Unemployment

Could this be the end of France's incredibly high unemployment benefit scheme?

By Adrienne Benassy
28/01/2013

The French have finally admitted that financing their unemployment benefit system has become unsustainable. “Better late than never” the Brits would say. They have been mocking high French government spending for years and they will not be surprised by the recent report published by the French National Audit Office, criticising that "France has the easiest rights of access to unemployment benefits compared to other European countries”.

The unemployment benefit scheme suffers from a huge deficit

First of all, the report highlights the huge deficit from which suffers the institution dealing with unemployment benefits in France. It expects a deficit of 5 billion euros in 2013, having already accumulated a debt of 13.7 billion since 2012.

Very expensive benefits within the entertainment industry

In France, artists, interpreters, musicians and technicians within the entertainment industry, who represent 3% of jobseekers in France, enjoy a very privileged benefits system. They usually work for very short periods of time (on film shoots for example) and then get special unemployment benefits the rest of the time. This system may be excellent to ease access to very unstable jobs; it is however very expensive for the whole unemployment benefit scheme. 

Benefits for the higher wages are too expensive.

French people are paid benefits as a function of their previous salary, and the higher their salary the higher their unemployment benefits will be. For example, employees earning 2,000 euros per month get 66.4% of their salary when they are unemployed while those who earn 4000 euros per month receive 68.3% of it. Benefits can go up to more than 6000 euros, an amount that the report criticises as far too expensive.

The system is too complicated and poorly coordinated.

Finally, the Court emphasised the complexity of the whole system, especially in terms of helping people getting back to work.