# French Labour Law



## Wayfarer (Mar 19, 2006)

Who here thinks the students have the right or it? They do seem to have won, an article on the globeandmail.com today states:



> quote:The new, four-point plan sent to parliament would bolster existing job contracts, rather than enact new ones. The government would offer more state support for companies that bring on young workers. Other provisions would increase internships ...


So instead of giving employers more ability to handle their labour force, the government is now going to give more money to companies. For full disclosure, as I've stated elsewhere, I subscribe to neo-classical economic theory.

Thoughts?

Warmest regards


----------



## Étienne (Sep 3, 2005)

> quote:_Originally posted by Wayfarer_
> Thoughts?


A stupid reform is ended and in its place is instated a mostly harmless (but also probably entirely inefficient) plan consisting in yet more government handouts to firms.


----------



## lawschool82 (Oct 29, 2005)

Even the most basic idea of employment at will is lost on the French. I guess eating baguettes all day and drinking wine are more important than a productive workforce.

"Sue them all - the short, the fat, and the tall." D.T. Smith, Sage of Property Law


----------



## Rich (Jul 10, 2005)

A much needed reform attempted by an inept government. Villepin seemed to think he could tough it out like Margaret Thatcher with the miners. I think the reform will eventually be brought in, more deftly, by a future Blairist government, maybe in 2007, with the help of spin doctors. We'll soon be hearing talk about "empowerment", "stakeholders", etc.


----------



## Wayfarer (Mar 19, 2006)

So we have a "stupid reform" from Steven and a "much needed" reform from Rich. I thank both of you two for opinions from France. 

Steven: Why did you declare it "stupid"?

Warmest regards


----------



## lawschool82 (Oct 29, 2005)

Government handouts to firms are certainly not the best solution, but it is inconceivable that France can continue with such lax employment policies. Productivity can not be maximized without incentives for employees to work their hardest and take a stake in the economy, and 30 hour work weeks and 2 months of vacation time are most certainly not incentives that would entice the average worker to give his best effort to his employer.

Rich is correct in stating that this is a much needed reform. A business can not succeed where it is required by the government to retain inept employees. Instead, a firm must be able to, within reason, hire and fire in order to maximize productivity. As well, a firm must not go too far and act as a slave driver; instead, there must be incentives for employees to succeed. France has a long way to go, but hopefully they will see the light and recognize that excessive pay and work restrictions are the cause of excessive unemployment.

"Sue them all - the short, the fat, and the tall." D.T. Smith, Sage of Property Law


----------



## Rich (Jul 10, 2005)

> quote:_Originally posted by Wayfarer_
> 
> So we have a "stupid reform" from Steven and a "much needed" reform from Rich. I thank both of you two for opinions from France.
> 
> ...


A reform was (still is) needed (greater flexibility, less protection). The measures (or rather half-measures) proposed by the government to achieve the reform were stupid because given the hamfisted way they were presented they were bound to draw determined opposition, and because they would not have been very effective anyway. The result is that the government has had to backpedal, and so the much needed reform will now be even more difficult to bring in.


----------



## Wayfarer (Mar 19, 2006)

> quote:_Originally posted by Rich_
> 
> 
> 
> ...


Rich, Steven seems to be intrinsically against the reform, not how it is executed. My question was to draw out his politico-philisophical reasons why he deems it stupid.

Warmest regards


----------



## Étienne (Sep 3, 2005)

> quote:_Originally posted by Wayfarer_
> Steven: Why did you declare it "stupid"?


There is a case to be made for greater flexibility. I never tire to point out that it is unlikely to do much to reduce unemployment, but it has other advantages. I am not entirely against more flexibility, but I would not consider it the alpha and omega either, nor would I equate "reform" with "reform to have more flexibility" the way most English and American newspapers now do ("structural reform" has a very specific meaning when _The Economist_ writes it, for example).

Some ways to do this could include reducing judicial _ex post_ control of firing, for example trading that for a greater financial compensation (the compensation packages are very low now). This has been advocated by economists such as Olivier Blanchard, for example. That is not, however, what this reform was doing. What they were doing was trying to negate entirely all judicial recourse, for a limited period and for a specific category of the population. I fail to see the point.


