Why the Valls plan for SMEs will not change (almost) nothing

THE ECO SCAN / EXPERT REACTIONS – This week, Manuel Valls announced a series of measures to encourage small businesses to hire. Here are the opinions of five economic and labor specialists.

This week, in very small businesses and SMEs (small and medium-sized businesses). 18 measures were announced, including an exceptional bonus of 4,000 euros for the hiring of a first employee, the capping of the compensation paid by labor tribunals to employees (in the event of unfair dismissal), the possibility of renewing two both a fixed-term contract, a three-year freeze on the obligations imposed on companies that cross staffing thresholds, etc.

A pro-business plan (), and which generates a. If it was, they will. Here is what several specialists in the economy and labor have to say about it.

• Marc Touati, economist and president of the ACDEFI cabinet


“We feel that Manuel Valls wants to make an effort to give oxygen to very small businesses, but he continues to offer relatively expensive and inefficient measures, while France needs shock therapy, especially on its market. work. 4000 euros bonus? This is good, but it is still very little compared to the overall cost of labor in France and the rigidities of the job market. It would be much more effective to massively reduce the charges weighing on wages and the fiscal pressure exerted on companies unconditionally. And this, both for very small businesses and for all French companies. In addition, to the extent that growth remains too weak and too fragile, companies will have no other choice but to remain cautious and limit their hiring, for fear of not being able to reduce the wing in the event of a further slowdown (very probable) of the activity. “

• Hélène Baudchon, economist for France at BNP Paribas

Helene Baudchon

“Despite the new advances and the good ideas, the government continues to take small steps, which limits the effects to be expected from this plan. In addition, this type of measure takes time to produce effects and their deployment will be spread over time, between the second half of 2015 and 2016, which also dilutes the impact. As regards, for example, the aid of 4000 euros for the first hiring, it is appropriate in the event that the cost of labor is effectively the obstacle to hiring. But the positive effect to be expected from it is minimized by its limited duration. And this aid will have no effect on very small businesses which do not hire for lack of growth. The emphasis must be on stimulating activity (it is growth which conditions hiring) rather than on new financial assistance, especially since the cost of labor has already affected the market. ‘subject of multiple and recent reductions. In the current context, the need for new financial assistance is not in fact immediately obvious. ”

• Matthieu Plane, economist at OFCE

Matthieu Plane

“These measures remain small measures, which will not revive the mechanics of work: they are not announcements on a lasting fall in the cost of labor. This will change at the margin. If it was enough to offer measures to relaunch employment, that would know. So much the better for the few companies who intended to hire, and who will be able to take advantage of a bonus. But overall, these announcements on VSEs and SMEs will have marginal effects. To boost employment, the cost of labor must be permanently lowered, especially by attacking low wages. Let us not forget that France, which has a dynamic demography, welcomes on its labor market, each year, some 150,000 young workers, who inflate the unemployment figures. Obviously, a strong policy on low wages must be designed to avoid falling into what is called the “low wages trap”, which consists of only hiring below a certain level of wages. “

• André Zylberberg, economist specializing in the labor market, on the bonus of 4000 euros for the hiring of the 1st employee

André Zylberberg Vincent BLOCQUAUX

“Based on economic studies, we know that lowering the cost of labor creates jobs if this drop takes place on low wages, around the minimum wage to be more precise. The bonus of 4000 euros corresponds to a fall in the cost of labor, except that it is not targeted on low wages. It therefore risks causing significant windfall effects. The possibility of having three fixed-term contracts in a row, instead of the current two, introduces a -small- dose of additional flexibility in the labor market. It could result in additional hires. But it worsens the segmentation of this market between permanent contracts and all other precarious contracts. Suddenly, we capped severance pay, which makes the CDI more flexible since the employer will now know how much he is likely to pay at the maximum. But the judge always retains the possibility of pronouncing on moral damage suffered by the employee … who, him, is not capped! “

• Christian Parisot, chief economist at Aurel BGC

Christian Parisot

“Certain measures reduce uncertainties about hiring or give companies a little more flexibility in managing their workforce. They can accelerate and facilitate the recovery of employment but they will never be a motor for job creation. Without visibility on their order books and / or strong work flexibility, current growth is unlikely to be very job-creating as in Anglo-Saxon countries. French companies limited their layoffs during the crisis. Mechanically, they will hire less with this economic improvement. On the other hand, faced with significant uncertainties about global growth, the recent recovery in order books will not immediately translate into a resumption of investments. Companies will prefer to resort to overtime or achieve productivity gains, rather than hiring.