Can Hollande Save the French Youth?

Gatien Bon

Over twenty years ago, the famous formula « en termes de chômage on a tout essayé ! » (in regards of unemployment, everything has been tried) was first used by François Mitterrand. Since then, unemployment has increased and youth unemployment is even in a worse case with almost twice the value of global unemployment rate.

Seeing the past 2012 presidential election, the youth could have expected a few breathtaking, revolutionary solutions to fight this disease. However, no solution has been satisfactory.

François Hollande’s contrat de generation (generation contract)

The socialist program for 2012, has very few measures for youth in the 60 propositions even if the initial will was to put youth at the center of the campaign. The main proposal is the generation contract in order to help to train and young workers.

Through this idea, Hollande wants to bring together a newly employed person with a senior. This senior will be able to work for half of his time to train the junior and teach him the fundamental points to be effective in his job. Not only will the junior be trained but the firm will see its welfare cost reduced.

This measure even if it may sound effective will only be applied to a limited number of firms, if we take as a referential the fact that very few firms chose to apply the tutorage system created a few years ago. Moreover, this reduction of welfare costs shall be very costly for public finance and benefit to firms, which would anyways have needed to employ new employees.

Nicolas Sarkozy’s competitiveness option and labour cost decrease

In terms of youth unemployment, Sarkozy did not put forward many specific solutions. In fact, his idea was to change the way the system works for all unemployed people. Indeed, he wanted to offer all unemployed a specific training session to be qualified for a recruiting sector.

The second part of the change consists in the welfare VAT (value-added tax) system. By reducing welfare costs and raising VAT, Sarkozy wants to create a competitiveness choc. In order to help the industry, he wants to bring the labour cost to decline. This should allow firms to grow and to employ, especially young workers. He has now lost and everyone is wondering if he will stand down or move to the centre in an attempt to gain power in the next elections.

A radical solution: a youth minimum wage

However, if both these ideas seem quite conventional and are not likely to have a specific impact, other ideas have not been tried yet and could change the game for young workers.

A first idea, supported by many liberal economists, would be to create a specific minimum wage for young workers. This minimum wage, lower than the general minimal wage would enable firms to take fewer risks by hiring a young professional who may or may not be as productive as expected.

Another way to help was tied in 2006 by Dominique de Villepin, Prime Minister at this time through the Contrat de Première Embauche (First Hiring Contract). The idea was to allow firms to have a longer trial period. Therefore, they could really have a chance on young people and help everyone. President Hollande understands that he has very little time to make a huge impact on France. Focusing on the youth and future of France is a great place to start.