----------



## Wayfarer (Mar 19, 2006)

> quote:_Originally posted by Ã‰tienne_
> 
> 
> 
> ...


Steven: Again, thanks for replying, input from the people on the ground, so to speak, is so much better than those here in North America. I am glad to see you are for more flexibility but why do you not think this will reduce unemployment?



> quote:
> Some ways to do this could include reducing judicial _ex post_ control of firing, for example trading that for a greater financial compensation (the compensation packages are very low now).


But is this not one of the aims of the reform? To allow companies to terminate workers without judicial oversight? Possibly I am confused. However, to carry on with your argument, so what you are proposing is that one would allow market forces to control the natural expansion and contraction of a company's labour pool but you would desire a higher than market wage to achieve this?

Warmest regards


----------



## Étienne (Sep 3, 2005)

> quote:_Originally posted by Wayfarer_
> I am glad to see you are for more flexibility but why do you not think this will reduce unemployment?


Because there is no economic proof of the contrary. More flexibility means it is easier to hire, but also that it is easier to fire. The net result is not clear, and historical comparisons, international comparisons or empirical studies are ambiguous. For example, France has recently known two periods where unemployment declined (1988-1991 and 1997-2001) and none of them were triggered by a greater flexibility of the labour market.

See the OECD for more details, chapter 2 of their 2004 Employment outlook, available here: https://www.oecd.org/dataoecd/8/4/34846856.pdf.



> quote:
> But is this not one of the aims of the reform? To allow companies to terminate workers without judicial oversight?


Not really. It was part of it, yes. The main point was dubious, though; they did not reform labour law, they just made it more difficult to apply. There was to be no written justification of the termination of the contract in the first two years. Exactly how this would have fared in court is anyone's guess. Plus of course, this was limited to one category of the population (under 26) and to the first two years of the contract. Meaning of course that there would have been a strong incentive to terminate most of them just before the end of those two years, a date conveniently located after the next elections in 2007.



> quote:
> Possibly I am confused. However, to carry on with your argument, so what you are proposing is that one would allow market forces to control the natural expansion and contraction of a company's labour pool but you would desire a higher than market wage to achieve this?


Not really (again). I was referring to a proposal by Olivier Blanchard and Jean Tirole (who happens to be my PhD advisor) in a recent report for the _Conseil d'Analyse Ã‰conomique_. Their main idea was simple but elegant: replace all control (judicial or otherwise) by a huge financial settlement. A company would be free to fire whomever they want, whenever they want, at a steep price. No challenge in court. The proceeds of those huge settlements would be used to finance the unemployment insurance system (replacing the current system of a tax on salaries). The result? Unemployment would be financed by the companies that fire, not by those who keep a large work-force, an elegant design in incentive theory. Unlikely to ever be applied, though.


----------



## Alexander Kabbaz (Jan 9, 2003)

I hear tell that Chirac caved. Now there's a surprise.

*https://www.CustomShirt1.com

Kabbaz-Kelly & Sons Fine Custom Clothiers
* Bespoke Shirts & Furnishings * Zimmerli Swiss Underwear **
* Alex Begg Cashmere * Pantherella Socks **​


----------



## Étienne (Sep 3, 2005)

It would be fairer to say that the whole government caved, and Villepin was the man most associated with the proposed reform and mainly responsible for its conduct.


----------



## Wayfarer (Mar 19, 2006)

> quote:_Originally posted by Wayfarer_
> 
> 
> 
> ...


----------



## Étienne (Sep 3, 2005)

> quote:_Originally posted by Wayfarer_
> Well sir, I am certainly not a French Ph.D. in Economics candidate, I am merely a product of a Top 25 MBA program.


And my field is not labour economics. I don't claim more than a layman's understanding of the mecanism proposed, and I have reported only a very simplified version of it. Rest assured, though, Olivier Blanchard is one of the world's most renowned labour economists, former head of the Economics Department at MIT, and the proposal deserves at least some credit.

