Tuesday, December 27, 2011

Unemployment

The unemployment figures are terrible. For workers over 50, unemployment is up by more than 15%. For women and long-term unemployed, the number out of work has increased by 7% in each category. Meanwhile, the government, in response to the euro crisis, is promising more austerity, which can only make matters worse. Small businesses are calling for an extension of the temporary labor contract from 18 months to 36. In Germany, where the unemployment rate is only 6%, compared with 10+ in France, job-sharing through reduction of hours (Kurzarbeit) has helped to limit the damage from the crisis, or at least spread it around, but this has not been tried in France, where labor-market regulation is stricter. Perhaps it's time to think about some new remedies, and Kurzarbeit is one that can be tried without spending government money, which is off the table for now.

UPDATE: I spoke too soon. I see that Xavier Bertrand is proposing a French version of Kurzarbeit, called "activité partielle." He also wants more flexibility in work organization if necessary to maintain competitiveness.

1 comment:

Anonymous said...

The problem is that Kurzarbeit is very similar to the "35heures" scheme: shorter hours, shared work.
Xavier Bertrand called it "activité partielle" because it has been called until now "chômage partiel". It's been used a lot for the past 2 years so I doubt it'll be enough. Especially since 2012 promises to be brutal for France.
There should be some requirement to banks, as they refuse to loan money to business that try to expand or have more orders than they can produce without hiring; while this is a common complaint, it's very widespread: I know of two companies in my area that had orders and wanted to hire workers, they just needed something like $30-40,000 (which is very little in terms of business loans) and the bank said no. Not only didn't they hire anyone, but they put everyone in chomage partiel, and then they had to close. At the café, you hear "le monde marche sur la tête".