Institute for Research in Economic and Fiscal issues

IREF Europe - Institute for Research in Economic and Fiscal issues

Fiscal competition
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Government Caring For Youth: The Path To Failure

France hosted in the November 15th week a summit dedicated to the "Fight Against Youth Unemployment." This is an excellent initiative for a country where the 16-25 years-old population reached a 26.1 % unemployment rate. Yet, France should be doing what is being done elsewhere, especially in Germany, where the rate of youth unemployment is three times lower than in France: 7.7 %.

Unfortunately, the French Government wants to continue on the path of welfare and assistantship. And during this summit, it was also looking for EU funds in order to finance its new discovery, the "youth-security" (garantie-jeune), a kind of RSA (active solidarity revenue) that should be given to 18-25 years-old. But this summit is an opportunity for the IREF to remind that for last 30 years, these policies are still the same for youth: allowances or social aids throw our youth into Government-addiction and unemployment. Here’s a reminder - not exhaustive – of allowances systems put in place to "take care" of young people.

We already know the system of subsidized jobs. Over the last 20 years, it has been enforced by every government, whether socialist or conservative. All these measures, aimed primarily at young people, managed to keep youth unemployed. Thus, unemployment remained unchanged and among the highest in industrialized countries (26.1 % against 7.7 % in Germany, 13 % in Canada and 15.6 % in the United States). France is 2 points above the EU average in terms of youth unemployment.

No less than 25 main “subsidized job systems” were set up by the Government in the last 20 years. Here the list in French:

Travaux d’Utilité Collective, TUC - 1984, Contrat de réinsertion en alternance, CRA - 1987, Contrat de retour à l’emploi, CRE – 1989 - 1993, Contrat Emploi Solidarité, 1990, Contrat Emploi Consolidé, 1992-1995-1996-1998, Contrat Initiative Emploi, CIE –1995-2004, Contrats Emploi Ville, 1996, Emploi jeune, 1997, Contrat d’avenir, 2004-2005, Civis – association, 2003, Civis – accompagnement vers l’emploi, ou Civis régional, 2003, Civis – création d’entreprise, 2003, Contrat Accompagnement Emploi , CAE - 5/2005, Contrat , Soutien emploi jeune en entreprise, SEJE - 9/2002, Stages d’insertion et de formation à l’emploi, SIFE - Individuel, Stages d’insertion et de formation à l’emploi, SIFE - Collectif, Convention reclassement personnalisé, Prime pour l’emploi , 1000 € de reprise emploi , Service militaire adapté, SMA - , Contrat d’insertion-revenu minimum d’activité, Contrat d’apprentissage, Contrat de qualification, Contrat d’adaptation, Contrat d’orientation, Contrat de professionnalisation, 2004.

In January 2011, the CAR was created. It is the "Revenue for Autonomy". It is made out of to allowances. One allowance of 250 euros per month, is paid for two years (at a decreasing rate in the second year) to young unskilled volunteers. They are committed to "actively seek employment or to be trained". This allowance is partially combined with a salary. The second allowance is given for young unemployed graduates after six months of fruitless job search. Actually, this comes down to giving a half income to support young people leaving the school system but that is no real incentive to find a job.

Here are also the most common aids granted to young people:

- Allowance for social housing. This allowance is the most “popular” among students since about 600,000 students are benefitting from it.
- Housing Solidarity Fund
- Universal health Insurance (CMU)
- Electricity Social Rate with bill payment
- Fund to help young people
- Young Active Solidary Income (RSA)
- Young Guarantee since this fall
- For RSA recipients or unemployed youth : free , total or partial , public transport and preferential rates with SNCF (railroads)
- For RSA recipients : Christmas bonus
- Support for getting a driver’s licence

When a youth is working again:

- Young jobseekers : temporary allowances
- Mobility Assistance

Attention: some of these aids can be combined.

All these allowances and aids made the French youth dependent on the welfare state . Moreover, the employment rate of young people aged 16 to 25 has been declining since the early 2000’s, reaching its lowest level : 28.2 %. At this rate and with all these aids, will the French youth still have any interest in finding a job?

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