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Unemployment

Definition
Unemployment is the situation in which an individual, or part of the working
population of a country (or region), has no job and is looking for one.
It's also an economic and social concept that designates the situation in which a
person of working age and wishing to work finds themselves unemployed and
actively seeking paid work. This condition can result from a variety of factors,
including economic fluctuations, structural changes in industries, individual
choices, or difficulties in adapting to the labor market.

How do you measure unemployment?

We use the unemployment rate, which is the ratio between the number of
unemployed and the active population.

Demand for labor is calculated on the basis of legal working hours and activity
in the productive sectors. We can therefore determine the level of employment
(or unemployment) by calculating the balance between demand and supply.
Companies don't always need all the labor available in a country.

The different forms of unemployment

Unemployment takes many different forms, and can therefore be classified
according to its characteristics. A distinction is made between :
♣ Structural unemployment, which has qualitative causes such as changes
in job structure, the replacement of men by machines,
 the qualifications of jobseekers no longer match the job offer.

♣ Cyclical unemployment, which has quantitative causes: the economic

situation means that companies need fewer staff. This is a short-term
problem affecting one or more sectors, or even the whole economy.

♣ Frictional unemployment, which is due to the period of inactivity one

may experience between the moment one loses and the moment one
regains employment.

♣ Technical unemployment, which is caused by the temporary stoppage of

a company's activity, following a drop in demand or for technical reasons
(disruption of energy supplies, factory fire, strike by certain categories of
personnel...).

♣ Partial unemployment, which describes the situation in which the number

of hours worked is less than the number of hours usually practiced.

Inequalities in the face of unemployment

Unemployment does not affect all categories of the population in the same way,
and trends emerge from an analysis of the figures, revealing the importance of
factors such as gender, age and qualifications.
We can thus observe that :
♣ Women are more affected than men.
♣ Young people and older workers more affected than the middle brackets.
♣ Non-graduates more affected than graduates.
Causes of unemployment
The causes of rising unemployment are manifold. They are due to weak GDP
growth and companies' lack of competitiveness. The main causes of
unemployment include :

⮚ The high cost of work

The primary cause of unemployment is the cost of labor (wages + employers'
social charges). Since they are too high, the minimum wage and labor costs are
seen as a brake on business competitiveness, and therefore on job creation.
The ideal labor market would be one in which the hourly labor rate is set freely
between players, according to the market law of "supply and demand".

If the supply of jobs is greater than demand, the hourly rate rises to encourage
employees to work. On the other hand, if supply is lower than demand, the
hourly rate falls, or rather, adjusts in line with supply. Given that in 2013
France's official unemployment rate was 9.8%, job demand was greater than
supply.
To re-establish equilibrium on the labor market and thus create the conditions for
full employment, it would have been sufficient to abolish the Smic, which
appears to be a brake on job creation. By reducing the cost of labor, abolishing
the minimum wage would have created jobs.

⮚ The rigidity of the labor code

The second cause of rising unemployment is the rigidity of the labor code. The
ideal labor market is one in which an employer is totally free to hire or fire an
employee according to the pace of his or her business. As dismissal procedures
are relatively restrictive and costly, labor regulations appear to be an obstacle to
business competitiveness, and therefore to job creation.
If the redundancy procedure were simpler, quicker and less costly, companies
would prefer to hire employees on permanent contracts rather than on fixed-term
or temporary contracts. As the rules governing redundancy procedures are the
same for all employees
countries with high levels of labor protection are likely to have high
unemployment rates.

⮚ Mismatch between supply and demand

The third cause of unemployment is the mismatch between job supply and
demand. The sectors of activity that are said to have difficulty finding staff are
catering, hotels, business services and personal services.
The hard-to-fill jobs would be those of cleaners, home helps, domestic staff, care
assistants, waiters, dishwashers and kitchen helpers, etc... These jobs are often
paid at the minimum wage, have "forced" part-time working hours, require no
qualifications and offer no prospects for the future.
If employers in these sectors are really struggling to find staff, not because of the
law of "supply and demand", all they have to do is make these jobs more
attractive by offering higher pay and working conditions than in other sectors.
Instead of upgrading these jobs, Medef criticizes the conditions under which
jobseekers are compensated, which would make unemployment more attractive
than work. As the back-to-work allowance is too generous, it is said to be
responsible for an imbalance in the job market, and therefore for the rise in
unemployment.

⮚ Government policy
Government policies, such as labor market regulations, fiscal and monetary
policies, as well as trade policies, can have a significant impact on the
unemployment rate.
For example, excessively restrictive regulations can discourage companies from
hiring, while economic stimulus policies can encourage job creation.

