You can get more money if you’re unemployed in France than if you work minimum wage

Heard on the French radio the other day (Les Grosses Têtes) that a guy did some research between a family that was unemployed (neither parent working) and a family with two parents working minimum wage.

His findings?

The family that was unemployed, ended up with 1100 EUR a month after expenses.

The family working minimum wage ended up with almost 50% less at 600 EUR a month after the (same) expenses.

(I tried Googling for this study so I would be able to provide numbers, but alas my French is not that strong.)

Can you believe this?!?

Why the hell would anyone bother working in France at minimum wage?

Just so they can buy a cellphone or an iPad? Who cares!? The country is essentially paying you to NOT work, and making your unemployed existence as cushy as possible.

It is a far better deal to be unemployed.

Reasons for this are that France will basically help you …

pay for your rent if you are unemployed
allow you to have a pass on income taxes (obviously, no income = no taxes)
allow you to have a a pass on your HOUSING taxes (wtf!?)*
have programs for subsidized entertainment (museums are cheaper, so are cinemas)
give you money to buy food (no food stamps, this is actual cash for food as I am told)
give you subsidized transportation (or pay for it entirely) so you can go to job interviews (*snort*)
..and of course healthcare is a non-issue there (even more so than in Canada)

*UPDATE (10:56 a.m. EST October 24th 2013)

The maximum time for the benefits is 730 days or 2 years on unemployment, but you can just go back to work for a short period, and go BACK on the dole system for another 2 years. Wash, rinse, repeat. (Source)

UPDATE: (1:15 p.m. EST October 23 2013)

Big thanks to Vanessa for pointing out 2 articles worth reading:

“In practice, France’s welfare system is a failure, and there is an economic explanation for this.

Welfareship does not create wealth; there are no incentives to create wealth.

Despite its good intentions, welfareship has created a “poverty trap.”

In France’s Welfare State Status Quo, Are We Seeing America’s Future? (breaks down the numbers)
The Work versus Welfare Trade-Off: 2013

33 responses to “You can get more money if you’re unemployed in France than if you work minimum wage”

Charles@gettingarichlife

November 6, 2013

This type of disincentive is a major reason why France doesn’t product great companies or products in a large amount. It seems like the French are trying to make up for all the bad shit from Les Miserable.

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1. save. spend. splurge.
  
  November 6, 2013
  
  I’d disagree with that only because in fashion, LVMH (Louis Vuitton Moet Hennessey) is one of the most profitable, largest companies in the world that do a LOT of business.
  
  France has very good points, they just can’t get their economy together. They need to help and promote those who are working to encourage them to be more risk-taking, more “American” if you will, and to stop being such bleeding hearts.
  
  Reply
Stefanie @ The Broke and Beautiful Life

November 5, 2013

I assume you had to have had a full time job for at least a certain amount of time and have been laid off (not quit) to get these benefits. That’s how it works in New York at least. I’ve been struggling to find full time work and the unemployment system essentially penalizes me for working part time while I search for my next full time gig. It’s incredibly frustrating.

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1. save. spend. splurge.
  
  November 6, 2013
  
  It’s for about a year I think that you need to work, and then they give you 2 years to “get back on your feet”. You can just wash, rinse and repeat the cycle.
  
  Also if you have kids, you don’t even need to work, or find fake work. You get a LOT Of benefits with having each subsequent child.
  
  Reply
MelD

October 26, 2013

Just a note: both the Germans and the French complain that what was 1,- FF (French Franc) or DM (Deutsch Mark) became 1,- EUR and it’s simply not true. The cost of living rose, of course, exchange rates with the CHF (Swiss Franc) and USD (US Dollar) alter and they FELT as if it was 1:1 but in all honesty, it just wasn’t (I have German relatives and friends, we live 20 minutes from the German border and have spent every summer, at least, in France since 1991…). I keep hearing this myth from French and Germans (…and Italians and Spaniards and any other EURO country you care to name!!) but it’s all about perception and the human reluctance for any kind of change, least of all that forced on them by politicians. I would probably feel the same but it’s incredibly subjective when you’re in the situation.
Otherwise, I agree that many countries have a totally skewed policy re. dole/low wages, it’s pretty crazy (in this respect, I’m most familiar with Switzerland and the UK).

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Tania

October 23, 2013

Well, I’d be curious if there is a time limit. There is in the US and how much you have worked affects your maximum payout in total as well as per check. So you cannot collect unemployment forever as you’ll run out of benefits so it’s not a viable option to being employed. I really don’t know much about welfare I admit, am more familiar with unemployment benefits. It is interesting to hear how other countries social programs work and it’s effects, intended and unintended.

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1. save. spend. splurge.
  
  October 24, 2013
  
  @Tania: Maximum is 730 days or 2 years. (Source)
  
  The only thing is that then you can just go back to work for a bit (not sure how long before you qualify again, I’m sure there’s a loophole), and then go BACK on unemployment for another 2 years.
  
