http://www.latimes.com/news/nationworld/wo...headlines-world

1 million (if you listen to the police) or 3 million (if you listen to the Unions) people are protesting on the streets in France, a new law that partially rolls back a law that essentially gave every worker in the country automatic tenure (with no elapsed time since employment whatsoever). The roll back law is considered particularly inflammatory, because it only rolls back the tenure law for people under the age of 26. Proponents claim it will help ease the massive youth unemployment rate, which is currently around 25%.

Protests against the law have been raging for about a month now, and major French Unions are threatening a general strike. Business is slowing down, as huge numbers transport workers are walking off their jobs in protest. Many High Schools and Colleges are being temporarily shut down.

The Prime minister is refusing to take back the law completely, but wants to negotiate changing it, so as to give students tenure after 2 years of employment. Protesters refuse to engage in such negotiations.

The law still may not go into effect, if President Chirac doesn't sign it.

Personally, I think the roll back does too little, and is too discriminatory.

Is the law justified from an economic perspective? Even if it is, is it worth all of the economic damage resulting from protests?

What should the French government do about this situation?

I think "automatic tenure" is an incorrect term to describe the current law; the government regulation makes sure that there's a reason for a worker to get fired. In other words, if somebody doesn't do the job, this person will be fired just as fast in France as in United States.

Answering the question, allowing the employer to fire an employee without giving any reason whatsoever (and apply this law to young workers only) is pretty clumsy way to address the need for economic reform in France. Personally, I would raise the maximum mandatory work week to a standard 40 hours instead of current 35 first. This step is significantly less inflammatory, 35-hour work week is a relatively recent law, people are not used to it as much as some other labor laws - while making the business conditions in France more hospitable for companies. From my personal experience, I know some people in France who work white-color jobs and work significantly more than 40 hours per week despite all the labor laws (which have been watered down recently anyway), so further doing away with workweek law could be the first step which could meet very little resistance (since many people don't work 35 hours anyway).

Is the law justified from an economic perspective?
The "economic perspective" is profit. If this law will create more profit then it is justified from the economic perspective.

Even if it is, is it worth all of the economic damage resulting from protests?

Democracy is always worth it. France is a country of 60 million people, and the protests angered 1 million of them. This is not a majority of the country, but if you anger that many people, you have done something wrong.

I am not an expert on the socioeconomic issues of France, but it is the government's role to look out for the people. If government is looking out for business, and business is looking out for profit, then who is looking out for the people?

What should the French government do about this situation?
There is a compromise that exists. The workers should be allowed to keep their job as long as they are doing their job. If the workers exploit their tenure then the government should have provisions for firing someone who does that. The only law that should have been presented was one that gave business owners the ability to rid themselves of an unworthy worker without creating a loophole to fire anyone they wanted.

Is the law justified from an economic perspective? Even if it is, is it worth all of the economic damage resulting from protests?

Good question. How do you balance a productive and healthy economy against the temper tantrums of the work force?

The riots have been followed with interest in Denmark, not least because the French government looked at the Danish economy for inspiration, trying to find a way of breaking the decline of the French economy.

Unfortunately, as Danish observers have noted, the French political system does not have the same traditions of interaction with the population as exist in Denmark and it doesn't necessarily follow that what works well for Denmark will work well for France. The irony is both countries based their current systems on the same socialist foundations. Denmark moved on, but France seems stuck in the 1960's.

I think the law is justified in that France risks total economic collapse (as happened in Argentina) if it continues on its present course and then all the screaming and shouting in the world can't save a system so out of step with reality as currently exists in France.


What should the French government do about this situation?

First and foremost, curb immigration. The biggest problem facing the European nations at the moment is the massive drain on resources brought about by millions of unemployed, unproductive people. The vast majority of these are immigrants and France has many millions of people it simply can't afford to pay for.

