According to International Labour Organization (ILO), the unemployment rate is the percentage of economically active people who are unemployed on the ILO measure.(“Definitions of International Labour Organisation (ILO) measures,” 2017) While the ILO definition of unemployment include people who are out of work and have accepted a job that they are willing to start in the next fortnight; or out of job, want a job, and have actively sought work in the previous four weeks and are available to start their work within the next fortnight.(“Definitions of International Labour Organisation (ILO) measures,” 2017) In short, an unemployment person is the people who have the necessary qualifications to work, is willing to work and agrees to work for the market wage but unfortunately does not get any job. In economics, unemployed means those who are not working but are actively looking for jobs. (“Unemployment rate,” 2017)
The line chart below shows the total unemployment rate of France from the year 1990 to the year 2013:
As we can see that, the unemployment rate in France is keep increasing start from the 1990s and it is clear that there was a slight drop in 1995. In 1995, France reduces the social contribution to be paid when employing the minimum wage staff from 45% to 25%; it has played an important role in improving the enthusiasm of the employees in the enterprises.
After that year, the country’s unemployment rate began to rise again and there ware a slight increase and slight decrease in four consecutive years. However, after 1999, the unemployment rate in France started to plummet and hit the lowest unemployment rate in the past ten years in 2002 which is 8.275%. According to the second “Aubry” law, starting from 1 February 2000, France’s statutory working week was reduced from 39 hours to 35 hours for all companies employing over 20 people. The company needs to hire more workers to ensure the normal operation run smoothly.
While the other reason is that from 1 July 2001 onwards, the France government began to implement the new program. The main objective of this program is to help the unemployed to re-employ in the most effective way. To end this, the following three main measures have been taken: job search for unemployed persons; personalized control of the unemployed; provision of suitable training courses. The meaning of the program is for each unemployed people to implement the system of supervision by contract, at the same time they need to sign an agreement with the agencies of unemployment insurance, they need to accept the training programs provide by the national employment department or unemployment insurance agencies. Not only that, they also have to accept the appropriate job offer, even if the wage of the job is lower than the original wage income. However, if they refuse to comply with the agreements, the benefits provided by the unemployment insurance will be terminated.
The unemployment rate of France is slowly increasing every year until 2006 and keep dropping until the year 2008. This is the lowest record in France in the past 18 years which is 7.467%. Under the global financial crisis in 2008 and the successive European debt crisis, the unemployment rate in France rose rapidly from 7.467% to 9.083% in 2009. However, after a sudden drop in 2011, it suddenly soared to 10.3% in 2013.
Over the years, France government has always tried to reduce the unemployment rate in the country. Hence, the government works hard in the development of economic, reforming the social security system, and implementing the personalized employment services.
The main factor which causes the increasing in the unemployment rate is because of high social welfare, high labour costs, unreasonable labour service system and the government policy. The subsidies give to the person who is unemployed lead may people to voluntarily lose their jobs and the high labour costs will lead company unwilling to recruit new employees.