Edit: I found a preliminary version in English, published at the end of 2003 as a MIT Working Paper, available here https://papers.ssrn.com/sol3/papers.cfm?abstract_id=464282



> quote:The point Steven, is to remove the penalty totally.


Perhaps you read a little too fast but you seem to have forgotten one point: the financial scheme was meant to replace the existing unemployment system, with a neutral financial result. This means that it would reduce labour costs but increase firing costs. This is not "adding a penalty", this is "replacing a large part of the current labour costs with a lump-sum penalty in the event of termination".

As far as I know, companies don't complain about firing costs in France (they are essentially nil), they complain about judicial uncertainty (the worker can challenge the firing in court up to 30 years after being laid off).


----------



## Wayfarer (Mar 19, 2006)

> quote:_Originally posted by Ã‰tienne_
> 
> 
> > quote:The point Steven, is to remove the penalty totally.
> ...


This is a great exchange!

Steven, I might posit that the costs of firing in France are essentially nil, because apparently no one gets fired. "Job for life" I believe is the motto? Also, I am not sure the result should be budget neutral, it would seem the idea is to post a gain, or cost savings in this case, no?

Warmest regards


----------



## Étienne (Sep 3, 2005)

> quote:_Originally posted by Wayfarer_
> Steven, I might posit that the costs of firing in France are essentially nil, because apparently no one gets fired.


About 1 million people get fired every year on average out of a workforce of 25 million. I don't know where that idea that no-one gets fired in France or that there is such a thing as "guaranteed job" or "job for life" came from, but it seems a bit of an exaggeration to me.


----------



## Wayfarer (Mar 19, 2006)

> quote:_Originally posted by Ã‰tienne_
> 
> 
> 
> ...


So 4% of the population is fired yearly? I have to say, I had no idea and that sheds some light on things. Certainly it is not what the media in North America portrays.

Warmest regards


----------



## Étienne (Sep 3, 2005)

> quote:_Originally posted by Wayfarer_
> So 4% of the population is fired yearly? I have to say, I had no idea and that sheds some light on things. Certainly it is not what the media in North America portrays.


Indeed. Add to that that the proportion is actually higher if you restrict yourself to the private sector (public sector workers are almost never fired).


----------



## Fogey (Aug 27, 2005)

> quote:_Originally posted by lawschool82_
> 
> Government handouts to firms are certainly not the best solution, but it is inconceivable that France can continue with such lax employment policies. Productivity can not be maximized without incentives for employees to work their hardest and take a stake in the economy, and 30 hour work weeks and 2 months of vacation time are most certainly not incentives that would entice the average worker to give his best effort to his employer.
> 
> ...


 It's always amusing to see someone from the law profession lecture about economic productivity.


----------



## Fogey (Aug 27, 2005)

> quote:_Originally posted by Alexander Kabbaz_
> 
> I hear tell that Chirac caved. Now there's a surprise.
> 
> ...


----------



## upstarter (Dec 3, 2005)

Anyone see the Wall Street Journal op-ed on this topic in today's edition. Some very good stuff.


----------



## lawschool82 (Oct 29, 2005)

I certainly concede that I am a layman when it comes to economic theory, but I do not think it takes Adam Smith or Milton Friedman to draw the conclusions I made.

"Sue them all - the short, the fat, and the tall." D.T. Smith, Sage of Property Law


----------



## Étienne (Sep 3, 2005)

> quote:_Originally posted by lawschool82_
> 
> I certainly concede that I am a layman when it comes to economic theory, but I do not think it takes Adam Smith or Milton Friedman to draw the conclusions I made.


Au contraire, my friend. You state "30 hour work weeks and 2 months of vacation time are most certainly not incentives that would entice the average worker to give his best effort to his employer", which is a very strong empirical statement. You must have surveyed the empirical literature very thoroughly to be able to be so sure that those levels will indeed not give incentives to workers to work hard.

