“We are already starting to see certain limits”: Why limiting unemployment benefits to two years could be (very) expensive

“We are already starting to see certain limits”: Why limiting unemployment benefits to two years could be (very) expensive
“We are already starting to see certain limits”: Why limiting unemployment benefits to two years could be (very) expensive

One of the key points of the MR and Engagés program during this electoral campaign concerned getting people back to work. For both parties, one of the means which would make it possible to achieve an employment rate of 80% by 2030, as planned, consists of eliminating unemployment benefits after two years, while guaranteeing more targeted support from the CPAS.

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The objective? Avoid making job seekers fall into dependence, knowing that the cost of the “unemployment and career interruptions” budget for the federal government represents 6.2 billion and that 48.3% of fully unemployed people receiving unemployment benefits have been there for 2 years and more, according to Statbel figures. In the Engagés’ proposal, it is precisely explained that at the end of a period of unemployment of two consecutive years, any job seeker will automatically be offered a work contract in the public or associative sector, taking into account their profile. and his training path.

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This measure does not seem surmountable for the state budget.

The job seeker may also request to convert his unemployment benefit into start-up aid for one year if he proposes an entrepreneurial project which will be deemed viable by a bank. If the job seeker refuses, he or she would lose his or her unemployment benefits.

Unemployment: the failure of a system

If the two parties of the future majority are unanimous on this idea, many economists are skeptical about the feasibility of this reform. This is the case of Philippe Defeyt, of the Institute for Sustainable Development (IDD), who points out in advance that the measure was not proposed to be quantified by the Federal Planning Bureau. “First of all, it must be said that this measure will generate a very significant costhe explains. If we assume that the jobs offered are full-time, that the salary used is the current guaranteed average monthly minimum income (i.e. €2,070.48/month) that 90% of the unemployed people concerned accept the job, the others refuse or take the launch aid, returning 90% of unemployed people of 2 years and over to paid employment would cost, in total net, a little less than 850 million per year.

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“We set the bar much too high”

According to the economist, the application of this measure could even cost the State even more given that integration income must be taken into account for some of those who refuse the job offered and that the minimum salaries in the public and associative sectors are significantly higher.

“With this proposal, we have set the bar much too high and as it stands, it does not seem surmountable for the state budget. The Committed propose to make savings of 10 billion but it will be necessary to find enough to finance this proposal, he continues. Obviously, it will take time to deploy this approach. And then another question arises: as long as we are not able to offer a job to all those who would have agreed to enter this system, how do we “treat” the long-term unemployed who are find themselves de facto on a “waiting list”? Are we going to apply the principle of degression?”.

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Without “matching” between supply and demand, there is also a risk of seeing an increase in the referral of long-term unemployed people to the CPAS, particularly for certain profiles of isolated workers who have been disconnected from the world of work for several years. years. The question of the geographical distance between the place of residence and the proposed job also arises. It is difficult to imagine that an unemployed person with family responsibilities would have to accept a job that requires a two-hour train journey or the purchase of a car that he cannot afford to get to work.

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The other question that arises is where and how to find more or less 115,000 jobs in the public or associative sectors? Especially when we know that the president of the MR and that of the Engagés believe that the public sector is already overloaded. “I really have doubts about the ability to create so many jobs in these sectors with all that that implies and without affecting existing employment, without forgetting the risk of creating duplicate jobs, replies Defeyt. The net cost to the budget is likely to be greater given that highly subsidized jobs would be substituted, at least in part, for less or not at all subsidized jobs. They wanted us to believe in a serious presentation but we are already starting to see many limits appear”.

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