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French unemployment continues to rise

Friday 15 June 2012, by Nathalie DROAL

Despite all President Sarkozy’s efforts, unemployment has continuously increased since 2007. That is unfortunately the conclusion we draw from DARES and international statistics.

Eurostat data shows a French unemployment rate at 9,7%, compared to 8,4% in 2007, which means an increase of more than 15%. But it is far from taking into account all the unemployed people. It follows the narrow International Labour Organisation (ILO) definition. In application of the international definition adopted in 1982 by ILO, an unemployed person is a person of working age (15 or over) who meets three conditions simultaneously:

- to be unemployed, meaning not having worked, even one hour, in the course of the reference week ;
- to be available to take up employment within two weeks ;
- to have actively looked for a job in the previous month or to have found one starting within the next three months.

The definition of category A jobseekers is almost the same : “jobless jobseekers obliged to actively seek a job” (it implies that they do not have any activity and accordingly are immediately available).

Thus it does not take into account jobseekers that are not obligated to actively seek a job (for a reason or another: internship, training…), jobseekers having performed a short-term reduced activity, and employed jobseekers, those latter being mostly subsidized employment. If we take into account all categories of jobseekers except the category C (jobseekers having performed a long-term reduced activity (i.e. more than 78 hours in the course of the month)), their number has increased from 3 million to 4,1 million between 2007 and 2011, which means an increase of almost 35%. As a percentage of the total working age population, it gives a 9,2% rate, compared to a 7,2% rate in 2007 [1] . In terms of the total active population, it gives a 13,6% rate, compared to a 10,7% rate in 2007 [2] .

But these figures are well below reality. To understand, we can look at what happened in Germany. Between 2002 and 2011, German employment increased by 3, 1 million. In the meanwhile, the inactive working age population decreased by 3,4 million and the working age population decreased by 1,8 million: there are therefore 1,6 million people that “came out of the woods” to join the labour market. Out of 3,1 million newly created jobs, a half has been taken by formerly unemployed people and a half has been taken by formerly inactive people. The German example apparently confirms the rule that says two additional jobs have to be created to absorb one jobseeker [3] .

If the opposite is true, i.e. if one additional jobseeker conceals two missing jobs, actual unemployment – all unemployed people (or people performing a short-term reduced activity) that may accept a job – increased in France by two million between 2007 and 2011. This extra one million could easily be swept under the carpet as the total number of inactive working age people is enormous.

The 2008 crisis could be a good excuse for this situation. But the German example clearly shows that the crisis in itself is not alone responsible. Between 2007 and 2011, unemployment in Germany decreased from 8,7% to 5,9% while in France it increased from 8,4% to 9,7%. The following chart clearly shows the gap between the two countries:

Moreover, the inactive working age population in France is larger in proportion. As we already said, this population decreased by 3,4 million since 2002 in Germany (from 15,6 million to 12,3 million) : in the meantime, this population increased by 140 000 in France (from 11,7 million to 11,9 million).

As a percentage of the total working age population, it decreased from 28,5% to 22,8% in Germany while it decreased from 31% to 29,6% in France. This rate is almost stable for the United Kingdom but it remains at a much lower level than in France, from 25% to 24,3%.

The large population that can come out of the woods in France as it did in Germany allows to claim that official unemployment data are widely underestimated.

Footnotes

[1Average over the year of monthly unemployed people (Dares data) divided by the 15 to 64 year-old population the 1st January of each year (Eurostat data).

[2Average over the year of monthly unemployed people (Dares data) divided by the annual average of the active population (Eurostat data).

[3This is described by Bernard Zimmern in the book Les Fabriquants de chômage (The unemployment makers), Plon, 2002, p.61. Between March 1997 and March 2001, employment increased by 1 500 000, and the number of jobseekers decreased by 800 000. This is another example which confirms this rule.

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