Emmanuel Macron recalled Thursday evening, during his press conference, his objective in the medium-term unemployment: the wear to 7% by the end of this five year period, that it wishes to succeed, “furiously”. It was a promise flagship of the candidate. He took the opportunity to present a second objective, which is not directly related to its mandate this time: to reach full employment in 2025. And if France knows nothing of unemployment rate below 7% for the last forty years, it is necessary to go further to find figures that could be compared to a situation of full employment, according to the definition ascribed to this notion. So, what is the president of the Republic when he mentions this subject?
Follow the step of the 7%
This question often remains unanswered. Of course, the full-employment does not suggest in any case a rate of unemployment to 0%. For cause, the labour market is in perpetual motion and a zero rate could only be achieved, sustainably, or not. However, it can approach, and many economists and other institutes agree on the fact that their definition of full employment can only be achieved with a lower unemployment rate to 7%, precisely. This is what says Philippe Waechter, chief economist at Ostrum Asset Management, which is the threshold as a “first step”. “The question of full employment in France is complicated because we have never been, this is a topic that we do not know so let’s go already to this objective, and try to keep us there”, he commented.
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The figure that emanates from the work of William Beveridge, and that can be found in the work of Jean Pisani-Ferry is another example. In a report often re-used on the topic, entitled “full employment”, published in 2000, the French economist draws Us to define this concept as “a situation where the number of vacancies is greater than the number of candidates for a job and where the places are such and located in such a way that unemployment is reduced to short intervals of waiting”. In this way, Beveridge led to unemployment, full-employment of 3%. By adjusting the calculations, Jean Pisani Ferry, answered, him, to a figure between 3.5 and 4%. However, there may be a bias in these figures, depending on the country and the social situation of each of them. That is why Insee offers neither a statistical response, or definition to this question. The full-employment could be “the threshold at which inflationary pressures on wages may appear”, is merely there to indicate to us. “We would like to, reacts Philippe Waetcher, but that doesn’t work, either in the United States, Germany or Japan. This threshold does not allow to generate wage pressures. The labour market at the level of intermediaries has changed,” outbids it.
7%, never-before-seen in France since the late 70s
it was the Same story on the side of the international labour Organization (ILO), which explains that the full-employment meets three criteria: the work to all the people who wish to work and who are seeking work ; that such work is as productive as possible ; that there is the freedom to choose the job that best suits according to their skills. The ILO evokes the figure essential of 5% to meet all of these conditions.
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Another definition, more academic, yet, full employment would be the employment level when there is that unemployment frictional (period of unemployment between work contracts) or structural (related to changes of economic structures) and no cyclical unemployment (linked to the evolution of the economic activity). In the end, the president of the Republic to imagine likely to an unemployment rate around 5% when he evokes the full-employment to 2025, while taking into account “the structural unemployment is very important in our country.” This figure has not been seen since the late 1970s. Philippe Waechter concludes: “The important thing, if one reaches it, is mainly to maintain that level.”