  Reply
  1. Michael
    
    August 24, 2019
    
    In fact this is written in the source page you provided:
    “One day of work equals one day of allowance”
    
    So you need to work the same amount of time to receive the allowance (which is capped by 2 years)
    
    Reply
Pauline @RFIndependence

October 23, 2013

I did a post on how my sister is worse off working full time as a single mum than staying home with her daughter, over half her salary goes to rent and she would get more disposable income with subsidized housing. That is ridiculous.
Re housing tax there are two taxes, taxe d’habitation that is for garbage disposal, street lightning and so on, that you get an exemption on if you are on benefits, and taxe fonciere if you own your place, there is no exemption as they consider you could sell your place if you needed cash.
You get a FREE bus pass in Paris including all suburbs (worth over $100), the Louvre, Versailles and most state museums are free, the swimming pool and tennis courts are free, etc. Money for food is rare, but there are also “social supermarkets” where you get heavily discounted food.

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1. save. spend. splurge.
  
  October 24, 2013
  
  @Pauline @RFIndependence: I think going from francs to euros really, really ruined France. BF is always so sad when he goes back and sees how people are living there. He feels bad for all of them, and outraged at the prices on their behalf (and ours, as we’re on a budget!). Then we hear family members really get angry over how their lives have changed since the euro… it’s a hot mess.
  
  Ahh! I see. Thanks for the clarification on the housing taxes. I thought it was kind of weird.
  
  Free.. FREE PASSES. Oh god. We don’t even get that here.
  
  Reply
Ariana Auburn

October 23, 2013

My jaw dropped. I have seen this same type of situation happen in the US. A lot of women whom I used to work with choose to become “baby factories” because the state paid more in welfare after having 3 kids than working full time. And these were single women wanting to become single moms.

France is pretty generous with its system. Almost makes me wish switch citizenship. Almost.

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1. save. spend. splurge.
  
  October 24, 2013
  
  @Ariana Auburn: Isn’t that crazy? You can just make money having children as long as you can have them.
  
  Reply
Eva @ Girl Counting Pennies

October 23, 2013

It seems to me this is the approach the government is taking here in the UK too. My unemployed friend has been on benefits for well over a year, and she is in no rush to find a job. She gets her house paid for and the weekly allowance is around £80, I think. If you land a job interview, the government will also reimburse your transportation costs to/from interview. So why bother?…

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1. save. spend. splurge.
  
  October 24, 2013
  
  @Eva @ Girl Counting Pennies: No rush to find a job. I think that lack of urgency is what is making people complacent and I am not sure I blame them.
  
  Reply
moneystepper

October 23, 2013

Since my time in France, I have actually been impressed with the incentives that they provide to encourage people to work. €7.60 a day for lunch paid for by the government, 10 “RTT” days per year (holidays additional to bank holidays in order to spend with your family, etc etc). I think a lot of this has been ignored in order to sensationalize the reports linked.

Also, people should work the minimum wage for future benefits. This is firstly in your career. The more you work, the more you meet people and the more opportunities arise to move away from the minimum wage. Secondly, your state retirement benefits are also much better if you spend your working life in employment rather than living on benefits.

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1. save. spend. splurge.
  
  October 24, 2013
  
  @moneystepper: Well that €7.60 is now being used by employees (called “ticket restos” or restaurant tickets) to buy food. We have family who saves up their ticket restos and buys meat with it once a month. Without those tickets, they wouldn’t eat meat.
  
  I think a lot of it has not been ignored, because companies are paying a lower minimum wage as pointed out by Matthew below, BECAUSE of things like ticket restos, and the fact that you can’t just fire someone at-will like in the U.S., because you have to compensate them at least 3 months.
  
  These are actual French people who are living and working there, not Americans who are talking about the system, who are calling it ridiculous and far too generous.
  
  (See Pauline’s comment above as well, as she did the same comparison with her sister’s situation in France)
  
  There was even an article I read a while back.. gosh I wish I saved it, about students graduating from university, working a bit, then going on government dole because it was more money than if they kept an actual job. NEW GRADS are doing this too.
  
  Lastly, what you’re saying about minimum wage works in the U.S., but the culture in France is once you are in minimum wage, there is very little chance for upward mobility because if you aren’t from one of the big schools (business, engineering, etc), you aren’t considered worthy of a higher position.
  
  Everything hinges on degrees there. The name of the school REALLY matters, and that closed educational system is one of the good and bad things about France. It’s far more open in the U.S. and Canada where you are able to work your way up, lowly degree or not.
  
  Reply
SP

October 23, 2013

It is actually sort of the same in the US, if you are let go from a relatively high paying job.

Here in Cali, the maximum weekly benefit is $450. The minimum wage is $8/hr, so $320 a week if you work 40 hours. But I’m not sure if you would be eligible for food stamps, etc. And benefits are limited in time. And you have to search for new work. And it is taxed.

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1. save. spend. splurge.
  
  October 23, 2013
  
  Is it 2 years before they cut you off?
  
