LDN - Business

You're hired! France's Macron targets apprentices in labor market shake-up

[November 03, 2017] By Caroline Pailliez

SAVIGNY-LE-TEMPLE, France (Reuters) - In a warehouse outside Paris, university drop-out Celine Galland stacks palettes and fills out an inventory sheet, part of a logistics apprenticeship she hopes will put a decade of short-term contracts and unemployment behind her.

France's jobless rate has sat stubbornly above 9 percent for nearly a decade. President Emmanuel Macron blames a notoriously rigid labor market and has two ideas to change it: more vocational training for school leavers and making it easier for workers to retrain and change jobs.

On Nov. 10, his government will open talks with unions, business leaders and the regions on how to reform the apprentice system, cutting through its bureaucracy and financing.

The former investment banker promises an extra 15 billion euros ($17 billion) for professional training over five years, but beyond the money he will need to counter public prejudice if he is to reverse a slide in apprentice numbers.

University did not sit well with Galland, who quit after several weeks. Since then the 31-year-old has worked at menial jobs in McDonald's and local supermarkets.

"What I love about this is the variety of tasks," she enthused last week at an AFTRAL logistics and transport training center in Savigny-le-Temple, east of Paris. "There's no boredom in this job."

France's unemployment rate is more than double Britain's and several points higher than Germany's. Particularly troubling for Macron's centrist government is youth unemployment - nearly one in four 15-24 year olds are without a job, according to official data, a major drag on long-term growth.

Macron has already defied union-led street protests to loosen labor laws, necessary he says to make hiring and firing workers cheaper and easier for small companies.

Leftist opponents and hardline trade unions accuse him of abandoning France's long-cherished ideals of an egalitarian society to side instead with corporate interests.

But the 39-year-old president is standing firm. He promises greater support for workers through an overhaul of training and a revamped welfare system, pointing to the Nordic model of flexibility in the labor market underpinned by security through the social welfare system.

He will, though, need to overturn a widely-held perception that apprenticeships are a poor alternative to school and university diplomas, which France obsesses over.

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French apprentice Milouda Chahed, 19 years old, poses in a training area at ''AFTRAL'', a transport and logistics training centre, in Savigny-le-Temple, southeast of Paris, France, October 26, 2017. REUTERS/Gonzalo Fuentes

"We have to put an end to French defeatism, to people saying that apprenticeships are for those who have failed," Macron said this month while visiting a college.

DECLINE IN APPRENTICESHIPS

France's existing apprenticeship system involves the signing of a contract between the apprentice, the employer and the training institution. Students earn a percentage of the minimum wage and gain workplace experience, while companies can source talent and receive welfare payment waivers.

France lags behind numerous European peers. OECD data from 2016 shows 4.9 percent of French youths aged between 16 and 29 completed apprenticeships in 2012, compared with 8.6 percent in Denmark and 15.1 percent in Germany.

As a recovery in the euro zone's second biggest economy gathers strength, employers complain they cannot fill vacancies despite the near double-digit jobless rate because of a skills gap - a mismatch Macron says apprenticeships can help fix.

"Our figures have shown a clear trend for several years: 80- 95 percent of our apprentices are in jobs within six months of finishing," said Pierre de Surone, director of the Savigny-Le-Temple training center. "Apprenticeship works!"

While the number of higher education apprentices is rising, the number of youngsters gaining college-level apprenticeship diplomas fell to 260,000 in 2016 from 335,000 a decade ago, Education Ministry data shows.

That presents a challenge for Macron. Data published by Cereq, a French government think-tank, shows apprenticeships boost the employability of individuals with low academic qualifications more than for those at higher education grade.

"We don't value practical jobs, technical jobs. If we don't give recognition to these jobs then we're in trouble," said Gabriel Schumacher, director at a local distribution company.

(Writing by Richard Lough, Editing by William Maclean)

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