Unemployment insurance: the end of the illusion by Sabina Issehnane

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The bill presented by the Minister of Labor, Olivier Dussopt, seems, at first glance, to essentially extend the existing rules on unemployment insurance. However, on reading the opinion of the Council of State, the latter “observe […] that the government’s plan is not limited to empowering the regulatory power to extend identically the provisions of the deficiency decree in force […]. The bill does not in fact contain any direct or indirect limitation as to the object or the scope of the provisions of the future decree”.

The media interventions of the minister and the rapporteur, Marc Ferracci, as well as the press kit relating to the bill, leave no doubt about the government’s intentionswhile maintaining the illusion of a semblance of social democracy, by imposing a new unemployment insurance reform by decree.

It is “make these rules more responsive to economic conditions and changes in the labor market”. In other words, to tighten them according to the economic situation. Nothing is yet clarified on the indicator used to evaluate a “improvement of the labor market”nor on the rules of compensation which will be modulated.

According to the Minister, the amount of the allowance received will not be changed, but the duration of compensation or the rules of eligibility could be modulated, in increasing the minimum duration in order to open a right (already increased from 4 to 6 months on 1er December 2021) or in extending the reference period used to calculate the allowance (now from 24 to 36 months since 1er October 2021).

The government deliberately forgets that the proportion of job seekers receiving compensation is already very low, around 38%.

Given the new salary calculation reference day, the tightening of the eligibility criteria risks penalizing even more those who have experienced periods of non-work. Introducing a modulation based on countercyclicality means forgetting that unemployment insurance is by nature countercyclical, playing its role of automatic stabilizer during periods of recession, by supporting more unemployed workers on benefits.

Arguing about a desire to encourage the unemployed to return to work by reducing the rights of those receiving benefits is to deliberately forget that the share of job seekers receiving benefits is already very low, around 38% (1) . Claiming to encourage these recipients to return to work is to forget the fact that nearly half of the recipients are already working each month, at the cost of a reduction or suspension of their compensation.

This reform is not only aimed at the unemployed, whose poverty rate is already close to 39% (2), it also seeks to put downward pressure on wages. Without unemployment compensation, employees’ room for negotiation will be reduced. This is to stifle any desire for wage demands. Therefore, this government artifice urgently calls for a large-scale social mobilization. The rights and dignity of the unemployed are at stake.

Sabina Issehnane is a member of the Atterred Economists.

(1) Sources: Pôle emploi, National file of beneficiaries, May 2022.

(2) Insee, DGFIP, Cnaf, Cnav, CCMSA, “Tax and social income survey”, 2019.

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