From December 1, unemployment insurance compensation rules will be tightened “to move towards full employment” and “value work even more”, declared Gabriel Attal in an interview with La Tribune Sunday, this Sunday, May 26. The duration of compensation will be reduced to fifteen months “under current conditions” – if the unemployment rate remains below 9% -, for unemployed people aged under 57. And you will have to have worked eight months out of the last twenty months to be compensated. Currently, the rule is to have worked six months in the last twenty-four months.
Gabriel Attal also confirmed the addition of a new threshold to reduce the duration of compensation – which had already been reduced by 25% since February 2023 – even further if the unemployment rate falls below 6.5%. He did not specify by how much. The CGT had reported that this duration would be reduced in this case by an additional 15 percentage points, or 40%, which would bring it down to twelve months.
3.6 billion in savings
“To prepare for the economic rebound of 2025 that the forecasters are predicting, I would like the rules to be even more encouraging when growth picks up again and the unemployment rate decreases,” declared Gabriel Attal. According to the Ministry of Labor, the government expects 3.6 billion euros in savings from the reform and projects an increase in the number of people in employment “by 90,000”.
Gabriel Attal specified that the government would issue a decree on July 1 so that the reform “could come into force on December 1.”
“90,000 fewer unemployed”
But does reducing the duration of compensation really reduce the unemployment rate? Yes, according to several studies carried out in recent decades in OECD countries, which even estimate that extending this duration would have a disincentive effect on employment: “When the duration of compensation is increased from seven to fifteen months, the rate of return to employment decreases by 28% (i.e. an extension of the duration of unemployment of around two and a half months)”, noted in 2013 the economist Thomas Le Barbanchon, author of a study on this subject published by the Public Policy Institute. Several studies show, however, that while the measure can have a positive effect on the rate of return to employment, this is to the detriment of the quality of the work found.
The economists Bruno Amable and Baptiste Françon, who for example looked at the effect of the Hartz laws in Germany to reform the labor code, believe that “a reduction in the generosity of compensation should shorten the duration of periods of unemployment, but at the same time it should have a negative effect on the quality of the jobs taken up by forcing the unemployed to accept jobs that do not necessarily make the best use of their skills”, they indicated. in a study published in 2015. It is women aged 50 to 59 who are most penalized by these reforms, having to mainly turn to part-time work.
For his part, Damien Euzénat, who studied for INSEE the effect of the expiry of the rights of the unemployed on their job search concludes that “the job found after the end of rights is less well paid and more often short-lived than when it is found within a month and a half before”, beneficiaries being forced to more easily accept work “motivated by financial reasons”. In addition, dissatisfaction with the job found does not depend only on remuneration: “It is considered less interesting and more often exposes one to a situation of professional downgrading.”
It is also a job that we will tend to leave more quickly for another, with a more systematic use of fixed-term contracts or temporary assignments. If we reduce the duration of compensation, will we change the job search strategy of the unemployed? The answer is yes’ . But will we improve our well-being, our ability to find the right job at the right time? Nothing is less sure […] The objective of the reform is rather to make savings than to get closer to full employment,” said Bruno Coquet, an expert affiliated with the French Observatory of Economic Conditions, interviewed by AFP.
On the other hand, the reform could have consequences on the precariousness and poverty of the unemployed, by lowering their purchasing power: “Unemployment insurance aims to support the income of the unemployed. It is an instrument for maintaining the power of “purchase and economic stabilization in the event of a crisis. It is not an instrument for returning to employment.”, estimates economist Anne Eydoux on Franceinfo.
“A financial goal”
The unions did not fail to react to the executive’s announcements. “The objective is not the incentive, the return to employment, since there is no link with the fact of reducing rights to this point”, estimated Olivier Guivarch of the CFDT. For the negotiator of the first union, this “confirms that the objective was financial”. In government “they start from a sum that they must find and they look at what measures can produce this reduction in spending fairly quickly” at the risk of “forcing certain people to take poor quality jobs, short contracts , to have multiple jobs” to get by, he denounced.
Sunday May 26, the Prime Minister also confirmed the creation of a “senior employment bonus”. Thanks to this measure, “an unemployed senior who returns to a job that is less well paid than their previous job will be able to combine their new salary with their unemployment benefit” and “will thus regain their initial remuneration, for one year”, explained Gabriel Attal. The unions had reported that salaries would thus be compensated up to 3,000 euros.
He also wanted to create a “senior index” and study the creation of a “senior permanent contract”. The bonus-malus system on short contracts, criticized by employers and today limited to seven sectors of activity, will also be the subject of an examination on “the advisability of extending it according to the evaluation to be carried out.