Mind the gap

For nearly a decade the French have grown used to living with roughly a tenth of their workforce out of a job. Any glimpse of an improvement in unemployment figures usually makes headlines. François Hollande, the previous president, regularly claimed to have spotted an imminent downturn in the jobless rate, only for it to prove illusory. So what seems to be happening in the French labour market now feels rather unfamiliar: there are lots more jobs, but a growing shortage of qualified people to fill them.

France’s unemployment rate fell to 9% in January, a rate which, though still almost as high as Italy’s, is better than it has been for ten years. In 2017 some 200,000-330,000 job offers went unfilled, mostly for lack of suitable candidates, according to Pôle Emploi, the French government’s jobseekers’ service. Last year employers judged nearly two-fifths of recruitment “difficult”, an average that masked far greater trouble in certain sectors. The agency reported problems filling 84% of jobs for machine operators, 80% for carpenters, 65% for butchers, and 63% for computer engineers. “Significant difficulties” have appeared in France (as in Spain), “despite high unemployment”, notes Patrick Artus, chief economist at Natixis, a French bank.

The good news is that France is at last creating more jobs. This is partly thanks to a broader economic recovery in the euro zone. After years of torpor, growth in GDP in France should reach 2% in 2018. Hiring has also been encouraged by President Emmanuel Macron’s labour reform, passed last September, which lowers the risk to employers by simplifying redundancy procedures. The bad news is that a skills gap may now be opening up, which could put upward pressure on wages and limit how far unemployment will fall. Poor skills, as Mr Artus points out, are the main explanation for a high level of structural unemployment in OECD countries.