With inflation and the exchange rate rising, US-based VIEs are struggling to survive, with some laying off their jobs. Faced with this situation, Business France provided exceptional assistance.
“I started my VIE (Corporate Volunteering International) in early April 2022, I was supposed to finish it in September 2023… and I’m stopping at the end of October”, summarizes Hugo*, 28, resident in Detroit (Michigan).
Like him, many volunteers who live in the United States have been asking themselves the question for a few months in view of the inflation, which reached 9.1% in one year in June – the first since 1981. With the fall of the euro against the dollar (as of August 3, 1 euro is worth 1.01 dollars), while VIEs are netted in euros, much of its purchasing power was.
On paper, a VIE allows, between 18 and 28 years old, go to work abroad for 6 to 24 months in a company, with a hiring fee of 92%. A non-taxable allowance is paid, in euros, with a variable part depending on the country or city of exercise, “depending on the local standard of living to cover the volunteer’s subsistence, equipment and housing needs”specifies Business France.
In the United States, therefore, there are six different licenses. The amount is recalculated every quarter “based on two criteria: inflation and exchange rate”, says Christophe Monnier, director of the VIE program at Business France. A VIE cannot be waived except in specific cases, such as a “mutual agreement” between the VIE and the company.
“We all attack our economies”
“I didn’t have to negotiate much because another VIE had come out three weeks earlier,” says Hugo, who resigns mainly for financial reasons. It receives the lowest remuneration, that of “other cities”, in the amount of 2,600 dollars, “insufficient in relation to the cost of living” with inflation and loss in one month of 250 dollars in your salary in exchange rate.
At VIE in marketing in New York, Eliot, he earned 3,500 euros, or about $4,000 when he arrived. he’s getting $3,500 today. “My rent was $1,750 for a shared apartment in the suburbs. It grew to 2,500 in six months!” he witnesses. I get to zero at the end of the month. We all attack our economies.”
in total, 144 US-based VIEs met in a dedicated WhatsApp group and each wrote an email to Business France describing their situation.. Manon*, 23, has also decided to leave her LIFE, which began on May 1st. “I hope to leave in early November. I’m in Bedford, right next to Boston (Massachusetts), so I get the ‘other cities’ subsidy, but it’s stupid because it’s like we live in the suburbs of Paris,” she laments. . After the restricted expenses, “there should be $400 left over,” she calculates. “The smallest tour costs 50 to 100 dollars… That salary would be good in France, but not for living here, where everything is four times more expensive..”
Some situations are even less sustainable: another volunteer, after withdrawing her “survival” expenses (rent, food, telephone, internet, transfer from the French account to the American account, transport and student loan), finds herself with…13 dollars in your pocket. “We can live, eat, drive, work, but that’s all”, summarizes Léa, 27, at VIE in Miami (Florida) and who is also paying off a student loan of 700 euros. “It depresses me a little because I want to go on weekends, go out to restaurants, but if I choose one thing, I have to eliminate all the others.”
Assistance in effect from 1 August
As a matter of urgency, a temporary increase in compensation for the company’s accommodation was decided. It is provided for in the texts, but is usually optional.
The amount was set at an additional 300 euros per month for the United States and 150 for Canada. “We wanted it to be fast, so it’s the same amount regardless of city. The measure will apply from August 1 to the end of 2022.specifies the director of the VIE program who ensures that this “erases most of the unfavorable effect for young people”.
“That’s it, but it’s far from making up for the loss of the last few months.“, Judge Eliot. “We are already pleasantly surprised that they have done anything”, tempers Hugo. But it would take more substantial compensation for me to stay.
In turn, Léa, “does not intend to leave” because “I dreamed of this mobility”. She tries to earn extra money, but struggles with the law because VIE doesn’t allow her to work on the side. “I got into babysitting apps”confides the young woman who thinks of working “in her spare time, weekends and evenings”.
A gradual recovery and new scales in 2023?
Faced with these criticisms, Business France wants to reassure. If “there is still a small gap for some young people, in October it will be corrected”, says Christophe Monnier. Until the end of 2022, “the automatic adjustment of the provision will take into account the inflation and exchange differential, therefore there will be a gradual recovery”.
Furthermore, since May, Business France has been carrying out substantive work with the Ministries of Economy and Foreign Affairs to take into account the consequences of inflation “at all geographic scales at a global level”. “Then, we do not rule out a review for 2023“, continues the VIE program director.
Christophe Monnier acknowledges, however, that the device cannot entirely erase problems with rising rents, as in Eliot’s case. In this case, either the young person “changes accommodation”, or Business France “encourages him to ask the company to take care of his accommodation. If the negotiation does not go ahead, we try to play the role of intermediary”.
While inflation affects the entire world, measures can also be taken outside the eurozone after “some increases” in other countries.
*names have been changed