The Job Market

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In an Industrial Corner of France, 18,000 Jobs Are On Offer. Why Aren’t People Taking Them?

By Liz Alderman

OYONNAX, France — Along a vast alpine plain, hundreds of factories are cranking out plastic perfume bottles, automobile parts and industrial tools. Trucks chug through mountains ferrying thousands of ready-made wares for export. On billboards and warehouses, “We’re hiring!” signs flutter in the breeze.

Jobs are plentiful in Ain, a sprawling manufacturing region in eastern France known as “Plastics Valley.” But companies in this forested frontier across from Switzerland have slowed production because they cannot find enough workers for a production line that increasingly requires computer and digital know-how.

“It’s a brake on competitiveness,” said Georges Pernoud, the president of Groupe Pernoud, whose company makes injection molding for plastic parts for BMW and other automakers. He said he has turned away contracts worth nearly a million euros in the past two years because he couldn’t find skilled people here or anywhere in France who wanted a factory job.

“We need more tech-savvy employees,” Mr. Pernoud said, pointing to a glass-encased robotic machine on his factory floor programmed by a worker to produce a precision steel mold. “But not enough people are willing to take these jobs.”

France, like many countries in Europe, has a labor problem. But in a nation where thousands of people took to the streets in the Yellow Vest movement to protest income inequality and a lack of economic opportunity, there is a peculiar twist.

Despite an unemployment rate of over 8 percent — the highest in Europe after Italy, Spain and Greece — over a quarter of a million jobs are unfilled. Businesses can’t find people to work as plumbers, engineers, waiters, cooks. The list goes on.

Nowhere is the challenge as stark as in manufacturing, where nearly 40 percent of companies cite a dearth of manpower. In Ain, which specializes in making plastic goods and machinery parts, at least 18,000 jobs are on offer.

France needs a solution quickly. After recovering from a double-dip recession during the financial crisis, the economy is slowing again, this time from a 1.7 percent expansion as Europe’s recovery cools. Manufacturing isn’t contributing as much to growth as it could because of the labor problem, Agnès Pannier-Runacher, France’s economy minister, has warned.

She recently began a campaign to enhance the industry’s appeal, featuring a 20-foot inflatable plastic rooster, a symbol of French pride. The rolling caravan, called the “French Fab” tour, showcases factories as hubs for high tech.

Employers say manufacturing has an image problem after decades of cheap competition from Asia and Eastern Europe shuttering factories across France. The industry has shrunk to 10 percent of the economy today from 25 percent in the 1960s. Recent factory closures at Ford, Alstom and Whirlpool have added to an image of woe.

Labor unions say the issue is not a shortage of workers, but that companies pay low wages and then complain about a lack of labor. If companies increased pay, unions argue, they would find employees.

Others say France’s predicament is more complicated.

“The real problem is that French industry is still not as modernized as elsewhere in Europe,” said Patrick Artus, the chief economist of Natixis Bank, based in Paris. “That has lead to low productivity, which prevents companies from raising salaries,” he said. Manufacturers need to ramp up investments, he added.

President Emmanuel Macron is trying to clear roadblocks, in part by modernizing the national vocational system. Only around a third of French students pursue vocational training or apprenticeships, which are seen as leading to unprestigious work in a country that prizes academics and white-collar careers.

By contrast, in Germany, Europe’s manufacturing powerhouse, the industry is seen in a positive light. Around half its 16- to 24-year-olds enter apprenticeships that include hands-on work at Siemens, Daimler and other name brands. In France, manufacturers say, the training is less intensive and no longer produces enough people with skills for the current crop of jobs.

Mr. Macron’s reform lifts the age limit for apprenticeships to 30 from 25 and makes it easier for people to qualify for and keep them. The government also plans to reimburse companies for apprentice work contracts. One million low-skilled job seekers and one million young people from disadvantaged backgrounds will be offered training in digital technologies. France’s generous jobless benefitsare being tightened to return people to the work force more quickly.

But in Ain, and elsewhere, the efforts aren’t producing results fast enough.

This area became a hub for plastics-making in the 1920s when companies made fashionable combs and hair accessories. Activity expanded after World War II as demand for plastics, tools and machinery drove a surge in manufacturing.

