French Riot over Job Law

The French Prime Minister Dominique de Villepin has announced a new labor law designed to help reduce youth unemployment. The American press has covered the riots that have ensued with a confusion one can only put down to cultural myopia. The PM’s proposals are, simply, a threat to the French social compact.

The labor market in France protects the worker at the expense of the employer and the unemployed. The unemployed are protected, in turn, by a social welfare system of some depth, and the employers are protected against outside competition. The result is a rather inefficient system in which everyone is insulated to some degree against the market. As un-American as this sounds, this has been the deal in France since 1945.

After the riots by Muslim youths (and with more than a few non-Muslims joining in) last fall, the French government decided that unemployment among young people was the problem. It has been a problem in France for a quarter of a century, frankly – unemployment among those 18-24 has been 20% or higher since 1982. Mr. de Villepin’s proposal was to make it more attractive to hire new, young workers by making it easier to fire them if they don’t work out. Employers could fire anyone under 26 during the first two years of employment without giving a reason.

In addition to youths throwing rocks at the police and the police gassing the kids, the unions are screaming bloody murder over this. They believe, quite rightly, that this is the thin end of the wedge. Once the concession is made to this rule, it is only a matter of time and economic hardship before the age limit gets increased to 30, then 35, then 45 and then everybody.

In Australia, where a similar law went into effect, youth unemployment has dropped, and this bodes well for a future work force built on experience. In the US, where there is virtually no job security for anyone, jobs are more plentiful for those just entering into the work force (at least until management screws up and has to close plants and fire workers to make up for their own incompetence, e.g., GM and Ford).

There is an opportunity for French labor here as well as a hidden social risk. The opportunity is to increase the overall number of unionized workers. This gives French labor more muscle and, if a more flexible labor market must come, this gives labor more influence over the final result. That said, this law could make things worse in the banlieux where the children of Arab immigrants suffer greater unemployment than graduates of the Sorbonne. If an employer can fire at will, the laws against discrimination will have to be beefed up and heavily enforced. Otherwise, more riots lie ahead.

© Copyright 2006 by The Kensington Review, Jeff Myhre, PhD, Editor. No part of this publication may be reproduced without written consent. Produced using Fedora Linux.

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