The measurement is far from having enabled them to create “300,000 jobs” raised initially by the government, according to France’s Strategy.
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The tax benefit granted by François Hollande to the companies he had the expected effects ? A report from France Strategy, an organization attached to the prime minister, provides some of the answers to this question on one of the main economic measures of the presidential mandate, the tax credit for competitiveness and employment (CICE). This device, implemented in 2013, is a credit of contributions on wages below 2.5 times the minimum wage (smic), of 4 % in the first year, and 6 per cent. Here is what we know of its effectiveness.
1. For employment, results below the promises
Foster new jobs, lowering business costs, it was one of the first goals set at the YEAR of its establishment. Michel Sapin, minister of labour, emphasised the creation of ” 300 000 jobs in the next two years “ on BFM TV and RMC November 28, 2012.
In practice, the monitoring committee of the YEAR of France Strategy considers ” likely “ that the measure has helped create or save ” 50 000 to 100 000 jobs “ on the years 2013 and 2014. Attention, it is only an estimate : one of the two studies conducted by the organization concludes that the creation or saving of 45 000 to 115 000 jobs, the other to the absence of impact. France Strategy judge the first more accurate, because it has taken into account a larger number of factors.
in any case It seems that the reality is, in the case of employment, well below the initial expectations of the government. Interviewed by The World on Wednesday 28 September, Michel Sapin, has said that” it’s clear that the companies have started to re-create jobs that, from 2015. The expected effects of the CICE on investment and exports do not materialise only in the longer term “.
With a high estimate of 100 000 jobs saved or created nearly 30 billion euros in budget over the period 2013-2014 (in cruising speed, the annual budget will be € 20 billion per year), the performance of the YEAR may seem paltry (300 000 euros per job). This, however, would be reductive, since the companies were able to use the envelope for other reasons.
2. The investment has not (yet ?) advantage
the Second goal of the YEAR : to foster investment. Again, the effects are slow to be felt, according to France Strategy :
” At the end of the second year, no observable effect on investment, the R & D and exports. There is general agreement that no effect of the CICE on the investment, R & D and exports is visible on the horizon of short-term (2013-2014) on which are conducted the assessments. “
The committee of the SIEC has held this result to ” rugged “, but states that it is not surprising. He adds that he will have to wait for the years 2015 and later to judge the effectiveness of the measure.
3. A “positive effect” on the margins of the companies
The CICE had a positive effect on the short term finances of the companies that have benefited from it, write the experts, who note a ” significant improvement in margins “. To what extent ? Hard to say, according to the monitoring committee. The evaluation work have, nevertheless, struggled to make up the difference between the evolution of the margin rate of businesses according to whether they have benefited or not from the device.
France, Strategy in advance that this situation could be explained by the fact that ” the significant effects of the YEAR have passed starting in 2013, and 2014 by price adjustments, that is, between companies, if this impact mainly concerns the prices of intermediate consumption, which is for the benefit of the household, if the price of the goods and services they consume have been lowered. “A phenomenon all the more complicated to observe that the beneficiary companies do not have to justify their use of aid.
4. No real boost to the wages
As for employment, the two groups that have evaluated the impact of the CICE disagree on its consequences on wages. The first (the one that concludes that positive effects on employment) said that the remuneration were not extended. The second (the one who has not seen creations or backups jobs), there was no evidence of a beneficial effect on the wages ” head “, but see one on the hourly wages. At the end of 2015, the BOARD felt that the YEAR had led to a pay rise of 1.1% in the target companies.
Some feared that the SIEC could have a perverse effect by blocking salaries to 2.5 times the minimum wage. In fact, beyond that, the remuneration is not eligible for the tax credit. According to France Strategy, this has not been the case.
It will have to wait several more years to see if the SIEC is actually poorly effective or only slow at startup. For the time being, most of the estimates seem to effects on employment, much lower than the 300 000 positions mentioned initially.