François Hollande did talk too early last wek. The huge increase (+34 900) of the number of unemployed people in July, calculated by Pôle Emploi, has cooled the hopes of those who were thinking that time had come for the unemployment curb to be reversed. The policy followed by Emmanuel Macron predecessor, whose he was his influent advisor at the Elysée, has not produced the results which would allow the late president to be proud of his achievements. That figure is not only very disappointing compared to the previous month but the magnitude of the rise, which affects all categories of jobseekers, put in the shade the modest progress registered since the beginning of the year and even since the last twelve months. Unemployment increased by 1.5% since January 1^st and is slightly above the level reached in July 2016.

A little before, INSEE announced a fall of the unemployment rate for 2017 2^nd quarter to 9.5%, which had provoked many enthusiastic comments among them François Hollande’s one.  That figure had been put in perspective with the high level of job creations and the coming back, in France, to a 1,6% growth rate, level which had not been reached for six years. So, who is right? These numbers are not collected by the same method. INSEE uses a survey with about 100 000 persons but Pôle Emploi, under the supervision of the Labor department, collects, as if it was a census, all the candidates looking for a job. The divergence between their results is not so evident because if so many people are starting again to look for a job, it is because they have a higher hope today than before to get one. It is an indication about the improvement of the economic context which is confirmed by several other indicators.

Especially both institutions are not measuring the same thing. Unemployment rate is a ratio between the number of jobseekers and the active population. If this one grows faster than the number of jobseekers, unemployment rate falls when the number of unemployed people is still growing. It is what the French economy is now confronted with. In other terms, growth is not yet strong enough to generate a level of job creations sufficient to reduce unemployment. It is a progress but it is not yet able to reestablish the optimistic and confident environment which leads to a significant and durable reduction of unemployment. So, what are the reasons of that situation and the choices offered to the government at a moment when the president notices that France would be the only large European country to have failed to cope with massive unemployment, when he doubts about the ability of French people to support a reformist program and when he stays in the logic of the economic policy of his predecessor which has failed, but which he has inspired?

Comparisons are misleading. With England, is it seriously possible to consider that somebody who has a zero-hour working contract has a job? They are more than one million. And all those who have “incapacity benefits”, a system created by Tony Blair to discourage those who have a health problem to look for a job in exchange of a very modest indemnity, aren’t also disguised unemployed?  The German case is more complex and at the origin of a stunning denial. The country has a disastrous demographic situation with a birth rate near 1.3 when France is around 2. Women are discouraged to get fulltime jobs. At last, the Schroeder reforms, especially the last one which created mini-jobs and reduced unemployment benefits, had as an objective to stop a new migration wave from Eastern Länder where unemployment rate was near 18%. SPD, there, was highly unpopular and that would have weakened its position in the west of the country. These measures did not impeach its defeat in the following elections but they were a factor of increased inequalities. At the opposite, a reform, adopted in 1976, went completely unnoticed in France: the appointment of employees representatives in the management boards. That contributed to put a break on de-localizations and costly foreign acquisitions, contrary to what happened in France with enthusiasm. Germans continue to follow the rules Paul Valéry, a century earlier, noticed: to bring back from all around the world toward all parts of Germany a maximum of value. These strategic choices, which are part of a consensus in the country, are obviously not without link with its economic performances, which don’t reflect, when we compare them to ours, cost differences or benefits supposed to be more favorable to French workers. Another example, related to overtime hours, proves that it is possible to have good or bad reforms: in 2007, just before the financial crisis, the French government gave important incentives in favor of overtime hours. When there is a full-employment situation, it makes sense. These incentives which dissuaded enterprises to hire should have been abrogated when the crisis occurred. It has aggravated its impact with a high cost for the State. In Germany, the government made the opposite choice with incentives in favor of part-time jobs, which allowed enterprises to keep their employees until the recovery occurs.

Thanks to the policy decided during 2013 autumn, with the reduction of social charges, enterprises margins recovered, which has been to shareholders and managers advantage. But to respect our European commitments and limit our public deficit, it was necessary to increase taxes on households which has broken growth at the worst moment, sent France into stagnation and provoked the rise of unemployment. That policy did not generate an investment increase, due to the lack of internal demand, and an improvement of the competitiveness of our enterprises, if we look at the deepening of our trade deficit and market shares losses. The reasoning followed at that time was, as in 2007, wrong. It would be surprising if it became right today. On the opposite, no lesson has been taken from the successes regarding employment, of the policy followed between 1997 and 2002, including the reduction of the working time. Even if its application in the public sector was subject to criticism, it is the only period during which, in the same time, France enjoyed growth, a significant fall of unemployment and a surplus in its foreign accounts.

The idea that the reduction of the protections 90% of salaried which have a job have, will permit to the other 10% to get a job more easily is a paradox. It is a game where there is the risk that everybody will be a loser. It is possible to be astonished by the fact that French people hate reforms but it is not surprising because those which have been put in application failed to meet their objectives. The challenge the government is confronted with is to find the appropriate measures to reach the objectives it has adopted and proposed to the French people. Regarding employment, France is in a specific situation: a dynamic demography, a women aspiration to a whole professional equality and an innovation context which is structurally job-destructive, from the autonomous car to services digitalization. The transformation which will permit France to defeat unemployment must lie on new solutions, adapted to that context and not persevere in the mistake which consists in convincing people that the salaried are the only liable for their difficulties. So, the French disease will have been cured.