IB Econ Macro IA_Unemployment (7/7)

FOR FRANCE’S JOBLESS, MACRON AIMS TO ‘MAKE WORK PAY’ 

PARIS — Franck Provost, a high-profile coiffeur with more than 500 hair salons across France, needed to do some hiring last fall in the central Loire region. But when an associate reached out to 130 unemployed stylists, he said, only two replied.

“There are thousands of hairstylists on the jobless rolls, but we can’t hire them,” Mr. Provost told French television. “Our main competitor is the unemployment office.”

His lament is common among French employers: The nation’s unemployment system, they say, with its lengthy and generous payouts, can sometimes be more attractive than work. France’s powerful labor unions vigorously dispute that. Yet as President Emmanuel Macron revives an ambitious program to overhaul the French economy in the wake of the so-called Yellow Vest protests, he is aiming at a once-untouchable totem. Vowing to “make work pay,” Mr. Macron is preparing executive orders to force through changes to push the unemployed back into the labor market — including the 20 percent who receive benefits that exceed what they were paid while working, according to a government estimate.

Mr. Macron will require a longer work history to qualify for benefits. Welfare checks for previously high-salaried employees will be capped. And in a bid to reduce the number of unemployment claims, companies that rely on short-term contracts will be penalized with higher payroll taxes…