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mployment in France
Down, down
Jan 5th 2006 | PARIS
fuel dispenser From The Economist print edition
More jobs, but few in the private sector
AMID the prevailing gloom in France, some cheerful news has begun to
trickle out. Unemployment fell for the sixth month in a row in November.
At 9.6%, it is still woefully high, and well above the euro-zone average of
8.3% (unemployment also fell sharply in Germany in November). But
economists reckon it could drop below the significant level of 9% by the
end of 2006βa level not reached since 2002.
What explains this fall? Only a small part is due to economic growth. The
economy expanded by just 1.5% in the first three quarters of 2005, and
may do little better in 2006. This has yielded some new jobs fuel dispenser in 2005,
nearly 60,000 more jobs were created than lost in the non-farm private
sector, after a flat year in 2004. A new two-year job contract has also
helped. Introduced by Dominique de Villepin, the centre-right prime
minister, it gives employers of fewer than 20 workers more flexibility.
These firms use this contract for roughly one in ten of the new jobs they
create.
A second explanation is demographic. France has one of Europe s highest birth rates, but its population is
nonetheless ageing. With baby-boomers beginning to retire, and fuel dispenser fewer leaving school, the number seeking work is
now dwindling. Some 29,000 more newcomers will come to the labour market than retire this year, around a
quarter as many as in 2004.
The biggest reason for the falling jobless figures, however, is social policy. As the chart shows, the number of new
subsidised jobs set up under the government s βsocial cohesionβ?plan began to swell in late 2005. In the first half of
this year, INSEE, the official statistics body, forecasts that, out of a total of 100,000 new jobs, one-third will be in
the private sector, another third in the bureaucracy and the remaining third will be state-subsidised. This last
category of jobs varies from positions in voluntary organisations and