Britain faces the same problem and almost unnoticed in the shadows of the French street violence are the related strikes and protests in Britain concerning retirement. The problem is the same. In the holy name of multi-culture, EU nations have ignored common sense and over spent on importing millions of people from the third world and Arabia. What we're seeing in France now is what happens when you ignore the needs of your own people in order to pursue a political ideology.

More specifically, the French government needs to learn how to engage its own population in the political process and the French need to learn, once and for all that rioting and violence is not the answer to solving political and social problems. That if they want to live in a multi cultural EU/society that can compete with the USA then they have to accept that this can only be done by scrapping their cherished socialist ideologies that would grant them protection from the harsh economic realties of the real world and compete on a level footing.

I don't feel sorry for the French. At all. Their antics and behaviour is reprehensible and they've used the same tactics of street violence too many time in the past. The entire EU is being held hostage by this French tradition and were it not for the militant French farmers, we wouldn't be pumping billions of Euro's a year into a Common Agricultural Policy that is digging Europe deeper and deeper into corruption.

Its about time the French woke up and started taking some responsibility!

There is a compromise that exists. The workers should be allowed to keep their job as long as they are doing their job. If the workers exploit their tenure then the government should have provisions for firing someone who does that.

The problem is not that businesses cannot fire bad workers, the problem is that businesses cannot lay off workers. Companies grow and decline, and sometimes need an excessive amount of workers for a very temporary purpose. Making lay offs illegal makes companies very careful when they hire workers, because they know they will not be able to get rid of them once their on board. This is why unemployment rates in France are so high, and the new bill was meant to counteract that.

Personally, I think the bill wasn't enough. Automatic tenure shouldn't exist for people of any age, because it simply isn't practical in this day and age.

On top of being too little, the bill was crafted in such a way as to beg for outrage, because it employs age discrimination.

Not only am I currently in France, but I got shafted by the strike, and stuck in Nice for 10 hours waiting for a TGV. Mind you, the French Riviera in the brilliant sunshine is not the worst place to be stranded... walked along the beach for an hour or two, and the bikinis were already out. Also passed a large protest march along the Chemin des Anglais, quite a lot of people out I must say.

Regardless, I have learned more about French politics in the last month than I knew from my whole life. There is a serious systemic problem here in employment, and any attempt to fix it is stymied by the unions.

Currently, the government wants to impose a plan saying that newly hired stuents can be fired during a 2-year probationary period. Currently, the employment in France is such that firing somebody is next to impossible, and can drag out for well over a year if they protest.

That sounds bad for sytudents, but it isnt. The law was enacted to HELP students find jobs. Currently in France the unemployment rate for 24 and under is 23%. That is because the firing laws are so impossible, employers simply DO NOT HIRE students because of the student turns out to be a bum, they cannot get rid of them. Employers prefer proven experienced workers with a decent CV.

Thus, this reform would give employers an incentive to hire students on again. And this is what the students are protesting, and what the majority of the French unions walked out about yesterday. I'm a near-socialist, and even I think the employment policies here are inane.

Even this law is not a problem solver, it is a first step at best, and the government is likely going to be forced to back down, and the situation for sudents will get worse, then in a year the stuents will protest because their lot is terrible and "The goovernment isn't doing anything..."

The term "lay-off" is the politically correct version of "fired." So the only change in position you and I have is that you believe companies should be able to fire ALL workers and I think companies should be able to fire only the BAD workers. Companies should not be able to fire people because it will yield more profit. That's greedy and immoral.

"Hey thanks for all your hard work. We had record sales this quarter. You're fired. SECURITY!! Escort this man off the premises."

That does not sound fair to me.

If a company needs temporary workers then they should hire them. I find it hard to believe that the country of France is unaware of temp-for-hire. If they are unaware, then they need to get aware. Maybe you can provide insight Vermillion, do the French have temp workers?

From what I've read there are a lot of misconceptions abounding here on this issue. I'd suggest taking a read of this diary over at the European Tribune which collects a lot of relevant facts from various sources.