You also state "they will see the light and recognize that excessive pay and work restrictions are the cause of excessive unemployment". Now, that is simply stunning. According to the OECD study I mentioned earlier, there is no evidence that more flexibility ("less work restrictions", I suppose) would reduce unemployment. I suggest you e-mail them your results, you have ground-breaking work here. [}]


----------



## lawschool82 (Oct 29, 2005)

Etienne, I concede I am but a babe in economics, and you are very astute. I must agree with Rich that it is nice to hear that the North American perception of France is not completely true, although I doubt that it is quite as rosy as you assert or as dismal as I assert.

I would like to apologize for my admittedly brash and assuming posts above. Additionally, I have posted two links below to US views on the problem of French youth unemployment, which both call for more flexibility. I think we can agree to disagree, and I look forward to future edification in the realm of economics from you astute gentlemen.

Paul Romer:

2 US Fed'l Circuit judges known for a law and economics approach: https://www.becker-posner-blog.com/archives/2006/03/comment_on_the_2.html


----------



## Karl89 (Feb 20, 2005)

Gents,

Vive la France! France est mort. If this rather simple reform meets with such dramatic protest then what chance does serious, comprehensive reform have? And if things get worse in France (which I hope they don't but suspect they will)the public will take refuge in its comfortable prejudice, anti-Americanism. I fear a deep, deep fracture in Franco-American relations no matter who is elected in 2007 and 2008. Gloomy days indeed. And Iran is one day closer to (a) bomb.

Karl


----------



## gmac (Aug 13, 2005)

Karl, should I cancel my three weeks in Provence in June? Are things so bad there now? What will I do for lunch if the local restaraunts are all closed, as they must be if the situation is as dire as you suggest?

Or do I just pack a burqa for my missus?

------------------


----------



## Karl89 (Feb 20, 2005)

GMAC,

Perhaps Hermes will make a burqa for Mrs. GMAC. Besides you seem the type to "man the barricades" in the event of revolution. Don't cancel your trip, you may have to rally Rich and Etienne to the defense of Gaul if leftist hordes decide to vent their anger at fine menswear shops in Paris.

Bon Voyage,

Karl


----------



## Rich (Jul 10, 2005)

> quote:_Originally posted by Karl89_
> 
> Gents,
> 
> Vive la France! France est mort. If this rather simple reform meets with such dramatic protest then what chance does serious, comprehensive reform have?


This reform failed because it was not serious.


----------



## Karl89 (Feb 20, 2005)

Rich,

Lets be honest, if "serious", painful reform is proposed then once again the unions and students will take to the streets, the elite will twiddle their thumbs for a few days and then the proposed reform will be withdrawn so that the government can have "consultations." When 70% of French students say their dream is join the civil service there exists a severe disconnect with any fundamental understanding of how a market economy works. Somewhere in Krakow a plumber is laughing.

Karl


----------



## Rich (Jul 10, 2005)

Etienne as an economist has made a very interesting contribution here. I agree that a labour reform is not necessarily going to improve unemployment figures, because so many other factors are involved. However, I think more flexibility is an important aim for the following reasons:

1. There is in France a strong prejudice in favour of job stability. People don't like moving from job to job. But lack of mobility puts a brake on economic growth. Anything that can get the workforce moving is good.

2. Small employers are reluctant to hire people because of the hassle they expect when they want to fire them. This hassle is exaggerated, but just the thought of it acts as a deterrent. This is something I see regularly, so anything that removes that deterrent is welcome.

3. Because of grade inflation it is difficult to know the real value of qualifications. Only a trial period in a company can do that. A trial period of a year or so may seem long, but many service jobs need that time.

4. Any measure that can get young people off the dole and give them work experience, even if it is piecemeal, is good. Unemployment is damaging for young people - it prevents them becoming adults. 

5. The high degree of protection that employees enjoy tends to foster a defiant and disloyal attitude towards employers. This may or may not be economically harmful, but it is socially harmful. No protection favours abuse and exploitation, of course - there has to be a balance, and I think in France the balance is too far on the side of employees.

There is nothing wrong with young people going in and out of jobs, having to move around, not being able to make long-term plans. In fact it's good for them - it was good for me. But this goes against the grain in France.