Oyonnax, one of Ain’s biggest cities, grew wealthy as the factories expanded. In the early 1980s, locals recall, the largest concentration of Ferraris in France was found here.

But French industry proved no match for globalization and did not adjust to competition from countries with lower labor costs and tax rates. Europe’s financial crisis forced companies to modernize quickly. French factories are now scrambling for programmers and coders to run increasingly automated machinery. “We’re struggling to convince people that the work isn’t the same as decades ago,” said Damien Petitjean, the director of the Lycée Arbez Carme, the main high school in Oyonnax.

The plastics industry in particular faces a hard sell, said Mr. Petitjean, as concerns mount over the environmental impact of a throwaway culture.

The Oyonnax school once specialized in training for industrial jobs. In the 1970s, it shifted to a general curriculum, mirroring the decline of manufacturing. Today it has swung back to offering technical diplomas, working in partnership with companies and research institutes.

Yet only half its 1,100 students pursue such degrees, Mr. Petitjean said. And last year, only 40 entered the plastics industry.

Pay is one big reason.

Industrial salaries have risen gradually for the last 20 years and increased about 2 percent last year. Still, entry-level workers earn just a couple hundred euros more than France’s monthly minimum wage of 1,521 euros a month. Small and medium-sized businesses, the backbone of French industry, say they can’t offer more because they must make a hefty contribution toward France’s social safety net, which provides health care, education and unemployment.

“In France, employer taxes amount to 40 percent of a worker’s salary,” said Stéphane Vandenabeele, the managing director of UNT, which makes precision tools for eyewear and watches. He recently lost a skilled employee to a competitor in Switzerland that offered nearly twice the 2,800 euro after-tax salary he paid. With Swiss employer taxes of just 12 percent, he said, he couldn’t match the price.

Employers in Plastics Valley try, increasingly, to poach workers from other companies or devise creative workarounds.

Mr. Pernoud, the producer of plastics injection molds, hired a technician from Portugal to fill one of a dozen openings at his 110-person operation. Although he pays up to 3,000 euros a month for engineers, there are few takers. But that’s good money in Portugal, where the average monthly wage is around 1,900 euros, Mr. Pernoud said. He hopes to hire four more — quickly.

“I have no choice but to look abroad,” he said. “I can’t develop my business otherwise.”

Ten minutes away, PRP Creation, which makes plastic cosmetics containers for luxury groups including Dior, Chanel and Estee Lauder, has found a partial solution by placing job ads on Facebook, Twitter and LinkedIn.

The chief executive, Joël Viry, said many of the 175 jobs on his floor are on a classic production line. He attracted workers by establishing good managerial relations. The son of a boilermaker, he regularly walks the floor to converse with employees, who include older workers and over 30 nationalities. At any given time, at least 40 young people on interim contracts work in the factory to gain experience.

Mr. Pernoud, the producer of plastics injection molds, hired a technician from Portugal to fill one of a dozen openings at his 110-person operation. Although he pays up to 3,000 euros a month for engineers, there are few takers. But that’s good money in Portugal, where the average monthly wage is around 1,900 euros, Mr. Pernoud said. He hopes to hire four more — quickly.

“I have no choice but to look abroad,” he said. “I can’t develop my business otherwise.”

Ten minutes away, PRP Creation, which makes plastic cosmetics containers for luxury groups including Dior, Chanel and Estee Lauder, has found a partial solution by placing job ads on Facebook, Twitter and LinkedIn.

The chief executive, Joël Viry, said many of the 175 jobs on his floor are on a classic production line. He attracted workers by establishing good managerial relations. The son of a boilermaker, he regularly walks the floor to converse with employees, who include older workers and over 30 nationalities. At any given time, at least 40 young people on interim contracts work in the factory to gain experience.

“This is our future,” said Mr. El Hmidi, nodding at the factory floor, where workers were monitoring computer-powered machines. He had already rotated through the other four factories that had combined forces with LMT Belin. “Here, we’re getting exposure to new technologies,” he said.

For Mr. Lefevre, it was a small victory in a larger battle for economic survival.

“We can’t just keep complaining there’s no one to hire,” he said. “We have to make it happen ourselves.”


NYTimes
 
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  • Iron Maiden

    Iron Maiden

    Paragon of Bacon
    Orange Room Supporter
    The worst is still to come, the more digitized society will become the more labour problems it will create. Education and training are way behind the industrial base needs.