The first misconception is this unemployment number of 23%. That is an apples to oranges comparison to the rates typically reported in the US and the UK.


Secondly, as the diarist points out most students in France do not have to work to go to school whereas that is not the case in other European Countries. See this graph to see what percent of students must work while in school. 6.8 % in France, 42% in the UK.

So given that information that puts this in a whole different perspective, there isn't some crisis having to do with youth employment, the unemployment rates for youth are nearly equivalent to otehr countries in the region.

This diarist goes on to debunk the myth that it is impossible to fire people in France showing that the job market is as flexible or more flexible than it is in the US and lots of new jobs get created each year.

Also note that you can be fired without having to offer any explanation or warning which means people could be fired because of race, gender, religion, political views, etc. It would also be really easy to fire someone at the end of a two year term and hire new students.

I'm not French and don't know from firsthand experience but if there is some inefficiency in the labor market it seems like this is an extreme and draconian step more meant to exploit this age group than help them. Of course all US publications and some European publications have spun the facts in a way to make it look like some crisis is being addressed. You should always be given a reason when you are fired, always.

Something about this seems off to me and I suspect it might be cleared up if we had some honest media coverage.

I don't actually think that our media intentionally "mis-covers" topics such as this, but moreover may not understand underlying implications.

What about stories from Reuters? Don't you think that they, not being American, would have a better perspective?
Read this.

I personally believe that when it comes to foreign affairs, that our media earnestly attempts to make objective claims. It's not like the LA Times really has an agenda on this one... I don't suppose.



I would have to venture, for 630 people to be arrested and for 90 officers to be injured that it's pretty serious...

What I was primarily referring to was this 23% number that everyone keeps throwing around. The media should know better than to compare apples to oranges like that. So either their editors and fact checkers aren't doing their job or they are deliberately trying to spin the story a certain way.

When you compare the number 23% to the 7-8% everywhere else the story takes on a whole different youth-in-crisis feel, but in reality youth unemployment in France is little different than the US or the UK.

Furthermore, as I stated above they don't take into account the fact that many youth don't work because they don't need to - school is paid for for all but 8% of students vs. 40-something% in the UK and I bet pretty close to 100% in the US.

The angle all the articles have taken with this story is that there is some kind of youth crisis here and therefore this legislation is absolutely necessary to correct the problem. If they would prevent the facts accurately they would show that theory is clearly bogus, there is no youth employment crisis in France.

While I also have disdain for PCese, there is a distinct difference here, I've had to perform both. A layoff is usually a short term reduction in workforce to match demand, whereas termination can be done for many reasons. In a typical union environment you must layoff in reverse-seniority, i.e, you may very well have to layoff better workers with less seniority.



It would not be an economic advantage to terminate productive workers. I can't for the life of me imagine why anyone would do it, it defies logic. During a downturn in demand, or the economy in general, it does make sense to reduce headcount to maintain viability. A bankrupt company has zero employees, not a great alternative.
All the companies I've worked for go out of their way to protect valuable employees, shuffling people around as best they can, until things pick back up whenever it's possible.


Bunk. OECD CIA
Any attempt to dismisss their numbers defies logic. If they had an unemployment rate equal to ours, why would they be so concerned about it?? It would really make no sense at all to be making significant proposed changes to their society if it's not a problem, now does it?

Employment "at will" gives employees a powerful incentive to be productive, hence our productivity numbers. It's counter-intuitive to terminate someone who is making you money. The only countries that can do as well, or better, are ones that have powerful social stigmas attached to personal failure. (e.g. Japan). In socialist countries like France there are no personal failures, you can just blame it on the company.

How exactly do you feel you refuted what the person in that blog wrote? I checked both your links and they discuss general unemployment numbers, putting the total unemployment in France around 10%. It says nothing about the youth unemployment which is what this whole situation is referring to.