The way the recent measures were presented was politically inept - the reaction was predictable.


----------



## Rich (Jul 10, 2005)

> quote:_Originally posted by Karl89_
> 
> Rich,
> 
> ...


A serious reform doesn't have to be painful. Public opinion has to be carefully prepared. The advantages of the reform have to be stressed.
Safeguards have to be planned. A persuasive charismatic leader has to champion the reform, backed by loyal supporters. If the reform is proposed by a left-leaning government (which think is what will happen) the unions, students etc. will be less vehement in their opposition. Difficult though it is, think tanks and professional politicians ought to be able to do this.

The opposition to the reform was a gut reaction - in large part irrational, based on fear of the unknown, and fuelled by feelings of insecurity. The government failed to appreciate this, and mishandled the whole business.


----------



## lawschool82 (Oct 29, 2005)

Etienne made a very good point regarding the French court system's role in their current predicament of very low growth and excessive unemployment. In the OECD study Etienne cited, it showed that an incredibly large number of people fired sue their former employer, and 75% of these people win; not only that, but it takes the French legal system an average of 11 years to dispose of these cases. This is killing employers, and it seems to be one of the many factors in the French equation right now.

While I do not support the actions of the French students, the context of the situation shows that they are very frustrated and rightly so. Unemployment in the French youth demogrpahic is astounding.


----------



## Wayfarer (Mar 19, 2006)

Thanks to all that have participated in this thread, I for one learned some new facts, such as the lengthy litigation periods post employment discharge in France. What is also very interesting to note, is the members that posted in actual dialogue, a give and take of ideas, and the members that simply trolled. I think one should take note of these individuals and temper further replies to them in such light.

Warmest regards


----------



## Gurdon (Feb 7, 2005)

This exchange has been informative and enjoyable to read. I learned a lot about France, and a lot about the US and, what appears to me to be a conservative bias in American media.

As a resident liberal (socialist anarchist, actually) on the forum, I am pleased by the outcome of events in France. 

It is encouraging to me that there is still a place where labor retains political power. 

I could go on, but I really am not trolling, just making the point that not everyone believes in unalloyed capitalism as the best way to organize society.

My son and I were in Paris at the beginning of the demonstrations. Had a couple of interesting chats with le flic (in a sort of pidgin English/French). We were staying very near the university. 

Going back this fall with my wife. When we are closer to departure I'll post for shopping suggestions.

Regards,
Gurdon


----------



## jbmcb (Sep 7, 2005)

> quote:_Originally posted by Ã‰tienne_
> Because there is no economic proof of the contrary. More flexibility means it is easier to hire, but also that it is easier to fire. The net result is not clear, and historical comparisons, international comparisons or empirical studies are ambiguous.


Not entirely analogous to the French situation, but in the US at least, states with "Right to Work" laws usually have lower unemployment rates than non-RTW states.

https://www.mackinac.org/article.aspx?ID=4305

Right to Work laws regulate the conditions that Unions can place on companies, such as all employees of a company must belong to a union. In non-RTW states, the unions often act as the HR departments of the companies, having the ultimate say on who gets hired and fired.

I was screwed out of several jobs by this practice. I was working at an hourly position in college, and my supervisor had budgeted a salaried position for me. The union overruled him, and HIS supervisor, filling the spot with a rather inept union employee from a different office. I left, and after a year of complaints from customers they shut the whole divison down. All the other hourly employees I worked with (poor college students) lost their jobs, but the union employee who wrecked the department was transferred to another position. Nice!

Good/Fast/Cheap - Pick Two


----------



## Wayfarer (Mar 19, 2006)

> quote:_Originally posted by Gurdon_
> 
> This exchange has been informative and enjoyable to read. I learned a lot about France, and a lot about the US and, what appears to me to be a conservative bias in American media.
> 
> ...


Gurdon, thanks for being so polite even though your view is quite dispargic from mine. One question I would ask you though, if Labour is retaining the political power in France, would it then be Labour's fault/responsibility that such a large percentage of non-white youths are unemployed, disaffected, and rife for recruitment by religious zealots?