  This is a comparison of minimum wage workers only. I am sure it is far cushier if you are let go from a higher paying job in France.
  
  Reply
  1. SP
    
    October 23, 2013
    
    Minimum wage workers get more unemployment than they get income? That sounds incorrect, but I’ll have to check out your reference links before I believe it 🙂 It sounds like they are comparing welfare to minimum wage? I think welfare is a little different.
    
    The normal cut off is… 26 weeks. But it is / was much higher during the economic crisis. I think they are phasing that out. It may have approached 2 years.
    
    Reply
MatthewChat

October 23, 2013

The problem is not that the unemployment benefits are too high – they are set to reasonably support a family. The problem is that the corporations have wrangled minimum wage way too low. Who can support a family on 600 euros a month? (around $1000 a month american) That wouldn’t even cover rent on a one bedroom apartment in NY, much less food, medical care, and clothing for a family.

The French government has had to make up for the rabid profiteering of the corporations, and take care of the “working poor”.

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1. save. spend. splurge.
  
  October 23, 2013
  
  They COULD support a family on 600 EUR before, that’s the problem.
  
  The conversion of Francs > Euros is what killed the cost of living. It was 6 FRF to 1 EUR, and since they converted everything, now everything is 1 EUR but before it was only 1 FR, so they’re paying 6.5X more.
  
  600 EUR then, would be 3900 FRF which was more than enough back then (think of each FRF as a dollar).
  
  No, the French government is just wasting money left and right, and not cutting these people off from milking the system. I’m all for helping families get back on their feet, but this is just ridiculous.
  
  Reply
Debbie M

October 23, 2013

I don’t know about France, but in the US, unemployment compensation is considered income and is taxed.

Do they not check that you are job hunting or improving your education?

Is there a culture there that makes people really, really not want to be unemployed? Or is the bureacracy you have to deal with to get these benefits time-consuming, dignity-consuming, or otherwise costly?

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1. save. spend. splurge.
  
  October 23, 2013
  
  In France I am told it is not considered income because it’s money you need to live, therefore you are taxed.
  
  OR, it is that it is so low, you don’t get taxed.
  
  I think they “check” you are job hunting but .. not really.
  
  The culture there is also that companies do not want to hire people because it costs a lot of money to fire them — they have to pay 3 months severance at a minimum, and a lot more (in YEARS) if you are in a higher-up position.
  
  People are just seeing it’s a better deal to NOT work than it is to work. I mean why would you, if you can “make” more money by not working?
  
  Reply
CorianneM

October 23, 2013

I’m not that surprised. In the Netherlands there are also many of these supporting measures, though I believe considerably less generous than in France and some things are being abolished. One example is student support. I received about 250 euros a month and free public transport card. This system is being converted into a full-loan system next year though. Right now I still get 90 in rental subsidy and 70 for health insurance. It’s nice to get the support, but in the future I would not want to be dependent on these things. Governments and policies change, things can’t stay the same forever.

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1. save. spend. splurge.
  
  October 23, 2013
  
  I’m just concerned that they can’t bloody support this system going forward, and it is just going to collapse spectacularly.
  
  Reply
Vanessa

October 23, 2013

I CAN NOT get google.fr to work here :/ Anyways, here are two related articles that you might enjoy: http://www.cato.org/publications/white-paper/work-versus-welfare-trade and http://www.forbes.com/sites/realspin/2012/12/07/in-frances-welfare-state-status-quo-are-we-seeing-americas-future/

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1. save. spend. splurge.
  
  October 23, 2013
  
  OOOO! Merci. 😀
  
  Reply
Liquid

October 23, 2013

“Some people make a living just having children.” Zut alors! Not saying being a parent is easy or anything, but that’s pretty generous of the French government. Surprisingly their federal budget deficit is still lower than that in the U.S.

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1. save. spend. splurge.
  
  October 23, 2013
  
  Being a parent is definitely not easy, but I can tell you that 3+ children gives you some major tax breaks. EVERY couple we know, aimed for 3 kids.
  
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GetRichWithMe

October 23, 2013

its exactly the same situation in the UK
though for the vast majority of people on benefits life is not easy
its just that there are some people who are VERY good at playing the system

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1. save. spend. splurge.
  
  October 23, 2013
  
  In France, apparently children are the ticket to a cushy existence. That, and being “divorced” but living together after your divorce (your divorce is just in name only).
  
  Reply
Clarrise @ Make Money Your Way

October 23, 2013

All I can say is WOW!! I want to move to France now. Seriously their government are not corrupt that’s why they can afford to help the unemployed people.

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1. save. spend. splurge.
  
  October 23, 2013
  
  Actually, their government is more corrupt than what it appears to be. They’re very good at wasting money and paying politicians.
  
  I can’t remember the exact statistic, but someone we met in France who is really pissed off at Hollande said that there are over 600 (or was it 6000!?) politicians for a country the size of France (65 million) or something like that, compared to the U.S. which is at 316 million, but with far less at around 500 politicians for the entire country.
  
  Reply