    And all the trained foreign workers flocking from around the world will end up costing their countries years of economical stagnation.

    Teach your kids how to code people
     
    Mrsrx

    Mrsrx

    Somehow a Member
    Staff member
    The worst is still to come, the more digitized society will become the more labour problems it will create. Education and training are way behind the industrial base needs.

    And all the trained foreign workers flocking from around the world will end up costing their countries years of economical stagnation.

    Teach your kids how to code people
    Or how to pretend to code www.hackertyper.com !!! F11 and magic happens...made a career out of this website :lol:
     
    Picasso

    Picasso

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    How a Strong Job Market Has Proved the Experts Wrong

    Neil Irwin

    Conventional wisdom seems to have been too pessimistic about how much the economy could grow before setting off inflation. In hindsight, a costly mistake.

    There are a lot of good things to say, and few bad things to say, about the November employment numbers that were published Friday morning.

    Employers added 266,000 jobs, a blockbuster number even after accounting for the one-time boost of about 41,000 striking General Motors workers who returned to the job. Revisions to previous months’ job counts were positive. The unemployment rate fell to 3.5 percent, matching its lowest level since 1969.

    Other numbers were less evocative of a boom time. The share of the adult population in the labor force ticked down, and average hourly earnings continued growing at only a moderate pace, up 3.1 percent over the last year — but it feels churlish to complain when the big-picture numbers are so good.

    Still, there is a bigger lesson contained in the data, one that is important beyond any one month’s tally of the job numbers: that the American economy is capable of cranking at a higher level than conventional wisdom held as recently as a few years ago. As the economy continues to grow well above what once seemed like its potential, without inflation or other clear signs of overheating, it’s clearer that the old view of its potential was an extremely costly mistake.

    The mainstream view of the economics profession — held by leaders of the Federal Reserve, the Congressional Budget Office, private forecasters and many in academia — was that the United States economy was at, or close to, full employment.

    In January 2017, for example, nearly three years ago, the Congressional Budget Office forecast a 4.7 percent unemployment rate as far as the eye could see, and it projected that the United States labor force would consist of 163.3 million in 2019. The jobless rate has averaged less than 3.7 percent through the first 11 months of the year, and the labor force now stands at 164.4 million people.

    The Federal Reserve likewise was too pessimistic about the potential of American workers; in projections three years ago, the consensus view of its leaders was that the unemployment rate would average 4.5 percent in the final months of 2019. If that forecast had materialized, 1.6 million more Americans would currently be unemployed than actually are.

    They also expected their target interest rate to be around 2.9 percent — reflecting rate increases they believed would be needed to head off inflation. Instead, that interest rate is around 1.6 percent, and you have to squint to see signs of inflation.

    If you go back even further, to the late Obama years, there was an even more pessimistic tone about the outlook for American workers embedded in the fine print of both public and private-sector forecasts.

    If we knew then what we know now, it would have had big implications for what seemed like sensible policy. The United States probably didn’t need to reduce budget deficits the way it did between 2013 and 2016, now that we know how much untapped growth potential there was. The Fed probably didn’t need to raise rates as quickly or as much as it did.

    There are clear signs that Fed leaders are starting to internalize these lessons, and are now more open-minded to letting the economy run and seeing just how many people can be put to work and how much wages can rise before it causes inflation or other problems.

    And markets seem to be getting that message. For years, whenever there has been a strong jobs report like the one issued Friday, markets viewed it as hawkish for monetary policy — as tilting the balance toward more interest rate increases. But this time, analysts and financial markets seemed to take the big-time job growth numbers in stride, given that they weren’t accompanied by any signs of ill effects from the low unemployment rate and strong growth.

    People often say that this expansion, now in its 11th year, is growing long in the tooth, or that we are late in the economic cycle. And maybe that’s right. But the biggest lesson when you contrast where the labor market stands at the end of 2019, versus where smart people thought it would stand just a few years ago, is that there’s a lot we don’t know about just what is possible and how strong the United States economy can get.

    Neil Irwin is a senior economics correspondent for The Upshot. He is the author of “How to Win in a Winner-Take-All-World,” a guide to navigating a career in the modern economy.


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