In France, company creation is going up, but job creation is going down


no-vacanciesIn an effort to stave off unemployment, President Sarkozy created the ‘auto-entrepreneur’ status in 2008. Seen by some as a new wave of pro-business politics in France, by others as a simple way for Sarkozy to create a fasle dip in unemployment (auto-entrepreneurs are not technically unemployed, despite the fact that, as we know now, many make less than 1000€/month). Four and a half years later, it seems that this miracle job-and-company creator has had an effect. INSEE, the French institute of public statistics published a report[FR] which shows that, while individuals are creating more companys than ever (a 5% increase in the creation of auto-entrepreneurs), job creation is going down. Companies just aren’t hiring.

France’s unemployment looks pretty bad these days – 12% overall and about 25% for individuals under 25 (that’s me!) – and if you believe anything from our Rude Business angel, who said “Jobs are a collateral result of Investment,” then you know that things look rough in France. While the labor and executive unions fight it out to see who will give up less, nothing is really getting done, and while Hollande promised that 2013 would be the year he tackled unemployment, the figures just don’t add up. Peugeot is now being blocked from letting off employees, while Bouygues is being clockblocked from staving off its 100s of layoffs with a new iPhone5-compatible 4G network.

With this news, it is clear that, while tech startups may be on the rise in France, with over 200+ venture deals made in 2012, it seems that companies just aren’t hiring. Bad news for France, and bad news for startups. If the French government hopes to pull out of this unemployment tail spin, the answer isn’t new reforms or, worse, new jobs in the government – the answer is enabling companies to hire ( & fire) more easily.