Warmest regards


----------



## I_Should_Be_Working (Jun 23, 2005)

> quote:_Originally posted by Gurdon_
> 
> This exchange has been informative and enjoyable to read. I learned a lot about France, and a lot about the US and, what appears to me to be a conservative bias in American media.
> 
> ...


The victory they celebrate, though, is no doubt pyrrhic. I would encourage all like minded socialists to actually help solve the unemployment problem by doing that which creates jobs: start a business. Then they can practice the sort of policies they demand.

From where are the jobs to come? The government? I don't mean to be rhetorical here, but rarely do I hear of real solutions by Labor minded individuals. Certainly you don't believe a 30 hour work week is economic development.


----------



## Étienne (Sep 3, 2005)

> quote:_Originally posted by I_Should_Be_Working_
> I don't mean to be rhetorical here, but rarely do I hear of real solutions by Labor minded individuals. Certainly you don't believe a 30 hour work week is economic development.


And yet it is an option, and a valid one. I will not go into the economic debate, but the advent of the 35 hours week was indeed a major reform in France, and although the actual implementation was far from perfect, it created around 350,000 jobs from 1998 to 2002 according to an in-depth recent study by the French statistical institute. Productivity increased drastically.


----------



## I_Should_Be_Working (Jun 23, 2005)

> quote:_Originally posted by Ã‰tienne_
> 
> 
> 
> ...


Even if true, what about income, overall product, and national standard of living. An economy will not produce more by working less. 40 hours is by no means extreme, and is not a level where productivity lags. By this logic, a cut to 25 hours would really increase employment. The trouble, however, would always be that the product of labor would not justify any growth in wages. The economy will become even more stagnant. Available willing labor would be denied employment above the 25 hour threshold, and the economy would be even more artificially constrained. As it is, France is denying itself the benefit of workers who would glady work longer hours if greater opportunity existed.

Seriously, suggesting a 30 hour work week is really out of the economic mainstream. Very simply, high standards of living are supported by strong economies. These economies require an environment where free enterprise can flourish. France is currently a nation whose people place a greater value on vacation and guarantees. What would basic economic theory suggest of those showing such a preference?


----------



## Étienne (Sep 3, 2005)

> quote:_Originally posted by I_Should_Be_Working_
> Even if true, what about income, overall product, and national standard of living. An economy will not produce more by working less.


If we're talking for the whole economy, it does not "work less". Enven with a 10% decrease in the legal working hours, employment rose enough that total labour has increased a lot. 1998-2002 saw the creation of about 2 million jobs (as I said before, 350,000 of them are attributed to the shift to 35 hours).

That's a reform, in any case, and a structural one, I wonder if that's what people have in mind when they say we need "structural reforms".



> quote:
> The trouble, however, would always be that the product of labor would not justify any growth in wages.


Indeed. Low labour increases were actually part of the reform conducted in France. Labour costs did not rise, but the employment rose enough so that total consumption actually rose a lot.



> quote:
> As it is, France is denying itself the benefit of workers who would glady work longer hours if greater opportunity existed.


Maybe, but it does not look like it. If such work was so badly needed, you would wonder why we have so much unemployed labour though. There is also a lot of flexibility allowed by the laws that were passed.


----------



## Gurdon (Feb 7, 2005)

> quote:_Originally posted by Wayfarer_
> 
> 
> 
> ...


You are welcome. I think exchanges should be civil. People can disagree without being disagreeable.

I should have expressed myself better. Labor is not in control of France (or anywhere), but in France they do have a measure of real political power. This enables labor to have a meaningful say in setting national policy. In contrast, in the US the oligarchy has almost a monopoly on real political power. NAFTA, after all was brought to us by Mr. Clinton, a sort of Republican light.

I believe, by the way, that offering subsidies to employers to hire unemployed people has been tried here. I don't know with which party it originated.

