Liberalism’s Impact on Job Creation: Evaluating the Results

The liberal policies implemented by French President Emmanuel Macron have been touted as successful in creating jobs, with 1.7 million jobs created over the past six years. Macron himself highlighted this achievement during a televised address on April 17, stating that the results were “unprecedented and indisputable.” The Ministry of Labour’s website also proudly displays the historic job creation numbers.

However, economists and experts are cautious about attributing all job creations solely to Macron’s reforms. Economist Anne Eydoux points out that it is difficult to evaluate the specific effects of the recent reforms without a comprehensive assessment. She also highlights that previous reforms, such as the reduction in working hours, have been evaluated and shown to have contributed to job creation. Eydoux emphasizes the importance of conducting thorough evaluations before making definitive claims about the impact of labor market measures.

Another reason for skepticism is that the liberalization measures implemented by Macron’s government are not entirely new. France has been moving towards more flexible contracts and deregulation for nearly forty years, but the results have not been as expected. Despite these measures, France still has a relatively high unemployment rate compared to its European neighbors, such as Germany.

Furthermore, the quality of employment has been affected by these measures. The proportion of part-time employees and fixed-term and temporary workers has increased significantly over the years. This has led to concerns about the stability and security of jobs in France.

The government’s approach to social welfare has also evolved, with a greater emphasis on “workfare” policies. The minimum integration income (RMI), which was transformed into the active solidarity income (RSA), has become increasingly accompanied by “duties” and penalties. The government has also introduced measures to reduce the duration and amount of unemployment benefits.

Critics argue that these measures have not effectively reduced unemployment rates and have instead led to a decrease in the number of people receiving benefits. The economist Elie Cohen points out that social expenditure, including unemployment compensation, has not actually increased as claimed by the government.

Moreover, the tightening of rules and the reduction in compensation for unfair dismissals have made it more difficult for employees to challenge their working conditions in court. This has resulted in a significant decrease in the number of appeals to labor courts.

Overall, while Macron’s liberal policies may have created jobs, there are concerns about the long-term impact on the quality of employment and the weakening of trade union power. Critics argue that the labor code is becoming increasingly limited, focusing mainly on protection against discrimination and harassment, while other aspects such as working hours, remuneration, and dismissal are subject to collective agreements.

As France continues to navigate its labor market challenges, it remains to be seen whether Macron’s liberal approach will deliver the desired long-term results.Liberalism Works: 1.7 Million Jobs Created in the Past Six Years

In a televised address on April 17, French President Emmanuel Macron proudly announced that 1.7 million jobs have been created over the past six years, citing it as proof that liberalism works. The Ministry of Labour’s website also displays these job creation figures, hailing them as historic.

Despite the challenges posed by the health crisis and the war in Ukraine, government officials insist that their “voluntarist in favor of employment” policy is bringing the country closer to full employment. However, economists caution against attributing this increase solely to the reforms implemented in the last five years. They argue that job creation is a multifactorial process and that other factors, such as the reduction in working hours, have also played a significant role in past job creation.

Furthermore, critics point out that the government has been reluctant to evaluate the impact of its reforms. Last year, the Department of Labor terminated the committee responsible for assessing the 2017 work orders that aimed to ease the labor market. The committee’s co-directors, Marcel Grignard and Jean-François Pilliard, from the CFDT and employers respectively, released a “mixed assessment” of the reforms in January 2023. They highlighted the challenges of isolating the specific effects of the orders and emphasized the numerous parameters that influence the economy and employment.

Another cause for concern is the quality of employment created. While the government’s liberalization measures have led to an increase in job opportunities, they have also resulted in a rise in part-time and fixed-term contracts. The proportion of part-time employees has increased from less than 10% forty years ago to 18% in 2021. Similarly, the share of fixed-term and temporary workers has risen from 4.3% in 1983 to 10.6% in 2020.

Critics argue that France has become adept at creating a variety of deregulated short contracts, which has negatively impacted the quality of employment. They also highlight the increasing reliance on subsidies to incentivize job creation, such as the tax credit for competitiveness and employment introduced in 2012. While these measures have led to job growth, they have come at a high cost to public finances, and employees’ wages have not kept up with inflation.

The government’s approach to social benefits has also evolved over the years. The minimum integration income (RMI), introduced in 1988, has been transformed into the active solidarity income (RSA) and is increasingly accompanied by “duties” to encourage recipients to return to work. The government has also introduced measures to reduce the duration and amount of unemployment compensation, despite studies showing the ineffectiveness of such measures in reducing unemployment rates.

While the government touts the decrease in the number of unemployed people receiving benefits as a positive outcome of its reforms, critics argue that this is primarily due to the impact of the reforms rather than an improved economy. They point out that the decrease in compensation has outpaced the decrease in registered job seekers, indicating that the reforms have contributed to a decline in social spending.

Overall, while the government celebrates the job creation figures as a testament to the success of its liberal policies, critics argue that the situation is more complex. They emphasize the need for comprehensive evaluations of the reforms and raise concerns about the quality of employment created and the impact on social benefits.

What impact have the government’s “workfare” policies had on unemployment rates and the number of people receiving benefits in France

Ees and temporary workers has grown significantly, raising concerns about job stability and security.

Additionally, the government’s approach to social welfare has shifted towards “workfare” policies, placing more emphasis on responsibilities and penalties rather than providing adequate support. Measures such as reducing unemployment benefits and increasing requirements for receiving assistance have been criticized for not effectively reducing unemployment rates and instead leading to a decrease in the number of people receiving benefits.

Furthermore, critics argue that the tightening of rules and reduction in compensation for unfair dismissals have made it harder for employees to challenge their working conditions, resulting in a significant decrease in appeals to labor courts. This raises concerns about the weakening of trade union power and limited protection for workers in areas such as working hours, remuneration, and dismissal.

While Macron’s liberal policies may have contributed to job creation in France, there are valid concerns about the long-term implications for the quality of employment and the overall labor market. As the country continues to grapple with labor market challenges, the success and sustainability of Macron’s liberal approach remain uncertain.