⮚ Demographic factors
Demographic changes, such as population ageing or international migration, can
also influence unemployment. By
For example, in some countries with ageing populations, there may be a
shortage of labor in certain sectors, while in others, migration may create
tensions on the labor market.

⮚ Technological change
Rapid technological progress can make some jobs obsolete, while creating new
jobs in emerging fields. Workers whose skills are no longer in demand in the
modern economy may find themselves unemployed, unless they requalify for
the new jobs.

The consequences of unemployment

Unemployment has many direct consequences. They affect purchasing power,
household debt, the breakdown of social ties and the loss of health for
jobseekers.

⮚ Loss of purchasing power

The first consequence of unemployment is loss of purchasing power and
household debt. Unemployed workers lose 25% of their income, which
decreases the longer they are unemployed. At the end of the unemployment
benefit period, the only income the unemployed receive is the RSA (revenu
de solidarité active).

If the household has taken out a mortgage or consumer credit, this loss of
income can lead to overindebtedness. Stopping payment of bills and loans
triggers collection proceedings, seizure of assets and, ultimately, eviction
from the home.

⮚ The loss of social ties

The second is the loss of social ties. As the company is the employee's main
place of socialization, the loss of a job is accompanied by the loss of the network
and professional ties that enable socialization. The devaluation of
Being unemployed has a profound influence on a person's self-image and self-
esteem. Despite the free time at his disposal, the unemployed person does not
feel worthy of taking advantage of it to experiment with new activities that
would enable him to create new social links. The shame he feels leads him to
isolate himself from family and friends. By withdrawing into himself, the
unemployed person upsets the balance of his family life.

⮚ The mental and physical health of jobseekers

The third concerns the physical and psychological health of the unemployed.
Since an individual's identity, social status and meaning in life are closely linked
to the daily practice of a professional activity, long-term unemployment risks
causing a collapse of personality and psychological equilibrium.

Lacking the temporal reference points needed to structure their schedules and
the rhythm of their lives, the unemployed are confronted with idleness, anguish
and existential emptiness. The discrimination associated with unemployment
can also lead to a loss of self-esteem.

The shame and guilt it provokes are often accompanied by a lasting state of
stress that the individual cannot avoid or cope with. Escape from this emptiness
and state of stress can lead to violent or compensatory behavior: alcohol or drug
abuse, or addictions (video games, television, Internet, sex, etc.).

⮚ Increase in delinquency and crime

The first indirect consequence is an increase in delinquency and crime. Most of

those convicted of theft, trafficking or violence suffer from the precariousness
and social exclusion associated with unemployment. A study published in 2000
showed that one prisoner in seven has never held a job, and one in two is or has
been a blue-collar worker, compared with one in three in the general
population.[18].

Faced with the difficulty of finding a job, a young person from a disadvantaged
background can easily fall into delinquency. There is also a correlation between
rising unemployment and rising delinquency.
 ⮚ Impact of unemployment on current employees

The second consequence concerns the impact of unemployment on current

employees. It's not just the unemployed who are affected by rising
unemployment. It also affects all employees who are "lucky enough to have a
job". Rising unemployment fosters a climate of insecurity in the minds of
employees, who are afraid of losing their jobs.

To avoid unemployment, depending on their hierarchical level, employees can

use a variety of avoidance strategies: submit to orders, contribute to the "dirty
work", accept the deterioration of their working conditions, enter into
competition with their colleagues and not get involved in collective social
demands.

Fear of unemployment prevents social movements from mobilizing to fight

against the deterioration in working conditions: wage stagnation, flexibility,
reform of the Labor Code, break-up of the social system, etc...

Solution approach

The State can provide financial assistance to the unemployed by paying benefits,
but above all it can combat unemployment through various interventions:

⮚ by reducing t h e labor supply (lowering t h e retirement age, early

retirement).

⮚ reducing legal working hours to 35 hours.

⮚ organising working hours to allow greater flexibility (support for the

development of part-time work, modulation according to the number of
hours worked).
needs).

⮚ by reducing the cost of labor to encourage companies to create jobs (lower

charges on low wages).

⮚ by developing the training vocational training to

improve qualifications.
To solve unemployment, a number of measures need to be put in place. Firstly,
it is essential to invest heavily in education and vocational training to ensure that
workers acquire the skills needed to meet the needs of the modern labor market.
Secondly, governments must adopt pro-growth economic policies, such as
investment incentives, tax reforms and measures to stimulate entrepreneurship.

At the same time, active labor market policies, such as outplacement programs
and employment subsidies, can help the unemployed get back into work quickly.
It is also important to promote labor market flexibility while guaranteeing job
security for workers.

Finally, international cooperation and the promotion of fair trade can help create
an economic environment conducive to job creation on a global scale. By
combining these measures, it is possible to effectively reduce unemployment
and promote inclusive economic growth.