This is the third part of FT series analyzing how the Covid-19 pandemic Labor market transformation and change the way millions of people think about work
Aubérie Zaro left her Paris-based Big Four consulting job in January and decided to take a moment to think about what she really “wants to do.” After a nine-month pause in the job market, the 30-year-old began looking for a new position. To her surprise, she found one that matched her goals within a month.
“I think with the pandemic, all the hiring might freeze, but it’s really fast,” she said.
Zaro’s quick and successful job search is something thousands of French workers have experienced in recent months. As in most developed countries, they have benefited from government support for businesses and a strong economic recovery, which has helped bring the unemployment rate – those who are out of work but actively looking for work – back to pre-pandemic levels of 8%.
But unlike the UK and USA, where there are record numbers of people has left the workforceFrance and several other EU countries have also avoided the so-called “Big Quit” trend: the share of working-age French people employed or looking for work has risen to 74%, a record high.
Such trends have raised hopes that the post-pandemic economic boom could mark a step change for countries like France that have long suffered from high levels of structural unemployment.
“Perhaps the conditions have finally been met to reduce unemployment,” said Stefano Scarpetta, Director for Employment, Labor and Social Affairs at the OECD. “The French economy grew stronger than I expected.”
Direct state support for companies and their employees during the pandemic partly explains why workers in France and some European countries – such as the Netherlands, Norway and Sweden – re-entering the workforce or leaving the workforce in lower numbers than in other developed economies.
Part of France’s 100 billion euros Plan de Relance, or Recovery Plan, thousands of companies have received financial assistance to help them retain existing employees and, in some cases, hire more people. In contrast, the United States supports workers’ incomes by providing additional direct benefits to them.
This aid system has allowed Nicolas Sordet, the head of Lyon-based chemicals startup Afyren, to add 45 new employees. The €7 million promised by the state, he said, is a “catalyst” to invest in the development of a new factory in northern France that will make fertilizers from agricultural waste.
Reforms more than a decade before the pandemic – and continued by President Emmanuel Macron – also played an important role. Measures such as 10 billion € business tax reduction and lower layoff costs have made hiring businesses more attractive, economists said.
Macron’s youth-targeted policies have also had an impact, including a scheme to provide financial incentives for businesses to hire apprentices. Among 15-24 year olds, employment is now at its highest level since 2003, when records began – although in absolute terms it remains low, at 33%.
Macron, the first person in his term as prime minister to pledge to reduce France’s unemployment rate to 7% from 9.5%, used a national address this month to justification his Quoi qu’il en coûte, or “Whatever it takes,” the pandemic strategy, argues that this makes it possible “not only to fight the crisis, but to respond more strongly”.
But economists are divided over how much credit Macron can give to the labor market recovery, and concerns persist about its underlying health.
France’s unemployment rate – 8.1% in the third quarter – is still much higher than in the UK – 4.3% in the same period – or Germany – 3.4%. French companies also say they have difficulty finding employees – although this is a long-standing structural problem that makes it difficult to find employees. before the pandemic.
Philippe Martin, professor of economics and vice-president of the French Council for Economic Analysis, said: “Among people aged 25 to 55, the employment rate in France is very standard and comparable to other countries. . The place where France is doing so badly is for the young and the old, and it’s a matter of relative structure, it’s here to stay. ”
Employment of older workers has improved in recent years. However, even though about two-thirds of 50- to 64-year-olds are working – an increase of about 10 percentage points from a decade ago – France remains one of the countries with the youngest effective retirement ages in the world. world, at an average age of 60.8.
FT Series: Where did all the workers go?
Features in this series consists of:
Part 1 How to reduce migration rates and retire early downsizing the workforce
Part 2 Switching Generation: American Workers quit jobs in record numbers
Part 3 Back to work: French workers protest against ‘big quits’ in the post-Covid era
Part 4 The ‘she-cession’ pandemic persists for working women in emerging markets
This partly explains why France’s workforce has not contracted like other countries when its economy reopened.
Many of the people who made up the US and UK ‘Great Resignation’ are middle-aged or older and simply decided to retire earlier than planned. In France, there are fewer elderly people in the workforce who can jump in early because many are already retired.
Martin remains concerned about the continuing shortage of technical skills among young people and France’s early retirement age preventing companies from investing in older workers.
“Clearly there needs to be a wake-up call and a major overhaul of engineering and math skills, because it will cost us dearly,” he said.
Another worry is that French employment is growing faster than the developing economy, which could signal a drop in labor productivity.
“It is not good news as we are creating a lot of new jobs but with low levels of productivity. It means the average job quality is going down,” said Patrick Artus, chief economist at Natixis. “The big problem we face is skill and I don’t think that has improved under Macron.”