As to blame for the state of mind of the disaffected recent immigrants, I would assign it to the so-called structural adjustments being made by the oligarchy at the expense of ordinary people. An editorial by Kissinger in the International Hearld Tribune, warned that we should not succomb to charitable impulses towards those displaced by economic restructuring as in the long run everyone will be better off. The implication here, I believe, was that we can't afford to simultaneously impose globalization and compensate its (our) victims. This strikes me as the same sort of excuse Malthus provided for avoiding poor relief. (Incidentally, one of the two police officers with whom my son and I spoke was of African origin.)

I am not sure of what neo classical economic theory is. But if it is connected with Adam Smith it should be noted that he wrote about the need to offset the negative effects of the market on poor people. (Please don't ask me for a citation, it is at least 30 years since I read _Wealth of Nations_.) I also remember that Smith was aware of the inherent flaw or contradiction in Malthus's theory that the poor couldn't feed themselves as they multiplied due to charity which would short circuit the alleged natural limits imposed by starvation on population.

I think the best of worlds would have a mixed economy (different than the mixed economy we presently have) with a large safety net and policies favoring small business proprietors and labor, and with strict regulation of large corporations, in order to counter their disproportionate power.

I defer to others who have addresed the situation in France.

Regards,
Gurdon


----------



## Rich (Jul 10, 2005)

> quote:_Originally posted by Gurdon_
> 
> It is encouraging to me that there is still a place where labor retains political power.
> 
> ...


Although I wouldn't describe myself as a socialist anarchist I too am glad (proud even) that the voice of labour has some weight in France. This ensures a lively political debate and interest in the political process. The downside is that it encourages an adversarial "us-and-them" attitude which I find rather anachronistic today. But it keeps us all on our toes, which is a good thing.

Another aspect which must not be overlooked is that vociferous political protest is a tradition in France - it is something of annual ritual. Most French people look upon it with indulgence,despite the inconvenience. It is in some ways a demonstration of social cohesion. The riots last November were of a different sort, however.


----------



## lawschool82 (Oct 29, 2005)

Gentlemen,

With Labor holding significant power in the French government, one would expect that these young, unemployed workers would move forward with some more reforms aimed at opening the job markets to them, which I think will be interesting to watch in the near future.


----------



## I_Should_Be_Working (Jun 23, 2005)

> quote:_Originally posted by lawschool82_
> 
> Gentlemen,
> 
> With Labor holding significant power in the French government, one would expect that these young, unemployed workers would move forward with some more reforms aimed at opening the job markets to them, which I think will be interesting to watch in the near future.


Unfortunately, the reforms typically advanced by such groups often entail greater government control, more bureaucracy, and higher cost for business. This will not create quality jobs, with a growing GDP, and higher national wealth.

As to the earlier points concerning raising overall employment, yes, government can devise schemes to reach full employment. However, they often have a detrimental effect on the economy if such measures are contrived. At the extreme, everyone had a job in communist countries and their economies were world laggards. France is becoming the laggard of western Europe, and this will only worsen unless real reforms are taken which encourage business creation and economic development. And by "economic development", I don't mean handouts to government favorites or business schemes propped up by the subsidies.


----------



## Gurdon (Feb 7, 2005)

My official field of graduate study at Pratt Institute was "Planning for Developing Nations." I pretty soon figured out that the kind of development involved was what is currently called restructuring and resulted in healthy economies and much unpleasantness for the poorer people in whatever country was being modernized. (Two years and 60 units later I got my MS and spent my career in municipal government planning.)

Having a healthy economy does not necessarily mean that the basic needs of the populace are met or that life in such circumstances is pleasant, in fact, quite the opposite. In countries such as France or Italy, however, where labor has political power, the quality of daily life is pretty good, even if the economies are not efficient.

The European social welfare net was established by Krupp and the Kaiser to provide reasonably healthy and trained workers and cannon fodder. It appears that with the elimination of jobs in the formerly industrial nations there is no longer a need for healthy educated workers. In the US, even though we don't need workers, we still need soldiers. I guess even with no health care and poor education there is a large enough population base to feed the military. 

I see nothing wrong with a 30-35 hour week and six weeks vacation. 

