In July 2002, France's new conservative government unveiled a new scheme to promote employment among unskilled young people, who have been particularly hard hit by unemployment. The new scheme is based on substantial financial incentives for employers to recruit young people under a new type of contract. Trade unions have criticised both the lack of consultation in drawing up the scheme and the absence of any training component .
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In July 2002, France's new conservative government unveiled a new scheme to promote employment among unskilled young people, who have been particularly hard hit by unemployment. The new scheme is based on substantial financial incentives for employers to recruit young people under a new type of contract. Trade unions have criticised both the lack of consultation in drawing up the scheme and the absence of any training component .
On 10 July 2002, François Fillon, the Minister of Social Affairs and Labour in the new conservative government, presented to the cabinet a bill designed to replace the previous Socialist-led government’s youth employment scheme (FR9709163F and FR0106162F). The new scheme, which has already passed its first reading in the Senate and is now before the National Assembly, provides for a new type of employment contract - the 'contrat-jeune en entreprise'- open to young people between the ages of 16 and 22, having left school without obtaining the baccalauréat (high-school diploma). The state will pay employers a fixed monthly sum of EUR 225 for each young person hired under the scheme at the SMIC national minimum wage, rising in stages to EUR 292.5 for employees with wages of 1.3 times the SMIC.
These new incentives for employing young people will be in addition to the measures reducing social security contributions for low-wage jobs implemented by previous governments. When taken together, these measures will completely eliminate employers' social security contributions for the first two years of employment under the new contract and reduce them by 50% in the third year. In some cases, specifically where start-up companies are concerned, employers could well receive more in state incentives than they save in social security charges. The new scheme provides for an open-ended employment contract with the number of hours to be worked per week left unspecified. Part-time jobs are therefore eligible, provided, however, that the number of hours to be worked per week is at least half that required by a full-time position. The scheme was initially to be limited to companies with a workforce of under 250, but it will now be extended to all businesses. The government’s aim is to have concluded 300,000 of the new contracts for young people by 2005, at a total cost of EUR 25 million in 2002 and EUR 650 million in 2005.
In France, the least skilled young people remain hardest hit by unemployment. Even the period of strong employment growth between 1997 and 2001 failed to trickle down to those without formal qualifications, whose unemployment rate was over 30%. Approximately 400,000 young people between the age of 16 and 22 leave school each year with less than baccalauréat-level qualifications. In March 2002, 245,000 of them were unemployed.
In spite of this situation, the government’s new scheme has been severely criticised by the majority of trade unions. They ask why, as vocational training is the key to employment, the government is not promoting work/training schemes, which combine employment and access to officially recognised qualifications? Until now, companies have preferred to hire young people with a good basic education on an employment and training contract basis. The new scheme does not include any obligation on employers to provide training. Indeed, Minister Fillon believes that the young people his scheme targets, having failed in the educational system, are neither willing nor able to move directly into training.
The government has proposed that experience gained by young people during the first three years of employment on the new contracts be validated and recognised. This proposal draws on a provision of the 'social modernisation' law put in place by the previous government (FR0201102F). However, the terms and conditions governing the validation have yet to be specified. They will be left to social dialogue and sector-level collective bargaining. Trade unions fear that access to training will, in practice, be denied to those that need it most.
Both the General Confederation of Labour-Force ouvrière (Confédération générale du travail-Force ouvrière, CGT-FO) and the General Confederation of Labour (Confédération générale du travail, CGT) have asked how the new scheme, with no training component, can guarantee that it will enable young people to break out of the cycle of low-paid, low-skilled and precarious 'Mcjobs', and not leave them without qualifications and vulnerable to redundancy at the first sign of economic problems for their employer. The French Democratic Confederation of Labour (Confédération française démocratique du travail, CFDT) has strongly criticised the lack of consultation on an issue that it believes should be dealt with through social dialogue. It has also states that an opportunity has been missed, since the government has not given itself any means of negotiating with employers on the content of jobs offered to young people in exchange for financial assistance from the state.
Eurofound recommends citing this publication in the following way.
Eurofound (2002), Government unveils new youth employment scheme, article.
