Unedic, the French unemployment insurance agency, is facing threats to its funding and support for job seekers. The executive is considering increasing Unedic’s contribution to finance France Travail, a new entity that includes Pôle emploi, the French public employment service. This move aims to avoid additional public expenditure while ensuring the financing of France Travail from next year.
Unedic has been posting good results this year, but these results have been obtained partly by reducing the rights of job seekers. The 2021 and 2022 reforms of Unemployment Insurance have played a significant role in achieving these results. Michel Beaugas, Confederal Secretary in charge of Unemployment Insurance, emphasizes that these surpluses have been obtained “on the backs of job seekers” and highlights the importance of not forgetting this crucial parameter.
However, the surplus from Unedic should not overshadow the agency’s debt, which currently stands at 60.7 billion euros. Part of this debt is due to the financing of partial activity measures during the COVID-19 crisis. Beaugas insists that Unedic’s primary purpose is to compensate job seekers, and a slow deleveraging of the joint scheme seems judicious to reduce the debt to 42.3 billion euros by 2025.
The executive’s plan to rely on Unedic’s contribution to finance France Travail faces opposition. France Travail, which aims to support job seekers and recipients of the RSA (Revenu de Solidarité Active), would require 2.2 to 2.7 billion euros over three years. The government, however, rejects the possibility of increasing the state’s participation, as it would result in additional expenses in the finance bill for 2024.
Unedic currently finances 80% of Pôle emploi through the payment of 11% of its revenue. The government expects Unedic to do better and increase its participation by 400 million euros next year. The minister argues that this increase would not change Unedic’s contribution rate, citing the dynamics of payroll and job creations. However, calculations indicate that Unedic’s contribution would likely increase to 15% from the current 10% to 11%.
The negotiation on unemployment insurance is set to take place in December. The government predicts a decrease in unemployment to a rate of 4.5% in 2027, while various economic studies suggest a rise in unemployment to a rate above 8% over 2023-2024. Michel Beaugas criticizes the government’s forecast, claiming it serves to justify the puncture of Unedic.
The government’s control over unemployment insurance rules was established through a deficiency decree in July 2019, which will no longer be valid after December 31. The absence of an agreement between social partners in 2018 provided the government with an opportunity to regain control. Michel Beaugas emphasizes the necessity of negotiations on the rules and governance of unemployment insurance, which promise to be bitter.
What measures can be taken to address Unedic’s significant debt and ensure its ability to effectively support job seekers in the long term without compromising their well-being and rights
Ures during the COVID-19 pandemic. This situation puts the financial stability of Unedic at risk and creates uncertainties for the future.
The proposal to increase Unedic’s contribution to finance France Travail has been met with mixed reactions. Supporters argue that it is a necessary step to ensure the sustainability of job seeker support services and avoid additional burden on public finances. However, critics argue that it is unfair to shift the financial burden onto Unedic and potentially affect the already limited rights of job seekers.
The reforms implemented in 2021 and 2022 have helped Unedic achieve positive financial results. However, it is crucial not to overlook the negative impact these reforms have had on job seekers. Michel Beaugas, a Confederal Secretary responsible for Unemployment Insurance, highlights the importance of considering the well-being of job seekers and cautions against solely focusing on financial gains.
Despite the surplus generated by Unedic, the agency is currently burdened with a debt of 60.7 billion euros. Part of this debt can be attributed to the funding of partial activity measures during the COVID-19 crisis. This significant debt poses a risk to the financial stability of Unedic and raises concerns about its ability to support job seekers effectively in the long term.
The future of Unedic’s funding and support for job seekers remains uncertain. As discussions regarding the financing of France Travail continue, it is crucial to find a balanced approach that ensures the stability of Unedic’s finances without compromising the rights and well-being of job seekers. Ultimately, the goal should be to provide adequate support to those in need while maintaining a sustainable and equitable system of unemployment insurance.
Financing France Travail through Unedic contributions is undoubtedly a complex challenge. With the diverse range of industries and employment sectors, ensuring a fair and equitable financing system is no easy task. Balancing the needs of both employees and employers while maintaining the financial stability of Unedic is a delicate tightrope to walk. However, it is vital that the complexities are addressed, as the success and continued operation of France Travail depend on sustainable and effective financing.