Why are French unions striking? They are protesting the changes President Francois Hollande and Prime Minister Manual Valls would make to France’s 1999 labor laws. The Socialist Hollande government is looking to add more flexibility to France’s rigid 35-hour workweek. The 1999 laws were enacted in an attempt to boost employment. By imposing prohibitive minimum payments for overtime, the rationale was that companies would hire more workers rather than request current employees to work overtime. The jobless rate in France is currently 10.5% (youth unemployment is at 24%).
According to the BBC, here are the main points to the French labor reform bill:
- The 35-hour week remains in place, but as an average. Firms can negotiate with local trade unions on more or fewer hours from week to week, up to a maximum of 46 hours.
- Firms are given greater freedom to reduce pay.
- The law eases conditions for laying off workers, which is strongly regulated in France. It is hoped companies will take on more people if they know they can shed jobs in case of a downturn.
Mr. Valls has used “special constitutional powers to bypass the lower house and push the measure directly to the Senate—the second time the government has taken extraordinary steps to enact reforms,” according to the WSJ.
It’s a sign of the depth of France’s economic distress that even a government of the left recognizes the need for reform, and that it is pressing ahead despite the vehement opposition of its traditional political base. If a Socialist president can succeed in doing this in France, there might be hope for the rest of sclerotic Europe.
If Thomas Sowell’s Basic Economics has not been translated into French, perhaps it’s time. Freedom, he explains, is keyed to free markets, capital, supply and demand, and pricing. