PARIS (Reuters) — France's Socialist government is fast-tracking the launch of a scheme to create 150,000 state-sponsored jobs for youths, moving to tackle rampant unemployment.
A cornerstone of Hollande's plan to stimulate job creation through state subsidies, the "jobs of the future" program will offer mainly public sector contracts to poorly qualified youngsters from city suburbs and rural areas at a cost of around two billion euros ($2.5 billion) this year and next.
Echoing an initiative by a previous left-wing government, the scheme has found little support among labour economists and employers, some of whom argue it is costly and offers few guarantees of long-term employment.
But Labour Minister Michel Sapin said the focus would be on creating long-term jobs and professional training. "This is not about fixing the numbers," he told a news conference.
Nearly one in four French youth are out of work.
Parliament will convene for a special session on Sept. 10, two weeks earlier than planned, to examine the program, a government spokeswoman said on Wednesday, two days after jobless claims spiked to their highest level in more than 13 years.
Hollande hopes the scheme will give him a boost after a run of opinion polls in recent days showing his approval ratings tumbling, in one case to as low as 44 per cent, from above 60 per cent after his mid-May election.
Sapin has said that unless urgent action was taken, France risks creating a "lost generation" of people who fail to enter the job market after school and grow isolated from society.
But the new scheme has its critics.
"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," Laurence Parisot, head of the MEDEF employers' union, told Europe 1 radio.
Sapin said the scheme — which will create 100,000 jobs in the public sector and 50,000 in the private sector by 2014 — will cost the state 2.3 billion euros, an amount which would be offset by ending certain tax exemptions.
The government is removing exemptions from taxes on overtime work, overturning a flagship reform of the previous conservative government.
The outlay will factor into the government's calculations as it prepares to unveil its 2013 budget next month under pressure to save some 30 billion euros in order to meet European Union targets for deficit reduction.
One complaint about the plan is that it seeks to resurrect the boom effects of similar schemes used by previous governments — but without their ability to spend enough public money to ensure a real impact on unemployment.
In 1997, then Socialist Prime Minister Lionel Jospin launched a massive youth jobs scheme that brought down joblessness while it was in effect but left it to rise again once it was phased out.
Critics said youths employed in low-skilled jobs, like providing information to travellers in train stations and airports, contributed little value to the economy.
Hollande's government has built in incentives to ensure contracts to help France's 500,000 jobless youths are long term. But economists argue the benefits may be short term, and studies are lacking to determine whether youths on subsidized job contracts keep working after they expire.
In a report published this month, the OFCE economic think-tank estimated Hollande's plan will actually create only 107,000 new jobs while creating a windfall effect for local government and non-profit groups, which will do most of the hiring.
Sapin defended the plan's non-profit focus, arguing that marginalized youngsters would get more benefit from providing services to their community than working for a private employer.
"In some of our neighborhoods, more than 40 per cent of youths are unemployed — and it's these people we want to help so they can emerge from their struggle," he said.
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