Regards,
Gurdon


----------



## Étienne (Sep 3, 2005)

> quote:_Originally posted by I_Should_Be_Working_
> France is becoming the laggard of western Europe, and this will only worsen unless real reforms are taken which encourage business creation and economic development. And by "economic development", I don't mean handouts to government favorites or business schemes propped up by the subsidies.


I have trouble with this idea that there is something inherently wrong with the French model (or the European continental one). It is the same discourse you would read about the US back in the 1980's. If the problem is so structural, one wonders, how is it that this "laggard status" is only 5 years old? If you compare GDP per capita growth, say, in the US and in France, the picture is much more balanced. France has a higher growth rate in the early 90's, then a slower one for a couple years. 1998-2002, France and the US have about the same rate, and France is lagging behind in the last 3-4 years.

And yet, journalists and analysts seem to have a consistently short memory. When a country has a few years of slower growth, surely its whole model is broken. If the journal is American, you can expect to read that said model is in dire need of "reforms" (meaning of course "reforms towards a more flexible labour market and the like", somehow all other reforms never get called by the name). If the journal, is, say, a European journal in the 1980's, you can expect to read about the inevitable American decline on the face of Japanese competition...

There are reforms needed in several countries, and surely France has its share of problems, particularly these days. More flexibility on the labour market, for example, is unlikely to do much to reduce unemployment, but it might be desirable nonetheless. But saying that unless this is done the country will inevitably decline strikes me as a rather bold bet.


----------



## I_Should_Be_Working (Jun 23, 2005)

There will always be a measure of "doomsday" analysis. One doesn't sell books or is called for commentary by saying that everything is pretty good and should continue more or less the same. The mid 80s' were full of US versus Japan comparisons. So, what changed?

Well, one must consider what drove the economies. During the 80's the US began transitioning away from a rigid manufacturing economy to a dynamic economy driven by technological change. I'm not one who parrots the line about how the US could and should become solely service oriented. But, I do believe companies must focus like service industries. The other major factor in the dynamic growth was a shift away from union based work patterns and toward greater flexibility. The US labor market and economy emphasized dynamic growth, driven by reduced tax rates favoring investment.

It is unrealistic for everyone to work 35 hour weeks. What products are developed in such relaxed manner? We would not conversing over this forum were the technologies utilized were limited in their development by such rigid laws.


----------



## Étienne (Sep 3, 2005)

> quote:_Originally posted by I_Should_Be_Working_
> It is unrealistic for everyone to work 35 hour weeks. What products are developed in such relaxed manner? We would not conversing over this forum were the technologies utilized were limited in their development by such rigid laws.


I have yet to read a convincing argument why it would be so, actually.


----------



## I_Should_Be_Working (Jun 23, 2005)

> quote:_Originally posted by Ã‰tienne_
> 
> 
> 
> ...


Let's take your dissertation. How much longer do you suppose grad students would spend in school if told they could only work 35 hours a week on research?

And if a certain business project requires 1000 labor hours, dividing by a lower number per week will demonstrate the obvious: either the project takes more time to finish or more workers must be hired. Hiring more workers entails higher costs than hiring less. This concept should not be fairly difficult to understand.


----------



## Étienne (Sep 3, 2005)

> quote:_Originally posted by I_Should_Be_Working_
> Let's take your dissertation. How much longer do you suppose grad students would spend in school if told they could only work 35 hours a week on research?


What? You mean I should be working a full 35 hours instead of perusing sartorial forums? I knew I was doing something wrong!



> quote:
> Hiring more workers entails higher costs than hiring less. This concept should not be fairly difficult to understand.


And? I still don't see how hiring more workers (about 10% more forgetting productivity effects) makes an entire economy incapable of being productive or innovative, as you seem to imply. A little more labour cost is of course a cost, but that is not the whole picture.


----------



## Rich (Jul 10, 2005)

An interesting snippet from the Daily Telegraph (UK):

"Britain is the only country in the Group of Seven major economies which has seen its unemployment total rise over the past 12 months, according to figures from the Organisation for Economic Co-operation and Development (OECD)".

https://imageshack.us


----------

