French businesses that hire a person aged between 16 and 25 for at least a year may only have to pay as little as 25 percent of the individual’s salary starting from 2013, reported Reuters on Wednesday, after the government, under socialist president Francois Hollande, announced a new jobs plan that hopes to create up to 150,000 jobs for youths throughout the country.
The plan, dubbed the “jobs for the future” program, targets the nation’s high youth unemployment rate, which at 23 percent is far higher than the national average of 10 percent.
Hollande, who has promised to wage a “war” against unemployment, has also promised to continue paying its share of the employee’s salary for three years; and said that preference under the scheme would be given to young people hired from poor urban or rural areas.
"We are waging a battle for jobs," Hollande told Cabinet ministers, as cited by the Associated Press. "It’s the No. 1 challenge of our mandate.”
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According to AP, French employers have traditionally been reluctant to hire young people as restrictive labour laws make it very hard for companies to lay off their employees. The new proposal by Hollande though will now need to make its way through Parliament, where Hollande's Socialist Party has a solid majority.
"This is not about fixing the numbers," claimed French Labour Minister Michel Sapin, who emphasised that the focus of the plan would be on creating long-term jobs and professional training.
Nevertheless, the new scheme has its critics from economists to opposition politicians, who balk at the estimated $2.9 billion cost of the program in 2013 alone.
"It would be great if these jobs really offered the perspective of a radiant future for all who will benefit from the them, but I'm afraid that's not certain," told Laurence Parisot, head of the MEDEF employers' union, to Europe 1 radio.
“The jobs for the future are only a Band-Aid, if a necessary Band-Aid, in the face of a government that every day shows itself more incapable of overcoming the difficulties our country is confronted with," added Guillaume Cairou, president of the Club of Entrepreneurs and CEO of strategy consultancy DIDAXIS, to AP.
"How can they not see that this cost is extremely high for the government, even while we should be reducing our deficit?"
Still, Sapin defended the plan, claiming that only drastic action would prevent France from creating a "lost generation" of people that grow isolated from society after failing to acquire a job after graduation.
Sapin claims that the scheme will create 100,000 jobs in the public sector and 50,000 in the private sector by 2014, while the cost of the program would be offset by ending certain tax exemptions.
"In some of our neighbourhoods, more than 40 percent of youths are unemployed - and it's these people we want to help so they can emerge from their struggle," he said.