when the level of education rises, so that access to employment of students in higher education is analogous through schooling or apprenticeship. To develop the latter where it is most effective, the State therefore adds a “unique aid” to the employer, targeted at young apprentices, with no or few qualifications, reserved for small companies which train these young people despite their reduced means. . For apprentices in higher education, there is no need for this aid since it has no effect on employment integration.
This articulation was clearly affirmed by the 2018 reform. But the “exceptional aid” created in mid-2020 as part of the recovery plan destroyed the coherence of this building: untargeted, open to all apprentices up to baccalaureate. +5 and to virtually all employers, calibrated to cover 100% of most apprentices’ wages. Never has employment assistance reached such a level. All practitioners know that such a degree of subsidy creates opportunistic behavior, particularly in market sectors, which inflates expenditure without gain in return.
And this is what happened: 540,000 apprenticeship jobs created since 2018, of which 80,000 due to the reform but above all, after 2020, 250,000 jobs depending solely on exceptional aid and 210,000 created in the form of apprenticeship contracts instead of other types of contracts that do not benefit from an equivalent subsidy. The increase mainly comes from higher education students, precisely those for whom specific aid is useless.
The exceptional aid bringing in its wake all the aid from the first stage, and the training costs, the inefficient expenditure would have absorbed 5.1 billion of the 15.7 billion euros devoted to learning in 2021, and still 8 billion out of the 19.9 billion spent in 2022. A waste of 13 billion in two years, because the young people concerned would have found work without difficulty and without public aid.
Changing the settings would not restore the consistency of the learning aids. We simply need to bring the amount and targeting of the second stage of aid to reason, which should be reserved for young people preparing for a diploma, at most, of baccalaureate level, over several years, in a small business, in accordance with the spirit of the 2018 law. Public expenditure will be reduced, including the France skills deficit, because this is mainly due to the number of apprentices and, secondarily only, the cost of teaching in a training center paid for by the public funds.
This rationalization of expenditure devoted to apprenticeship is a necessity, from the point of view of the effectiveness of this policy as well as the sound management of public funds.
NO/ “The non-employment of young people is much more expensive than two years of apprenticeship”
By Vincenzo Vinzi, CEO of Essec.
With one million apprentices in France, we can no longer endanger apprenticeship for funding issues. In view of its success, it must be sanctuarized so that apprentice training centers (CFA) can develop in a more serene way. The public authorities have every interest in increasing their support: this system allows young people to enter the labor market quickly and sustainably – and this for all apprentices, not just those from prestigious schools. Moreover, it is a means of effectively combating the expenses linked to the non-employment of young people, which costs much more than two years of apprenticeship.
Insofar as the financial responsibility for training by the skills operators (Opco) continues to decline, the CFA must compensate by increasing the remaining charge required of the company hosting the apprentice. If the recruitment aid is removed, many small and medium-sized enterprises will no longer be able to afford to recruit an apprentice. However, an Essec apprentice, or one coming from another school, can make the difference in a VSE or an SME. Learning must not become a luxury that only large groups can afford, but on the contrary a performance lever for this type of company. It is also a great instrument of diversity and inclusion. We could modulate the assumption of the cost of the contract according to the level of income of the students and their families, by charging a little more those who can, while promoting access to those whose resources are limited. It is about the social openness of higher education of excellence, and the future of many students.
In addition, companies risk turning only to the best-ranked establishments insofar as they would have to pay a high cost. However, learning must benefit all schools because there are talents everywhere. Work-study training makes it possible either to fulfill specific missions, or to be in a long trial period which then encourages the company to hire a collaborator whom it knows perfectly, who has become familiar with its operation and who presents the advantage of being immediately operational. For a company, training an apprentice is the best way to make a permanent recruitment, in particular on the trades in tension, provided that it is well accompanied.
The advantages for the apprentice are multiple: not having to bear tuition fees and benefiting in addition to a salary, or even discovering several trades if they know how to be curious. He will also build a professional network through the company’s employees, suppliers and customers. Examination success rates and professional integration rates are generally higher in France for apprentices than for non-apprentices.
The company, on the other hand, has the financial advantages linked to the apprenticeship contract and the vision of a talented young person, whose outside eye can be invaluable. Since the reform implemented in 2020, there has been a real enthusiasm, both on the student side and on the employer side. The figures bear witness to this, since we have gone from 491,000 to 980,000 apprentices in just three years. Above all, the image of learning has changed. It is now fully perceived for what it is, a high-level sector, and no longer suffers from the siding image that has stuck with it for a long time. Furthermore, learning inculcates several values: work, sharing and accountability.
In thirty years, I have never met an apprentice who regretted having chosen this device. However, a young person should not go backwards because it is a real investment and a mutual commitment between him and the company. I would advise him to discuss with other young people who have made this choice. You must have thought about your professional project and anticipate your search for a business by getting help from the specialists of the CFA. Apprenticeship is a dual path to excellence, both academically and professionally.