Tuesday, March 21, 2006

Labor Unrest To Continue In France

The IHT is reporting on what they term, a "very large" strike that is looming in France.

Now, I don't know and will not pretend to know all of the intricacies of this issue. And it doesn't really affect me as much as it does someone from France. But what I do understand is that March 28th is the date that has been set, for students and unions opposed to the new labor law that allows more flexibility in terminating younger workers, to strike. And I do understand, the business community is contending that they will be able to hire more young people on a trial basis, instead of using temps.

But I cannot understand what the big deal is here. In America, this is the norm. In fact, most places that hire young people in this country have a 60-180 day probation period, which is substantially less time than two years.

Regular readers know how I feel about
socialism and the sociological attitude it creates among the work force, on a macro level. If you are relatively new to PYY, here are some past posts that I feel both illustrate and demonstrate my feelings, with very lttle doubt.

But, understanding that there is no pure capitalism and no pure socialism (except on paper), we must understand that the answer is lies somewhere in between. Where the contention lies is: Where does the pendulum need to rest?

But before we can answer this question, we have to imagine a spectrum similar to the pH scale in chemistry, with the socialism on one end and the capitalism, on the other. In chemistry, all matter and all compounds fall somewhere between the extremes (bases and acids). And so it is with political and economic spectrums, in that, all ideologies, philosophies, and policies fall somewhere in between the left and right.

Europe in the post-modern era has leaned to the left of center, with the pendulum more towards labor, than business. Some EU countries are more so than others. For example, the continent leans further left than UK and Ireland and the eastern continent leans even further, than the western part (
which is why Eastern Europeans are trying to migrate westward). Britain and Ireland lie to the right of the continent and yet to the left of the U.S. (which has vascillated somewhat in the post WWII era and rests just right of center, here in the present day).

Looking at the unemployment rates for the EU (figures in this link are from July 2005), we can see that those countries leaning more to the the left of center (towards labor), tend to have a higher rate, than those states more toward the right (towards business). The U.S. during this time period was somewhere around 5.4%, if my memory serves me correctly. I have often wondered, how is it the Europeans are more willing to tolerate a higher rate than what we in the U.S. are willing to tolerate? Additionally I have wondered, just how long will they continue to tolerate it, without taking some measures to swing this pendulum back toward the right?

France appears to be willing to do this, but as you can see from the labor unrest they have been experiencing, they are meeting a good amount of resistance to this new law. Something has to give. If it doesn't, with France just under the 10% point, may very well see unemployment back in double digits real soon.


ms. miami said...

lasunsett- superfrenchie could give you more details, but here's my take:

many, if not most, french people realize that the whole system needs to be overhauled since the economic stability of the post-war era is no longer a given (sf had a good discussion of this recently).

however, instead of looking at the problem holistically, villepin is doing what most politicians do- addressing one small piece of the pie to not have to deal with the larger issue. the protesting students feel (and i see their point) that they are the lambs being sacrificed.

as the system works now in france, having been fired or let go paints a very large red flag on anyone's resume, often preventing a person from getting another job for months or years (not usually the case in the u.s. due to a different system and mentality). until this portion is also addressed, there will be resistance.

sooner or later, the politicians are going to have to attack the problem as a bigger picture and deal with the wrath of their constituents who resist change since they've benefited so much from the current system.

LASunsett said...

Ms. Miami,

Sounds like a logical complaint, in some ways. I would not be surprised if this were the case. But, it would be nothing that a change of attitude wouldn't fix.

By that I mean that business people will have to understand that there may be a host of reasons that a person lost a job, not all of them for negative reasons.

One thing I do do know is, after years of socialist labor practices, if the answer is going to be moving more towards the business end and away from the labor, then this will have to be done slowly. Too much change, too quick, can shock the system instead of help it.

superfrenchie said...

LASunsett: /I have often wondered, how is it the Europeans are more willing to tolerate a higher rate than what we in the U.S. are willing to tolerate?//

Comparing France’s unemployment to that of the US is tricky. There’s at least 3 factors that would make the rates much closer if conditions were the same in both countries:

1. Rate of incarceration: There are 2.1 million Americans in jail. That’s 726 inmates per 100,000 US residents. In France it is 8 times fewer (91). There is also a huge administration to cater to them. Some studies have shown that if the US were to have France’s rate of incarceration, its unemployment rate would go up by 2%.

2. Long-term unemployment: in the US, people who have not asked for a job in the last 4 weeks are not counted. In France, they are. If they were, it would add 400,000 unemployed to the US rolls.

3. The day-care situation: in France, it is free for children as young as 2-year old, and it is heavily subsidized for younger children. That allows mothers to work. But if they don’t find a job, they are counted on the unemployment rolls.

In the US on the other hand, because day-care is sometimes so expensive that a full-time job brings little more than the ability to pay for it, many mothers (or fathers, sometimes) decide to stop working for several years, until their kids are old enough to go to free school. Sometimes it is a life-style choice only, but often it is as much of an economic choice. Those mothers are not counted on the rolls, of course.

In last August issue of the New Yorker (not on line unfortunately), Adam Gopnik was estimating that if the same conditions were applying to France as they apply in the US, unemployment in France would be 4%.

As for youth unemployment, there are also huge problems in the US if you don't have a college degree.

Besides that, I am all in favor of the CPE, and hope that Villepin holds on to it. The only thing I would remove is the age factor. It seems discriminatory against young people.