And regarding the logic of the rest of your post, it makes no sense. The fact is we don't know what is behind the decision because of the dishonest press coverage of it. If I read French I'd be checking French sources, not the LA Times but sadly I don't. So basically you are making all kinds of assumptions based on little knowledge of the situation and most of that knowledge is wrong.

Well, I am in France and I do read French fluently, and have been following this crisis to the point of being accidentally caught in the middle of it.

I'm sorry Cube Jocky, but the world media, the French media, the French government and the French students (and sympathetic unions) seems to disagree with the anonymous blogg you posted as a source.

I also strongly question your bloggers conclusions, and the arguments he uses to support them. In particular his unsourced, unlabelled graph about what percentage of students 'need to work' during their studies. How exactly do you measure who 'needs to work'? Is that at all the same thing as wants to or is looking for work?

His claims about the relative 'elite' status of various schools in France is also decades out of date. The ENS are no longer elite schools necessarily, they have not been for a long time. Trust me, I know, I'm working at a particularily squalid one right now.

Lastly, he tries to demonstrate that it is NOT impossible to fire people in France by citing two enirely irrelevant charts that do nothing to prove his point. Number of jobs created and destroyed in particular is silly, when any first year economist can tell you that by far the primary cause of job destruction is bankruptcy.



So given an unknown blogger whose facts are fairly out of whach, or the entirety of France and the experts covering the situation from abroad, forgive me if I deffer to the latter. I saw an interview yesterday with Raymond Barre, pretty well known as the leading economist in all of France, and also former prime minister, and he also seems to have been 'duped' by the media, because he certainly violently disagrees with your blogger. So has the Economist research Unit, one of the formost economics research centres in the world.

This is an excellent article, and from a bit more trustworthy a source than an anonymous internet blogg...

http://economist.com/displayStory.cfm?story_id=6744226

It is general numbers, but it is contrary to the intent of the quote which was basically "nothing to see here folks, move along". The writer was disputing the methodology, and the sources compare on equal footing. If the unemployment in the worst segment is only 8% then why is it a problem?




If you would look at the quote preceeding my statements, my arguements were disputing the statement directly preceeding each reply, e.g. Layoff=Fire. My assumptions in each are intuitive of business in general. It defies logic to terminate great employees who are making you lots of money. Likewise it doesn't make sense to sacrifice all of your employees and bankrupt a company just to retain a few.

I believe the graph is showing the percentage of students that do not have their education fully paid for, which would generally mean that you do not have to work to support yourself in school.

Regardless of whether you think his conclusions are correct or not, there is one huge problem with the debate and the media coverage and that is this 23% number that keeps getting thrown about. When you start a debate off like that, knowing it is an apples to oranges comparison, you have framed the debate a certain way and pretty much any conclusion you draw from it even if you get other things right is going to be flawed.

And I have read the Economist article Vermillion, I have a subscription. At least they use the correct number national which is more than I can say for the whole of the American media covering the story.

The main problem I have with this is the focus on youth here, it has nothing to do with globalization as the Economist suggests I believe it has everything to do with exploitation. If you can hire someone and fire them for any reason whatsoever (including things like race, gender, religion, political beliefs, etc - because you don't have to give a reason) for a period of 2 years it is going to lead to exploitation.

Just look at the incentives you are setting up here for the business world. You are saying that anyone 26 and above is very difficult to fire (I'm not going to argue that point with you now because I don't know enough about it) but anyone below 26 you can hire and fire at will for 2 years and since these would primarily be inexperienced people you can pay them cheaply too - the price of an entry level job right? Fine. So now you are approaching the end of the 2 year period, when it gets "almost impossible" to fire someone. The incentive there is crystal clear, you are better off firing the person since you don't have to give a reason and going out to hire some new graduate for less money.

You can't do this with all aspects of your business but there are a lot of jobs where something like that wouldn't present a problem at all.

