What future for unemployment insurance?

Potential domino effect

An agreement to improve the employment rate and working conditions of seniors would have paved the way for the entry into force of the unemployment insurance agreement signed in the fall of 2023 between several unions (CFDT, FO, CFTC) and employers.

This agreement was in fact to be supplemented by an amendment which raises by two years the age giving entitlement to longer compensation for seniors, in order to achieve 440 million savings by 2027.

But from a union source and according to Unédic, no meeting was scheduled at this stage to discuss this amendment. The Ministry of Labor told AFP on Monday that it could still be signed before June 30, the expiry date of the current unemployment compensation rules.

What will happen now?

After the failure of negotiations on the employment of seniors, the Minister of Labor Catherine Vautrin indicated last week that in the absence of an amendment for seniors to the unemployment insurance agreement, the government would issue a decree of "deficiency ".

This decree could apply while waiting for unions and employers to negotiate a new agreement on the basis of a framework letter incorporating the guidelines set in March by Prime Minister Gabriel Attal.

However, it is not certain that unions will take this path if they judge that the imposed framework is too restrictive and does not allow them to defend the rights of job seekers.

In this case, the rules for compensating job seekers will continue to be set by decree, as has been the case since 2019.

What does the government want to do?

Gabriel Attal announced at the end of March that he wanted to ask the social partners to open new negotiations on unemployment insurance this year: he plans to reduce the duration of compensation by "several months" while keeping a minimum of 12 months, compared to 18 month today for those under 53.

The Prime Minister also raises the possibility of increasing the duration of affiliation, i.e. the time one must have worked to be entitled to compensation (currently 6 months). The option of reducing the level of unemployment compensation is not favored.

“I want us to have the parameters of this reform in the summer so that it can come into force by the fall,” he declared.

The unions reacted strongly to this announcement, with the CFDT estimating that the unemployment insurance system "cannot be a variable for adjusting the state budget".

Current rules

Since February 2023, compensation periods have been reduced by 25% for new beneficiaries due to the lasting drop in the unemployment rate below 9% (principle of countercyclicality).

In reality, Unédic points out that “most beneficiaries only consume part of their potential entitlement: the consumption rate was 56% in 2022”.

This reform follows another, launched in 2019 and fully entered into force at the end of 2021. It had already tightened the conditions of compensation for job seekers, particularly those who alternate periods of work and inactivity. According to Unédic, it resulted in an average drop of 16% in daily allowances for the unemployed affected.

How many people were compensated, and for what amount?

According to the latest data from Unédic, in the third quarter of 2023, there were 6,1 million job seekers in total, all categories combined, including 3 million in category A, that is to say without any activity. . Of these 6,1 million, 2,6 million were compensated.

The average net allocation amounts to 1.033 euros.