Sunday, December 23, 2012

France Pins Hopes on really dumb Youth Jobs Plan

This is typical French thinking. Take taxpayer money to subsides some feckless youth for three years while demanding companies keep old workers they don't need.

PARIS—Diana Delanghe has four years of study and a degree in retail management, but she will spend the run-up to Christmas doing something she never trained for: wrapping gifts in a Paris department store.

"I had been out of work for a while so I had to accept something," says Ms. Delanghe, 23 years old, who finished a temporary contract in human resources in October. Her gift-wrapping contract will last only three weeks.

Ms. Delanghe's résumé is like that of many French young people, toggling between temp jobs and out-of-work periods. Among French youths between the ages of 15 and 24 seeking jobs, only one in five succeeds in signing the long-term contracts that come with strong protection against dismissal, according to the French government.

Socialist President François Hollande has come up with a plan to ease the problem: give €4,000 ($5,276) a year for three years to small companies that hire a young person on a permanent contract while committing to keep an employee age 57 or over.

Companies with more than 300 employees won't receive financial incentives, but will face sanctions if they don't negotiate agreements with their employees that include targets for the employment of young and older workers.

The French government hopes as many as half a million youths will find permanent jobs over the next five years due to the measure, which could cost the government about €1 billion a year when it is in place.

Economists say the number of real new jobs is likely to be much lower because the government will be subsidizing jobs that would have been created anyway. Only around 100,000 new jobs will be created, according to OFCE, an economic-research think tank in Paris.

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