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Sun, 17 Nov 2019 12:25 GMT

France Cuts Unemployment Benefits as Macron’s Reforms Begin to Bite

Business

Dominique Vouillemin

Fri, 01 Nov 2019 15:24 GMT

Changes to France's jobs market are coming into force on Friday November 1st as part of President Emmanuel Macron's plan to make the labour market more flexible and to revitalise economic growth, according to AP.

New rules make it more difficult for the unemployed to claim benefits and are designed to encourage more people to return to work more quickly. The scheme’s critics argue that the measures deny jobless an important social safety-net.

While still one of the highest in the European Union, this summer France's unemployment rate dropped to 8.5%, its lowest level in a decade.

Stricter rules

The new rules increase the length of time people have to have worked to be entitled to unemployment benefits and reduce by 30% unemployment benefits for higher paid workers, whose salary had been over €4,500 ($5,000) a month, after six months of continuous unemployment.

French job seekers receive on average, over €1,000 ($1,115) per month for two years. Higher-paid workers can claim up to a maximum of €6,615 ($7,377) per month.

New Rights

People who resign from their jobs can now claim unemployment benefit if they had worked for at least five years for their former employer and if they are able to show that they have plans to start a business.

Self-employed workers will be able to claim benefits of €800 per months for up to six months.

Both categories of workers previously did not have access to any unemployment benefits.

Impact

While conceding that some of the changes were "tough”, the government said it hoped to encourage people to return to work as soon as possible or to consider starting their own businesses, according to AP.

The government expects the changes to save €3.4 billion ($3.8 billion) and to reduce unemployment over the next three years.

Trade and workers’ unions have denounced the plans as unfair and damaging to the social security system.

Pro-business policies

The changes build on Macron's early economic reforms making it easier to dismiss or take on new staff, which he pushed through parliament on arrival in office in 2017. At that time, the government reduced taxes for businesses in order to stimulate employment.

Last year, anti-government protests led by the yellow vested ‘Gilets-Jaunes’ movement erupted, against perceived social injustices in the country, and economic policies seen as favouring the rich, but the unrest subsided this summer.

Macron's next target is France's complicated pensions system. His government is planning to lower pension rates, and raise the age of retirement, in a formal proposal to be unveiled next year. The move has already prompted strikes and street protests.


Europe