That is completely ridiculous and the youth in France have every right to be protesting about it. What they should be doing is removing restrictions on firing anyone, regardless of age - problem solved. And by that I mean making it "possible" instead of "impossible" as everyone is claiming, but a reason should always be given.

If you want to continue to argue that the youth of France are the problem then provide some proof that they don't get hired. I've seen that mentioned more than a few times in almost every article I've read and I haven't seen a shred of proof yet. It is just tossed out there and because it is the Economist ot the LA Times or the BBC we are supposed to take it at face value without any proof.

I mean seriously Vermillion, do you think that creating a law where someone under the age of 26 can be fired for a 2 year period for any reason without giving a reason is a good idea?

It's called employment at will and is generally the law in the United States.

You can quit your job at any time without consequence. Similarly your employer may fire you at any time without consequence. The reasoning is that employment is a mutual freely chosen exchange: you exchange your labor for the employers money. If either party feels they are being unfairly treated in the deal, they are free to end the deal (and the employment).

Sure you might think that there is this huge incentive to smoosh the little guy, but that really isn't the case. Employers need employees and are generally inclined to keep them happy. Provided the employee is productive, that is. You might think it behooves an employer to change employees regularly to keep wages down, but wages are small compared to the cost of hiring and training new workers every so often. The system works in the US, why not in France?

The rub here is that the law seems discriminatory. It enacts employment at will, but only on a select group of people (in this case, those under 26). In my view, laws should apply to everyone, not just to a certain group.

Is the law justified from an economic perspective? Even if it is, is it worth all of the economic damage resulting from protests?
I think the law is economically correct, but discriminatory. It should either apply across the board to all workers, or to none. I don't think the protests were anticipated (certainly not to the degree they have happened), but as long as protests are short-lived and non-violent (not necessarily the case) the students have the right to protest and the government has the right to hold its ground.

Is it worth it? France's economy is in the proverbial dumpster. They need to change their economic policy to spur the economy. The EU's growth is less than half that of the US over the last few years. Unemployment is twice that of the US. France does not have the cheap labor of Asia nor the high productivity of the United States. It is stuck in the middle.

What should the French government do about this situation?

Change is needed, however political unrest is bad for business. The French government should throw these students some kind of bone to appease them, making it a win-win situation. Maybe reducing the probationary period to one year would do it.

If only it were that simple Amlord. The majority of states that are at-will employers have three exceptions. You can check out the source PDF at the BLS (published Jan 2001). There's a nice little chart for you on page 4.



So as you can see Amlord, our laws aren't even close to the same thing as the French law. Furthermore, as a matter of practicality almost any company out there will not fire you without cause. A reason is almost always given usually accompanied by documentation. This is because of our legal system, wrongful termination suits etc.

But getting back to the issue at hand I really can't see how anyone can come to the conclusion that this a solution to the problems that France faces. Why focus the law on this age group and take it to the extreme? Whynot enact laws for the entire workforce or look at other causes for this unemployment?

No one here has shown that the youth of France are the problem here and without that evidence it appears they are being targeted with this law unfairly.

The term "lay-off" is the politically correct version of "fired." So the only change in position you and I have is that you believe companies should be able to fire ALL workers and I think companies should be able to fire only the BAD workers. Companies should not be able to fire people because it will yield more profit. That's greedy and immoral.

Let me pose to you two situations:

Company is reporting huge losses, current staff levels are no longer sustainable.

Should the company...

1. Fire off workers, and try to get itself back on its feet.

or

2. Keep the workers, and collapse.

Programing company gets big project around once every two years. A large staff is needed to do a project, but not enough money is made from one, to pay the employees to do nothing during the intermissionary periods. Charging more for project isn't an option due to foreign competition.

Should the company...

1. Reject large projects, and leave large numbers of people who could have used temporary jobs, unemployed.

or

2. Accept large projects, and give out abundant short term jobs (and not being stupid, the employees will know what they are getting into advance).

Companies grow and decline, and workers are often needed for temporary purposes. Thats just how the world works.