The INSEE, the official statistics arm of the French government, announced that first-quarter unemployment reached 10%. The reality of the problem was worse than that. Like the United States, France has a large portion of its population that works part time but would like full-time work. And, like the U.S. and almost all of Europe, jobless rates among the young are frightened high. In the case of France, in the first quarter 22.5% of people ages 15 to 24 were unemployed.
To state the obvious, none of the developed economies can recover when joblessness is close to 10% or higher. And unemployment among the young means that the years in which they are consumers could be deferred, and many end up stuck in low-paying jobs and will not reach that status at all.
The current proposals of new French president Francois Hollande to help his own economy and Europe’s are to block layoffs of workers in France and drive stimulus for financially weak regional nations to help them recover. His plans may be thwarted by the economy in his own country. As gross domestic product slides, companies will be tempted to cut workforces in France, and Hollande’s position as a savior of EU economic growth may have to move to that role in his own country. New economic realities could undermine his policy platforms.
Hollande likely will be asked to create and politically press austerity measures of his own for France, just at the time when he is encouraging the rest of Europe to put stimulus ahead of government budget cuts. France already has run into skepticism from credit rating agencies, which think the country will be increasingly burdened by its own debt. No one thinks France will go down the road Spain has, but that does not mean struggles with its budget will not increase as the nation’s economy wobbles.
The new unemployment figures for France will force Hollande to spend more time at home as he tries to solve his own nation’s problems.
Douglas A. McIntyre