When French Prime Minister Gabriel Attal announced a reform of the unemployment insurance system for the third time in three years on Wednesday, March 27, he knew he was about to tackle labor unions and employers' federations head-on. Admittedly, the formalities were respected: The government will let the employers and unions conclude their negotiations on older workers' employment, which include discussions on benefits for those over 55. The talks, which were due to end on Wednesday, have been extended until April 8 at their request. Yet, Attal was sufficiently clear about his plans to show that the government intends to take control of the way the unemployment insurance system is managed.
At a time when France's public deficit is spiraling out of control due to the economic downturn, the government has been looking to make several billion euros of cuts on the unemployment insurance system. Three ideas are being explored: Reducing the current 18-month period of unemployment benefits, revising the minimum period of employment entitling claimants to benefits and reducing the level of benefits.
The first two have been favored, with the prime minister specifying that the duration of compensation would not be less than 12 months. These announcements have provoked an outcry from the unions. Given the system's current surpluses, they had agreed with employers to lower their contributions and to improve access to unemployment insurance for newcomers to the labor market. The government has considered these changes to be unsuitable.
Going back on earlier statements
The government's desire to take control of the unemployment insurance system has been in the making since 2017. The switch from contributions from wages to the "generalized social contribution" system, combined with the aim of ending mass unemployment, has led the government to become increasingly forceful in its push for full employment. For this, it has been making the Unédic association (which manages the unemployment insurance system) an instrument of its policy, alongside the reform of the government employment agency France Travail and the development of vocational training. This strategy could only lead to a confrontation with labor unions and employers' organizations. They remain committed to protecting the unemployed and defending the interests of companies, while the government is arguing that workers' quick re-employment is the main condition for sustaining the welfare state.
The new measures outlined by Attal, which are due to be implemented in the autumn, will impose a heavy toll on the unemployed. It will be felt all the more harshly as it is set to be implemented in a poor economic climate, and as unemployment rates have started to rise again.
Shaken up by the scale of deficits, the government has gone back on its earlier statements on this issue, as it had promised in 2023 to correlate the hardening of the unemployment benefits system to improvements in the job market. Its haste to embark on a new reform is all the more questionable, given that it did not take the time to assess the previous two reforms' impacts in order to correct their harmful effects. Its initiative will be interpreted as a blow leveled at the most precarious in the name of the commitments made to financial rating agencies. After the wave of opposition to the pension reform, its estrangement from the labor unions is all the more significant.