That is the third a part of an FT sequence analysing how the Covid-19 pandemic has transformed the labour market and adjusted the way in which thousands and thousands of individuals take into consideration work
Aubérie Zaro left her Paris-based Large 4 consultancy job in January decided to take a while off to ponder what she actually “needed to do”. After a nine-month pause from the job market, the 30-year-old began searching for a brand new place. A lot to her shock, she discovered one which matched her objectives inside a month.
“I assumed with the pandemic all hiring is perhaps frozen, nevertheless it was actually quick,” she mentioned.
Zaro’s swift and profitable job search is one which 1000’s of French staff have skilled in current months. As in most developed nations, they’ve benefited from beneficiant government support for businesses and a sharp economic recovery, which have helped deliver the unemployment charge — these out of labor however actively looking for jobs — again to pre-pandemic ranges of Eight per cent.
However not like the UK and US, the place file numbers of individuals have left the labour force, France and another EU nations have additionally averted the development often called the “Large Stop”: the proportion of French working-age folks employed or looking for work has risen to 74 per cent, a file excessive.
Such traits have raised hopes that the post-pandemic financial increase may mark a step-change for nations resembling France which have lengthy suffered excessive ranges of structural unemployment.
“Maybe the circumstances have lastly been met to cut back the unemployment charge,” mentioned Stefano Scarpetta, director of employment, labour and social affairs on the OECD. “The pick-up within the French economic system has been stronger than I anticipated.”
Direct state assist to firms and their workers through the pandemic partly explains why staff in France and a few European nations — such because the Netherlands, Norway and Sweden — are both rejoining the labour pressure or leaving it in decrease numbers than in different developed economies.
As a part of France’s €100bn Plan de Relance, or Restoration Plan, 1000’s of firms acquired monetary help to assist them retain present workers and, in some instances, rent extra folks. In contrast, the US supported staff’ earnings by offering additional advantages on to them.
This method of help has enabled Nicolas Sordet, head of Lyon-based chemical compounds start-up Afyren, so as to add 45 new workers. The €7m it was promised from the state was a “catalyst” to spend money on the event of a brand new manufacturing unit in northern France that may produce fertilisers from agricultural waste, he mentioned.
Reforms predating the pandemic by over a decade — and continued by President Emmanuel Macron — additionally performed a task. Measures resembling a €10bn reduction in business taxes and decrease firing prices have made it extra interesting for companies to rent workers, economists say.
Macron insurance policies that focused the younger additionally had an influence, together with a scheme that gave monetary incentives to companies to rent apprentices. Amongst 15-24-year-olds, employment is now at its highest stage since 2003, when data started — though in absolute phrases it stays low, at 33 per cent.
Macron, who early in his premiership pledged to slash France’s unemployment charge to 7 per cent from 9.5 per cent, used a nationwide tackle this month to justify his Quoi qu’il en coûte, or “No matter it takes”, pandemic technique, arguing this made it attainable “not solely to withstand the disaster however to bounce again extra strongly”.
However economists are divided on how a lot credit score Macron can take for the labour market’s restoration, and considerations persist about its underlying well being.
France’s unemployment — 8.1 per cent within the third quarter — continues to be a lot increased than within the UK — 4.Three per cent for a similar interval — or Germany — 3.Four per cent. French firms additionally report they’ve problem discovering workers — though this can be a longstanding structural subject that predates the pandemic.
Philippe Martin, professor of economics and deputy chair of the French Financial Evaluation Council, mentioned: “Amongst folks aged 25 to 55, the employment charge in France may be very commonplace and corresponding to different nations. The place France is doing very badly is for younger folks and for outdated folks, and that’s a comparatively structural drawback, which is right here to remain.”
Employment amongst older staff has improved in recent times. But though round two-thirds of 50 to 64-year-olds are in work — up by round 10 proportion factors in contrast with a decade in the past — France nonetheless has one of many youngest efficient retirement ages on this planet, at a mean age of 60.8.
FT Collection: The place did all the employees go?
Options on this series embrace:
Half 1 How decreased migration and early retirement have shrunk the workforce
Half 2 The switching technology: US staff quit jobs in record numbers
Half 3 Again to work: French staff resist the post-Covid ‘large stop’
Half 4 Pandemic ‘she-cession’ lingers for working ladies in rising markets
This partially explains why France’s workforce has not shrunk in the identical method as in different nations when their economies reopened.
Most of the folks that made up the US and UK’s ‘Nice Resignation’ have been center aged or older and easily determined to retire sooner than they’d deliberate. In France, the variety of ageing folks within the workforce who may make the leap early was smaller as extra had already retired.
Martin stays involved a few persistent lack of technical abilities among the many younger and that France’s early retirement age deters firms from investing in older staff.
“There’s clearly a necessity for a wake-up name and a giant reform of technical and mathematical abilities, as a result of we’re going to pay dearly,” he mentioned.
One other fear is that French employment is rising sooner than the economic system is rising, which may sign a declining productiveness.
“It’s not excellent news that we’re creating a variety of new jobs however with low ranges of productiveness. It means the typical high quality of jobs goes down,” mentioned Patrick Artus, chief economist at Natixis. “The large drawback we face is abilities and I don’t assume that has improved underneath Macron”.