To reform unemployment insurance, the government wants to take inspiration from Canada


Benoit Tessier via Reuters The Minister of Labour, Full Employment and Integration, Olivier Dussopt and Prime Minister Élisabeth Borne, leaving the Élysée Palace on June 14, 2022.

Benoit Tessier via Reuters

UNEMPLOYMENT – Extend the reform by setting an objective: to turn all the rules, in particular those of compensation, towards the return to employment. The Minister of Labour, Olivier Dussopt, confirmed, in an interview with Parisian published this Tuesday, July 26, the first axes and lines of thought for the new unemployment insurance reform, announced by Emmanuel Macron during his July 14 interview.

This will be subject to consultation with the social partners “from the start of the school year”, after a first round of discussions on the governance of the scheme. The text must also be the first on Parliament’s menu when it returns from the summer break, from the beginning of October.

And before these discussions, the government already seems to have found inspiration abroad. “Our compensation rules must take into account the situation of the job market, as does, for example, Canada”, explains to the daily newspaper the former Minister of the Budget, who replaced Élisabeth Borne rue de Grenelle. “When things are going well, we tighten the rules and, when things are going badly, we relax them”, he adds, recalling that the first part of the reform, which tightened the conditions for compensation, expires on November 1, 2022 and that it must be extended.

Towards an evolutionary duration of compensation?

New rules subject to economic conditions and the dynamism of the job market, what does that mean? “This evaluation will pass either by criteria, such as a number of consecutive quarters with an improvement in employment, or by a committee which gives us an opinion. The terms have not been fixed”, slips Olivier Dussopt, while his ministry announced this Wednesday, July 27 a further drop in the number of unemployed registered with Pôle emploi between April and June (3,165,900 in category A, a decrease of 15, 1% over one year, and 5,436,100 for A, B and C, i.e. -8.9% over one year).

“The latest reform modified the daily reference wage and the period for recharging rights. Tracks can be opened, on the duration of compensation and its decreasing nature”, adds the Minister. In Canada, there is no degressivity in the amount of compensation linked to the unemployment rate. On the other hand, the number of hours worked necessary to open one’s rights and the duration of the compensation vary at the level of each province according to the health of the labor market.

The higher the unemployment rate, the more the number of hours worked required to open one’s rights decreases. In a region with an unemployment rate below 6%, you must have worked 700 hours to be eligible for unemployment compensation, compared to 525 if this rate is between 10.1 and 11%.

Duration of affiliation to open rights to compensation according to the regional unemployment rate
Unedic Duration of affiliation to open rights to compensation according to the regional unemployment rate

Unedic

In the same philosophy, the higher the unemployment rate, the longer the duration of compensation. “Thus, a person who has worked for 700 hours will be eligible for 14 weeks of compensation if they live in a region with an unemployment rate below 6%, while they will be eligible for 36 weeks of compensation in a region with an unemployment rate above 16%”, explains the Unédic study.

“In Canada, 40% of job seekers remain unemployed for less than a month, and only 7% are there for more than a year. In France, it’s the exact opposite!”, argues the Parisian Éric Chevée the vice-president of the Confederation of Small and Medium-Sized Enterprises (CPME), an employers’ organization which defends and pushes this idea to deal with the “recruitment tensions” reported by employers in many sectors.

“The labor market does not work like that”

A doctrine that is not shared by all economists and trade unions. Many of them warn of a model that cannot necessarily be transposed to the particularities of economic activity and the labor market in France, or even to the level of training of our job seekers. “The labor market does not work like that”, explained at the end of last week the number two of the CFDT, Marylise Léon, to our colleagues from the World.

“In the vast majority of cases, the labor problems of companies refer rather to shortages of skills, working conditions and remuneration and also to the fact that, unfortunately, many employers do not know how to recruit ”, she adds. The CGT fears for its part a reform synonymous with increased “pauperization” for the unemployed and establishing “reduced rights”.

Unions also point to the fact that the government has not yet assessed the impact of the measures coming into force from 2021 before “going further” on the reform of unemployment insurance. In addition, at the end of 2021, 30% of people registered with Pôle emploi were not compensated. The reduction in the duration of rights – when the unemployment rate drops – would therefore not encourage them any more to accept job offers.

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