In order to increase the proportion of employed senior workers, it has been suggested to cut their and their employers’ social security contributions. That proposal deserves attention, since it acknowledges the necessity of raising the senior workers’ employment rate, still very low in France. But such a policy may be flawed and in the context of the pension system reform one may think twice before implementing it. (in French)

It seems that politicians have short memories. Almost exactly thirteen years ago, a freshly elected cabinet tried to change the rules setting the French minimum wage so that young and low skilled workers could be hired at a discount wage. Soon dubbed "minimum wage for youths", it sent thousands of college and high school students in the street and was quickly withdrawn by the then Prime minister Edouard Balladur. A remake of this bad movie is currently shot in Paris: the french prime minister Dominique de Villepin is confronted with a new generation of students rejecting a law introducing a more flexible labour contract with a two-year trial period for young workers. The endgame is likely to be the same as in 1993, in my view.

During his seasonal greetings to the press, President Chirac revealed that he had asked the cabinet to review the tax base of employers' social contributions. The reform he proposes would penalize capital intensive industries relatively to labour intensive ones; in the long term, it would backfire.