Richard Goulde Writing

Blog Post – French Workers: Protecting the Protections

International affairs op-ed piece.

Perfection does not exist. It’s a shocker, I know. But in the real world, we have to make tradeoffs. We look at the options, weigh their respective advantages and disadvantages, decide on our priorities in the situation, and choose.

For decades, France has chosen the disadvantages of high employment in favor of job security, better unemployment, improved retirement benefits and shorter working hours. French workers argue that while they make less money and pay more taxes, and France’s economy languishes, they nevertheless enjoy a higher quality of life. Perhaps they’re right; it’s all a matter of priorities.

France’s embattled prime minister, Dominique de Villepin, has different ideas. “The priority is to come out of the current crisis,” he has said, recognizing that a weaker economy makes France less competitive and influential globally. So he has begun introducing new programs designed to encourage French employers to hire. One of his most controversial efforts is called the CPE (contrat premiere embauche, or first job contract), which applies to workers under 26. The CPE says they can be fired for any reason without notice in the first two years of the job.

Young people in France have been vigorously (and violently) protesting this law. Are these demonstrations an overreaction?

De Villepin’s basic position is sound, but the counter-reaction is understandable. For one thing, it’s hard to give up protections that you have always enjoyed, particularly when you weren’t part of the conversation in the first place (de Villepin did not consult with unions or the electorate). But more importantly, the law discriminates based on age. Young people are asked to give up their job security, while older folks look on bemused. (A similar “contract for new hires” has a narrower application in the marketplace.)

Moreover, it’s a one-sided approach. What do the young workers gain for what they give up? Perhaps in some perfect socialist universe, the young employees would realize that lower unemployment is in everyone’s best interest, and they would happily do their part to make that happen. Back in the real world, one-sided deals lead to resentment, and today’s raging and politically disempowered youth are tomorrow’s angry electorate. De Villepin risks a backlash by making the French populace even more entrenched in trying to preserve their legally-enforced job protections.

And indeed, what difference does it make if you can be fired easily if you can’t find a job anyway?

Unemployment among young people in France hovers around 24%. In poor suburbs, the rate skyrockets to 50%. I admire French passion in defending workers’ rights, but they are hurting themselves in the long run.

I firmly believe that business will take advantage of its workers given the opportunity. Unfortunately and inappropriately, most corporate entities do not seem to recognize they have moral obligations just like individuals. The fact that industry organizations and leaders have reacted to de Villepin’s reforms with wholehearted approval makes me suspicious.

But at the same time, every regulation handicaps the ability of businesses to grow, make a profit, hire more workers and expand the economy. So while there is a need to protect workers’ basic rights, it’s easy to go too far.

Depriving young workers of their job security for a couple of years does not cross the line, and their energies can be more productive than just on-going protesting and rioting.

But this law is nearly crosses the line. The reform was poorly handled by making one-sided demands of a specific subset of the population without negotiation or consultation with those affected, which is particularly egregious when there are more straightforward (but more politically difficult) possible reforms, such as cutting exorbitant unemployment benefits or raising the retirement age (currently at 59). Both sides would be better served, as is usually the case, by simmering down the rhetoric and sitting down at the same table.