“We will not touch” the amount of the allowance, assures the rapporteur

The 2019 unemployment insurance reform had angered the social partners. And its entry into application, disrupted by the Covid crisis, had been postponed until the end of 2021. Faced with tensions on the labor market, the government has nevertheless decided to push the reformist cursor even further.

Read also: The latest measures of the Unemployment Insurance reform come into force

Update with Renaissance MP Marc Ferracci, rapporteur on the unemployment insurance bill.

Why consider a new reform of unemployment insurance, even though the previous one, which came into force at the end of 2021, had already tightened the rules?

In the text that arrives in Parliament, there is the possibility given to the government to continue to act by decree. He has already said that he has, in this way, two ambitions: to extend the current rules until the end of 2023 at the latest and then to introduce the famous modulation of the rules according to the situation of the labor market.

Why a new reform? The two do not have the same purpose. That of 2019 was intended to fight against short contracts, which are extremely expensive for unemployment insurance. The shortfall in fixed-term and temporary contracts, that is to say the difference between the contributions deducted from these contracts and the unemployment compensation paid to people, is around 9 billion euros per year. There was a budgetary subject but also precariousness.

The coming reform aims to take into account the serious recruitment difficulties that companies encounter. Faced with this finding, unemployment insurance plays a role, but is not the only explanatory factor. The reform planned by the government is an element of a more global strategy, in which we find the reform of the vocational high school, the improvement of the public employment service with France travail…

Far be it from me to say that unemployment insurance reform is the solution to everything. Nevertheless, everything indicates that the rules of compensation have an effect on employment and on the return to work. When you play on the duration of benefits, for example, people adapt their job search behavior to the date of their end of benefits.

The government plans to adjust the rules according to the health of the labor market. What would be the criteria?

There are many possibilities. I am rather in favor of taking something simple, transparent and fairly stable from the point of view of the methodological construction of the indicator: it is the unemployment rate in the sense of the ILO. This is something that is not disputed, it goes under the caudine forks of international standards. The Ministry of Labor is also evaluating other avenues. This may be job creations or the variation in the unemployment rate… These things will be discussed with the social partners in the coming days.

What are the rules that would be modulated? Will it be a question of providing for a degressiveness of the amount of the allowance like that which already exists for the highest salaries or of reducing the duration of the rights?

There are three potential candidates. First of all, the duration of compensation – it is increased when the situation is bad, it is reduced when it is better. Second, the eligibility threshold to open rights (or reload for those who are already registered). It is now six months out of the last twenty-four months. Then there is the amount of the allowance. This last criterion was rejected by the Ministry of Labour. We won’t touch it. The reflection is organized rather through the parameters of duration, whether it is the duration of compensation or that to be eligible.

Read also: Tensions in the labor market at record levels, here are the solutions considered

In a recent interview with Sunday newspaper, you hinted that this might apply to people who have ongoing rights. What about?

What I mentioned was a legal possibility, specifying that safeguards could be put in place. But that’s not necessarily my recommendation. Given the speed at which the flow of job seekers is renewed, I do not think it is necessary to do this on people who are in the process of compensation.

People are more active in their job search when the end of rights is approaching

—Marc Ferracci

Should the rules be modulated according to the territories? Will an unemployed person from a region like Brittany, close to full employment, be compensated for less time than an unemployed person from Hauts de France, where the unemployment rate is higher?

It is under study. But within each region, the unemployment rates are not homogeneous. If you want to go to the end of the logic, you need the finest mesh possible. It is impossible to implement.

The fairly natural consequence of this is potentially a breach of equality that can emerge between job seekers on either side of a region. I note that the rules have never been territorialized, with the exception of the very specific case of Mayotte. It is not without reason.

But if you choose your indicator well to modulate the rules, you observe upward or downward dynamics which generally affect all territories. There may be some exceptions, but in general, when unemployment goes up or down, it plays out pretty much the same way everywhere.

There are still discussions on these topics. But I rather see arguments against the territorialization of unemployment insurance rules.

By accepting the first job that comes along, is there not a risk for an unemployed person of devaluing his skills and diplomas?

This is indeed a point on which we must be very vigilant. Academic studies have sought to answer this question: did the reduction in the duration of compensation lead to a deterioration in the quality of the jobs that people took up again? This is a hypothesis that must be carefully considered. Some studies, but based mainly on American data, show such an effect. In France, where the duration of compensation is longer (twenty-four months maximum against around six months in the United States), the studies do not find a significant effect. This does not mean that the debate is closed. The issue is important. But let’s say that in France, the durations are long enough to allow a relatively efficient job search.

In September 2021, according to data from Pôle emploi, half of the unemployed receiving benefits received, for a full month, less than €1,100 gross. Under these conditions, and beyond the social and psychological impact of periods of unemployment, can we really consider that a job seeker prefers to stay at home rather than work?

This is an open question. We can answer it with a subjective feeling, which is to say that €1,100 gross encourages people to go to work. But you have to bear in mind that the unemployment benefit can be combined with other aid and that the real income of households is not necessarily at the level of this median.

When we look at the proportion of people who find a job, we see that this rate increases near the end of entitlements. This means that people are more active in their job search when the end of rights is approaching. And that, when this end of rights is further away, they make other choices. Are these choices driven by being more selective? Or is their research not very active? We don’t know how to say it. But the fact is that the end date of rights affects people’s behavior. For at least some job seekers, there is room for manoeuvre.

For a part… What to do for the public furthest from employment which, to put it bluntly, employers simply do not want?

Indeed, there are people who do not meet the requirements of the labor market. Even when they are approaching the end of rights, they have neither the skills nor the ability to seek employment. To these people, we must offer something other than an incentive to return to work through, for example, a shorter duration of compensation. It’s very important, that’s why the strategy can only be global. If we stuck to unemployment insurance reform, we would not be effective enough but we would also probably be unfair.

The reform of unemployment insurance will in no way eliminate the necessary efforts that businesses and professional sectors must make to make jobs more attractive.

—Marc Ferracci

How can supply and demand better meet?

It is a question of finding how to encourage people to take jobs for which they are competent and which are available in their employment pool. But this also raises the question of the effectiveness of the public employment service. Businesses need to be helped to recruit, especially small businesses.

They often find it difficult to offer offers that are consistent with the expectations of employees and job seekers. Sometimes it’s offers that are too poorly paid, sometimes it’s schedules that don’t satisfy anyone. And they can take time to realize that they have miscalibrated their offers. So we have to help job seekers to find employers, but we also have to help employers to find candidates and employees.

Marc Ferracci, Renaissance deputy, rapporteur on the unemployment insurance bill. | NATIONAL ASSEMBLY

By pushing job seekers to accept any job, aren’t you afraid of preventing employers from questioning salaries, working conditions and also their selection criteria?

I think you have to press all the levers at the same time. Companies will need to make efforts on wages, working conditions and working hours. We will, I hope, improve things with the reform of unemployment insurance. But this will in no way eliminate the necessary efforts that companies and professional sectors must make to make jobs more attractive.

The objective set by the Prime Minister is to increase to 100,000 VAE routes per year.

—Marc Ferracci

The bill also plans to act on the Validation of Acquired Experience (VAE). What are the issues ?

Today we are between 30,000 and 40,000 VAE routes per year and the objective set by the Prime Minister is to increase to 100,000. We will also need budgetary measures to strengthen support for people who engage in a course of VAE. But what the bill does at this stage is that it simplifies the pathways, it allows caregivers to embark on a VAE pathway based on this family experience. The medico-social sector has such needs that skills must be sought wherever they are.

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