French unemployment falls

17 May 19

French unemployment has fallen to its lowest level in 10 years, suggesting that labour reforms may be showing signs of bearing fruit.

The national statistics agency, INSEE, said on Thursday that unemployment fell to 8.7% of the labour force, the lowest level since 2009.

However, while the figures offer some limited relief to President Emmanuel Macron, joblessness remains higher than in Germany and the UK, and above the 6.4% European Union average.

The latest unemployment figures showed that 963,000 unemployed people have been seeking a job for at least a year, with long-term unemployment (3.3% of the workforce) changing little on last year.

Macron made reducing the chronic high unemployment that France has endured for decades a key priority after taking office in May 2017 – when it was 9.4% – and has pledged to cut the rate to 7% by the end of his term in 2022.

Amid months of protests by the ‘gilets jaunes’ or yellow vests that have increased pressure on him to deliver improved living standards, the pro-business centrist president redoubled his efforts to reform the labour market in January.

His labour reforms aim to create more jobs, reward those in work, and target government spending by strengthening incentives for the low-paid to stay in jobs rather than receive unemployment benefits.

They include a €15bn (£13bn) five-year scheme to train the long-term and young unemployed, and efforts to make jobs more secure by discouraging the use of temporary contracts and investing in long-term positions.

The reforms also seek to respond to a severe skills shortage in France, with up 400,000 jobs going unfilled because of a lack of qualified applicants – an estimated 2 million unemployed people in the country have no qualifications.

Skills shortages are creating a growing problem as growth picks up, with the French economy expanding by 1.9% in 2018, the fastest pace since 2011.

In April, 14% of French manufacturers reported labour shortages which they said are now limiting production.

Although it is not clear the extent to which the ‘gilets jaunes’ protests – a broad anti-Macron and anti-establishment uprising marked by frequent marches – reflect opposition to Macron’s labour reforms, the unemployment rate is likely to become a key barometer of his presidency. 

  • Gavin O'Toole, expert on Latin America
    Gavin O'Toole

    A freelance journalist. He has written six books about Latin America and taught the politics of the region at Queen Mary, University of London.

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