TRUE OR FAKE. Is the unemployment rate at its lowest in 40 years, as Emmanuel Macron’s camp claims?

Are the calculations of the presidential camp correct? According to the latest figures published by INSEE, Tuesday February 14, the unemployment rate stood at 7.2% of the working population in France (excluding Mayotte) in the fourth quarter of 2022, down very slightly by 0.1 point. France thus had 2.2 million unemployed, or 45,000 less than the previous quarter. The statistic was immediately relayed by Renaissance, Emmanuel Macron’s party, which rejoiced on Twitter with a unemployment at 40-year low. A result “historical” that the political formation however illustrated with a graph not starting in 1982, but in 2014.

History!
Full employment objective. pic.twitter.com/bylREuujQI

— Renaissance (@Renaissance) February 14, 2023

On Twitter, Emmanuel Macron himself, everything as the prime minister and the minister of laborrelayed this “good news”but with a more convoluted formula. “Unemployment is at its lowest level for the second time in 40 years”, tweeted the head of state. But is the situation on the employment front as exceptional as the President of the Republic, the head of government and their camp announce?

Lowest level of unemployment in 14 years

“An unemployment rate of 7.2%, as defined by the ILO [le Bureau international du travail, dont les critères pour comptabiliser les demandeurs d’emploi permettent de comparer la situation de différents pays]is actually quite historic”, confirms with franceinfo Anne-Sophie Alsif, chief economist in the audit, consulting and accounting firm BDO France. But this is not the lowest level observed for 40 years.

By reaching 7.2% in the fourth quarter of 2022, the unemployment rate thus returned to a level that it had not known… since the first quarter of 2008, i.e. 14 years ago. It had certainly fallen a little lower, to 7.1%, in the second quarter of 2020, but it was a drop “trompe l’oeil”, observes INSEE. At this time, France was suffering the full force of the Covid-19 epidemic and, due to the first confinement, many French people had stopped looking for work, consequently leaving the ranks of job seekers counted by Insee. .

We must therefore go back to the first quarter of 1982 to see the unemployment curve reach and then exceed the 7% threshold, i.e. 40 years ago. The wording used by Emmanuel Macron and Elisabeth Borne is therefore fairer than that of the presidential party.

Olivier Dussopt, on the other hand, was mistaken when he declared before the National Assembly on Tuesday February 14 that the unemployment rate was “the lowest (…) for forty years”. Before the deputies, the Minister of Labour, Employment and Integration also affirmed that the current level of unemployment among the under-25s was “lowest since 2000s”that “the activity rate [n’avait] never been so high” and that the CDI rate was now “greater than 50%”.

Rate #unemployment at 7.2%: “This is the lowest rate for forty years (…) the activity rate has never been so high (…) we have reached a permanent contract rate of over 50% , France is creating employment and quality employment”, rejoices @olivierdussopt. #DirectAN #QAG pic.twitter.com/nKIbeQxhSZ

—LCP (@LCP) February 14, 2023

These last four elements of Olivier Dussopt’s statement are correct. According to INSEE statistics, published in the fourth quarter of 2022, the unemployment rate for people under 25 (16.9%) is indeed the lowest observed since 2002. The activity rate (73.6% at the end of 2022 ) is indeed the highest observed since 1975 and the CDI rate, as the minister states, is well over 50% (50.5% in the fourth quarter of 2022).

Employment driven by economic conditions

How can this historic drop in unemployment be explained? For Anne-Sophie Alsif, the good economic climate played a determining role. “The ‘whatever it takes’, put in place to deal with the Covid crisis, has injected a lot of money into the economy – almost 200 billion euros”recalls the economist. “Thanks to this fiscal stimulus, demand has been buoyant, leading to strong demand for labor from businesses.”

“Employment is doing well everywhere in Europe”however, puts into perspective Bruno Coquet, doctor of economics and expert associated with the OFCE (French Observatory of Economic Conditions). “Apart from a few exceptions, most countries have one of the lowest levels of unemployment observed over the past forty years. France, without being among the worst, is not ranked among the best”. According to Eurostat, the unemployment rate in euro zone countries averaged 6.6% in December 2022, compared to 7.2% in France.

In France, “many jobs have been created in the service sector, in highly skilled positions, but also in catering or construction”, adds Bruno Coquet. Without calling into question the importance of the creation of unsubsidized jobs, “a lot of subsidized jobs have also been created”, adds the economist. The State has thus strongly encouraged the use of apprenticeship by paying a bonus of 6,000 euros for any apprenticeship hired. The effect was immediate, since more than 800,000 apprenticeship contracts were signed in 2022. According to INSEE, all subsidized employment represented nearly 2.3 million jobs at the end of 2021, up nearly 7% over one year.

An effect of radiation at Pôle emploi?

On social networks, some elected officials believe that the drop in unemployment is explained by the record number of radiations of unemployed by Pôle emploi. “The government is multiplying the lies! Not only is the unemployment rate not at the historically low level they claim, but the rate is also falling…because deregistrations are increasing! More than 50,000 people have been deregistered from Pôle Emploi in 2022”thus denounced on Twitter Alexandre Loubet, deputy for Moselle and vice-president of the National Rally group at the National Assembly.

“The increase in write-offs, from 40,000 previously on average to 50,000 currently, cannot numerically explain the drop in unemployment”, slice Eric Heyer, economist and director of the analysis and forecasting department at the OFCE. The increase in write-offs is thus to be compared with net job creation, which in 2022 will reach nearly 304,900 in private salaried employment, according to INSEE. “If the radiation had a greater impact, we would have seen the ‘halo around unemployment’ explode”adds the economist.

The expression “halo around unemployment” brings together various situations of individuals who do not fit into the classic criteria of job seekers. It makes it possible, among other things, to count unemployed people who have looked for a job, but are not immediately available to take it, or even people who have not searched for a job, but who declare all likewise wanting to find work, reports INSEE. However, according to the Institute, in the fourth quarter of 2022, the percentage of people unemployed or in this “halo around unemployment” increased by only 0.1%. These situations remain numerous: in total, 1.9 million people are in the “halo around unemployment”, INSEE figures.

On the other hand, although also falling sharply, the large percentage of people ‘in a situation of constraints on the labor market’, that is to say unemployed, suffered part-time or in the “halo around unemployment”, can however relativize the good results of employment. According to INSEE, nearly 16.5% of “participants in the labor market” were in such a situation of constraint, a percentage more than twice that of the unemployment rate as defined by the ILO.

Even if it is not at its lowest for 40 years, unemployment has therefore never been so low for almost fifteen years. Will it last? “A slowdown is in the pipeline, economic growth is expected to be only 0.6% in 2023”, warns Eric Heyer. “If business productivity – which fell during the post-Covid period – also picks up, which would reduce the demand for work, then there is a risk of job destruction.”