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“Beware of unemployment figures which could fall, but they are misleading”, warns Eric Heyer of the OFCE



The decline in the number of job seekers “is surprising”, said Tuesday, October 27 on franceinfo Eric Heyer, director of the analysis and forecasting department of the OFCE (French Observatory of Economic Conjunctures), while the number of category A job seekers fell by 11% in the third quarter of 2020 On the other hand, over one year, it increased by 8.8%.

“Beware of unemployment figures which could fall, but they are misleading”, Eric Heyer alert. “Overall, there is a transfer effect” job seekers “to categories B and C”. According to him, what is “very astonishing is that since the beginning of the year, the French economy has destroyed more than 800,000 jobs. And unemployment has only increased by 375,000”. The economist sees this as a sign “a declining working population”. “This means that the unemployed did not take up a job, but left unemployment by the back door, not even considering themselves unemployed. It is very worrying “, says Eric Heyer.

This is called the unemployment halo. That is to say, globally there are a large number of people, just over 400,000, who finally got discouraged, went out of the workforce and got off the radar. And that’s not a good thing.

Eric Heyer, director of the analysis and forecasting department of the OFCE

franceinfo

Eric Heyer also notes that “the partial activity made it possible to limit job losses”. “When you do subsidized jobs, young jobs, that allows this category to progress less. We saw it in the third quarter, young people saw their unemployment rate drop.”

But the economist draws attention to “a small substitution effect on the less young”. According to him, “It does not make either a policy which makes it possible to lower unemployment in general, but rather a category of unemployed”. He believes that it will take “looking at the year-end figures with much more concern”. The third quarter of 2020 was “pretty good” in terms of growth. “We’re going to do roughly over 16% growth in the third quarter.” But he expects “to a drop in activity at the end of the year and also probably at the beginning of the year, next year”. So there is a “future adjustment on employment, with business failures which could increase at the start of 2021. There is nothing good, from this point of view, in terms of job creation”.

Eric Heyer still sees these figures as an effect of the Covid-19 health crisis. “There is still an increase in unemployment of almost 400,000 unemployed, it is not nothing.” If companies “have not gone out of business”, thanks to “to loans guaranteed by the State” and to “deferral of charges”. But these helpers will have to “be reimbursed”. “This means that if the activity were not to pick up again at the end of the year and at the beginning of 2021, then the failures could increase.” According to OFCE evaluations, “There would be 80% more failures next year compared to a normal year, which would destroy roughly 160,000 jobs.” Eric Heyer is sounding the alarm bell: “Be careful, the impact of the crisis is still before us.”

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