Wolf Richter www.testosteronepit.com [6] www.amazon.com/author/wolfrichter [7]
Ugly unemployment numbers are politically inconvenient in democracies. Red-faced politicians have to come up with excuses, and entire elections can be lost over them. So, every country has implemented inscrutable statistical systems to make unemployment look better, or less disastrous, regardless of what realities on the ground may be.
France, which has one of the most generous (and expensive) unemployment compensation systems in Europe, does that too. But it also has an administrative tool at its disposal: removing tens of thousands of people every month from the unemployment compensation rolls for spurious reasons. There is even a term for it: the “politics of removal.”
Like every country, France has a slew of reports that attempt to shed light on, or obfuscate its unemployment fiasco. The two most mediatized: the survey-based report by Insee [8], which includes the headline unemployment rate; and the report by the unemployment office, Pôle Emplois, which is based on the number of people receiving unemployment compensation. And that raw number is a huge deal in France.
So, when Pôle Emplois released the December numbers on Friday, Labor Minister Michel Sapin—he who let it slip during a radio interview that France was “totally bankrupt [9]“—stepped into the limelight. And patted the government on the back: after 20 consecutive months of sharp deterioration, unemployment had deteriorated again, but only a little bit.
“I can see the sign of an economic activity that isn’t as degraded as some say,” he mollified [10] his jittery compatriots. And with regards to the economy: “We’re not in a collapse,” he said confidence-inspiringly. The “cumulative employment policies” undertaken by the government might even lead to a rebound in the second half, he ventured.
Why his morose optimism? Pôle emploi reported that at the end of December, there were 3,132,900 people receiving unemployment compensation in continental France—not counting the overseas departments. A mere 300 more than in November. Not bad, in a year when 284,600 unemployed had been added to the rolls—a 10% jump.
Including the underemployed, the number rose by 10,200 in December to 4,627,000 people. An all-time record. Those unemployed for over three years exceeded the half-million mark. Another all-time record. “This stability is significant,” Sapin explained.
Alas, it would have been even worse: the number of people removed from the rolls for administrative reasons had jumped by 25%. It had the effect of beautifying the unemployment situation. The “politics of removal,” critics call that practice.
On average, 41,300 people per month were yanked off the list in 2012, and 8,000 were added back to the list the following month. But it wasn’t just another new thing that François Hollande’s government finagled to put lipstick on a dire situation. In 2007, 50,000 people were removed every month, according to a report [11] that Jean-Louis Walter, the mediator of Pôle Emploi, will present to Sapin on January 31.
It’s not just a statistical game: unemployment compensation to these people is also cut. So Walter advocates limiting the abuses of these removals. And he wants to eliminate one category that made up 15% of the removals: failure to show up for an appointment at the unemployment office. “To systematically consider the failure to appear as a refusal to fulfill one’s obligations,” he said, is exaggerated, in particular for such sporadic and involuntary reasons as someone being “ten minutes late for a meeting.”
Part of the problem is that it’s difficult to reverse that decision. Once the perpetrator who was “ten minutes late for a meeting” is pulled off the list, he’d have to explain by registered mail why he was late. There are “legitimate [12]“ reasons for missing a meeting at the unemployment office, such as a court appearance. But it’s the employment office that decides, and the Kafkaesque appeals process is stacked against the applicant. Complaints of abuses have been endless—such as a guy having been pulled off the list though he made it to the meeting, but the counselor didn’t!
Walter wants a fairer scale of penalties and a better process. The system should be reformed for pragmatic and human reasons, and people should be removed “only for just cause,” he said. But reform would also “address the ‘politics of removal’ that are used to limit the explosive rise of the unemployed.”
If implemented, the reform may lead to higher unemployment numbers that surely will inspire Sapin to come up with even more elegant verbal gyrations to explain them. Meanwhile, the French expressed their disdain for their political class by calling for authoritarian leadership, a “real leader” who would “reestablish order.” Read.... Could 87% of the French Really Want A Strongman To Reestablish Order? [13]