PARIS, France — The French government wants companies to hire young people so much that it’s offering to pick up the tab.
The new Socialist president, Francois Hollande, told his Cabinet on Wednesday that he wants to wage a war on unemployment and unveiled a plan for the government to pay most of the salaries of tens of thousands of young people hired next year.
Unemployment in France is 10 percent overall and nearly 23 percent for those under 25.
That’s an imbalance many European countries are struggling with. Spain’s youth unemployment is over 52 percent; Italy’s is 34 percent.
European employers are reluctant to hire young people because restrictive labor laws make it hard for companies to lay off employees.
What’s more, in France, young people are typically required to do a series of often unpaid internships before landing a full-time job or can only manage to get short-term contracts for years on end.
But few countries are approaching the problem in the way that France is. Italy and Spain have proposed modest tax breaks for companies that hire people just entering the workforce but have focused more on fundamental labor market reforms market that they hope will address the root causes.
Under France’s new plan, companies that hire a person between 16 and 25 for at least a year will only have to pay as little as 25 percent of the salary. The government hopes to create 100,000 of these “contracts for the future” next year and another 50,000 in 2014. It has promised to continue paying its share of the employee’s salary for three years.
“We are waging a battle for jobs,” Hollande told Cabinet ministers, according to government spokeswoman Najat Vallaud-Belkacem. “It’s the No. 1 challenge of our mandate.”
Some economists were skeptical of the approach.
“Making the structures of the economy more competitive and better performing is what really has to drive the thinking,” said Nicolas Veron, an economist affiliated with the Brussels-based think tank Bruegel and the Peterson Institute in Washington. “It’s not about targeted programs; it’s about the structure of the (labor) market.”
