Unemployment insurance, season II: the Executive gives this Wednesday in the Council of Ministers the starting signal for a new reform aimed at responding to hiring difficulties by varying the compensation conditions of the unemployed according to the economic situation, an idea categorically rejected by the unions
The first social reform of the second five-year period, this bill paradoxically seeks at first to be able to extend the current rules of unemployment insurance. Coming from an already controversial reform of the first five years, they expire on October 31.
• Why a reform
It is about avoiding any legal loophole for the compensation of approximately 2.5 million job seekers and the application of the “bonus-malus” on the contributions of certain companies that make intensive use of short contracts.
More than the content of the text, which will be debated at the beginning of the return to parliament in October, it is the sequence that triggers what is debated. The government will approach the social partners with a request to negotiate a modulation of unemployment insurance so that it is, in the words of Emmanuel Macron, “tighter when there are too many vacancies, more generous when unemployment is high”.
It is then up to the unions and employers’ organizations to open negotiations or not agree on criteria -the unemployment rate, for example-, whose upward or downward evolution could determine the number of months of work necessary to access compensation (currently 6 months of last 24) or the duration of the indemnity.
The executive hammers, like the Minister of Labor Olivier Dussopt, that there is urgency because it is “unbearable to still be at an unemployment rate of 7.4% and at the same time have a unanimous response from business leaders on the difficulties of hiring “. . It makes this reform one of the conditions to reach the objective of full employment (unemployment around 5%) in 2027.
• How is compensation currently going?
Employees are insured against the risk of unemployment. But not all job seekers are compensated, far from it (some because they haven’t worked hard enough). According to Unédic data, there were 6.5 million people registered with Pôle emploi in December 2021, but only 2.6 million (40%) of them were compensated. The body that manages unemployment insurance forecasts that there will be 2.4 million by the end of 2022.
The average net amount of compensation is 960 euros for all recipients (1,070 euros for recipients who do not work and 720 euros for those who work and thus supplement their income). Beneficiaries consume an average of 68% of their rights.
With the latest reform, from October 1, 2021, the calculation of the reference daily salary (SJR), the basis of the unemployment benefit, is modified. It takes into account both the days worked and the days not worked during the 24 months prior to unemployment (with a floor that guarantees a minimum benefit). This penalizes job seekers who alternate unemployment and activity, the “permits”. Compensation was previously calculated by dividing earnings by days worked during the reference period.
To open rights it is also necessary, from December 1, to have worked six months (that is, 130 days worked or 910 hours) during the last 24 months (36 months for those over 53). Previously, you had to have worked for 4 months. For unemployed people under 57 years of age who have received a salary greater than 4,500 euros gross, a -30% reduction in benefits is applied from the 7th month.
• What could change
The executive wishes to modulate the conditions of unemployment insurance according to the situation of the labor market, as is done for example in Canada, but without copying this model at the regional level.
Olivier Dussopt seems to exclude the first parameter by observing that “the question of the level of compensation is not necessarily the correct one”. It is “rather the criteria for access to full compensation and the duration of full compensation that may be the key to the discussion,” he says.
The Medef is in favor of changing the compensation rules according to the economic situation, but the unions are all against the very principle of modulation. Regarding the criteria to modulate, “it must be simple, transparent, avoid crossing several indicators”, argues Marc Ferracci. He recommends “taking an indicator on which there is no debate, with a sufficiently frequent publication schedule”.
The ILO unemployment rate published by INSEE is, according to him, “a good candidate, because it is correlated with the effective duration of unemployment. When the economic situation deteriorates, the duration of unemployment lengthens”.
Source: BFM TV
