The latest INSEE figures confirm a worrying trend: the unemployment rate in Réunion reached 19.6% in Q1 2026, up 2.6 percentage points year on year. The island now records France's second-largest unemployment increase, behind French Guiana (+2.7 points). Yet salaried employment remains stable. This apparent paradox reveals a complex structural dynamic.
The Full Employment Law Paradox
How can unemployment surge while salaried employment does not fall? The answer lies in the implementation of the Full Employment Act, which came into force in early 2025. The law requires welfare recipients (RSA) and a portion of young people to register as jobseekers, mechanically inflating the active population — and thus the unemployment rate — without sufficient job creation to absorb the inflow.
The result: 62,100 registered unemployed by end-2024, a figure that continued rising into Q1 2026 as the participation rate increased but job openings remained insufficient to meet demand.
A Persistent Structural Gap with Metropolitan France
For context, the national unemployment rate stands at 8.1% — a gap of 11.5 points with Réunion. The island's employment rate, measured in late 2024, does not exceed 52%, versus 69% nationally — a 17-point gap. These figures are not new, but their persistence questions the effectiveness of overseas employment policies.
The construction sector remains particularly hard hit: it shed 1,200 jobs in 2024, plus 700 further cuts in construction-related temporary work. A double blow for a local economy struggling to diversify its growth engines.
Why It Matters
Réunion's unemployment rise does not stem from mass job destruction, but from a statistical effect generated by national reforms not calibrated for overseas territories. It is precisely this mismatch — between national policy and local realities — that represents the real problem. For Réunion businesses and policymakers, the signal is clear: without Outre-mer-specific measures, the paradox risks becoming permanent.