France cuts jobless benefits as part of Macron reforms plan

Changes to France’s jobs market are entering into force on Friday as part of President Emmanuel Macron’s plan to make the labor market more flexible and revitalize economic growth. The new rules make it more difficult for the unemployed to claim benefits, which could encourage more people to seek work. Critics argue they fray an important social safety net.

France’s unemployment rate decreased to its lowest level in a decade this summer, at 8.5%, but still remains among the highest in the European Union. Here is a look at the main labor market changes and their expected impact.

STRICTER RULES

The new rules increase the amount of time people have to work to be entitled to unemployment benefits.

They also reduce by 30% the benefits that wealthier workers —those whose salary was above 4,500 euros ($5,000) a month — get after six months of unemployment.

French job seekers get, on average, over 1,000 euros ($1,115) per month for two years. Wealthier workers can get up to a maximum of 6,615 euros ($7,377) per month.

NEW RIGHTS

People who quit their jobs can now claim unemployment benefits if they worked for at least 5 years for their former employer and if they can show they have plans to start a business.

Self-employed workers, meanwhile, will be able to claim benefits of 800 euros per month for six months. Both categories of workers previously did not have access to any unemployment benefits.

IMPACT

The government admitted that some of the changes are “tough” but said they aim to encourage people to get back to work as soon as possible or start a business of their own.

The government expects the changes to save 3.4 billion euros ($3.8 billion) over three years and hopes they will reduce unemployment.

Unions have denounced the plans as unfair and damaging to the social security system.

PRO-BUSINESS POLICIES

The changes build on Macron’s first economic reforms, pushed through when he arrived in office in 2017, which made it easier to hire and fire workers. The government also cut taxes for businesses to boost hiring.

Last year, the yellow vest anti-government protests erupted against the perceived social injustices in the country and against economic policies seen as favoring the rich. The movement petered out this summer.

Next in Macron’s sights is France’s complicated pension system. His government is planning to lower pensions and raise the retirement age, with a formal proposal to be unveiled next year. The move has already prompted a series of strikes and street protests.