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According to Google translation from Le
Monde, October marks the 18th consecutive month of rising unemployment. A
second article from Le Monde discusses the Rise in Unemployment for October.
Unemployment has risen sharply again in October. According to statistics released Wednesday, November 27 by employment
center and the Ministry of Labour, the number of applicants for employment who had no activity during the month (Class A) increased by 46,500 people, including
DOM. In September, he had jumped nearly
47 000 people. Worse, counting
the unemployed reduced activity (category B and C), the increase reached 73,600 people!
Such explosion had not
been seen since March
2009. With 4,870,800
people registered at employment center, the number
of job seekers Class A, B and C reached
a level never seen before, as far back as statistics. For those in category A, the level was not as high for fourteen years, in May 1998. Since the
accession of François Hollande at the Elysee Palace, very bad numbers keep
on coming: nearly 230,000
people have registered at
employment center and since
May.
In detail, it is over 50 years old who suffer
most from the increase in October, with nearly 2% increase in a month for this category. Rising long-term unemployment is still very high, with nearly 11.5% of registered job seekers concerned about one year.
French Unemployment vs. US Unemployment
Those outside France need a bit of perspective on various
classes of unemployment cited
above. This is my understanding, pieced together from two different
sources.
·
Class A: Jobless
people that have had no activity at all during the past month.
·
Class B: Jobless
people having worked less than 78 hours during the past month ("short reduced activity")
·
Class C: Jobless
people having worked more
than 78 hours during the past month ("long reduced activity").
·
Class D: Looking
for a job, but currently sick,
or in internship, or in state-sponsored
"professional development"
courses, etc
·
Class E: Those
in state-sponsored low-pay
"community service" jobs
The official unemployment rate only
comes out quarterly.
Reader Andrea offers these
comments ...
For the sake of clarity,
the official unemployement rate is
given by the National Institut of Statistics
(INSEE) each three months, not the ministry of labor class A-E activity. The
distinction is similar to
the weekly unemployment stats in the US vs. the official monthly
unemployment and jobs report.
Moreover, and also similar to the US, many jobless people are not counted
as unemployed because they have not been actively searching for a job.
Hollande Threatens to Nationalize
Steel Plants Over Layoffs
Economic insanity in
France continues at a steady
pace. The latest bit of insanity
is Hollande's Threat to Nationalize Steel-Maker Mittal.
French President Francois
Hollande has met the owner of steel
giant Arcelor Mittal, after saying he would discuss
nationalising one of its
plants.
Arcelor Mittal - which employs some 20,000 people across France - announced in October that it intended to shut down the Florange plant's already inactive furnaces, saying they were
uncompetitive in such difficult trading times.
The company gave the government
60 days in which to find a buyer
for the furnaces, a deadline which
expires on Saturday.
The move provoked an angry
reaction from the French government, which accused Arcelor Mittal of breaking a 2006 commitment to keep the blast furnaces running
- a claim denied by the steel
giant - and criticised
the firm for refusing to sell off the site as a whole.
France's minister for industrial recovery, Arnaud
Montebourg, accused the steelmaker
on Monday of "lying"
and "disrespecting" the country. He has since retracted a remark that Arcelor Mittal was no longer welcome in France.
Economic Ignorance Wins
the Day
Pater Tenebrarun blasted
the nationalization threat
in his post Economic
Ignorance Wins the Day Again
in France.
France's minister
of industrial insanity,
Arnaud Montebourg (sometimes referred
to as 'Mountebank' in these
pages, for obvious reasons)
once again proves that the leopard cannot change its spots. After wrangling incessantly with Arcelor-Mittal over its decision to close two long idled and evidently loss-making steel furnaces, he has now decided to openly declare war against the company.
Here is a brief summary of the economic facts of life for the
hyperactive minister:
There is vast overcapacity for steel in the
world. In China alone, some
200 million tons of production capacity appear to be the fruit of malinvested capital due to China's
real estate and infrastructure bubble
that has resulted from an unhealthy credit boom. This means that in China alone 200 million
tons of production are likely loss
making at present and will eventually have to be idled and/or liquidated.
It makes no sense to keep loss-making capacity going in Europe as well. That will only further misdirect scarce resources that are more urgently required elsewhere.
The very last thing the market economy needs in order to function smoothly is a 'minister of industrial renewal' (Montebourg's official job description), or any other type of 'economy minister'. The very best thing such ministers could do to help the economy would be to resign
immediately.
Property Rights
Thrown Under the Bus
Montebourg makes it sound as though Arcelor-Mittal, a private company, were deputized to the French government
to help it fulfill whatever political aims it pursues
– as though the government
could simply draft private companies to aid it in attaining its socialist goals.
This case is going to
have repercussions that
go far beyond the fate of the loss-making
furnaces and Mittal's continued presence in France.
By threatening the company
with nationalization if it doesn't comply
with the government's wishes, Montebourg is signaling that his government has absolutely no respect for property
rights.
If Mittal closes the two furnaces (which as noted above have been idled for many months already), then the people employed there will lose
their jobs which is of course unfortunate. However, this is a typical case of the road
to hell being paved with good intentions: by threatening the expropriation of Mittal,
Montebourg ultimately risks
far more jobs than merely
those at the two furnaces.
There is a lesson that Mr. Montebourg has yet to absorb: No government can dispense with the laws of economics by decree. It might as well attempt to order the sun not to shine or issue an edict that gravity be abolished.
Expect Unemployment
to Soar
Those looking for reasons French unemployment is going to soar,
need only read Pater Tenebrarum's
sterling rebuttal of France's
plans to nationalize Mittal
to save steel jobs when the world is awash in cheap steel.
What company wants to hire workers when they will be
unable to fire them later if need be?
I talked about this many times before, but in case you missed it,
please consider my June 8th article Hollande About to Wreck France With Economically Insane Proposal: "Make Layoffs So Expensive For Companies That It's Not Worth
It"
Industry Minister Arnaud Montebourg is also planning legislation that would force companies to sell plants they want to get rid
of at market prices to avoid closures and job losses.
Four Things, All of Them
Bad
1. Mass layoffs will
occur before the law passes.
2. Companies will
move any jobs they can overseas.
3. Ongoing, if it's
difficult to fire people,
companies will not hire them in the first place.
4. Corporate profits will
collapse along with the
stock market should the need to fire people arise.
The proposal to force companies
to sell plants rather than fire workers
as outlined by Industry Minister Arnaud Montebourg and Labour Minister
Michel Sapin is nothing
short of economic insanity.
Europe Going
Downhill Fast
Many people doubted
Hollande would be foolish enough to carry out his job threats. They were wrong.
In addition, Hollande massively hiked
various taxes and also seeks a financial transaction tax.
Such actions prompted my June 16 report, "France Has At Most Three Months Before Markets Make
Their Mark" .
No one should at all be surprised to learn in early November that France suffered the sharpest fall in service sector business
activity for a year. For details, please see Dreadful Economic Data in Germany, Italy, Spain, France.
Things are going downhill fast in all of Europe
and the bottom is nowhere near in sight.
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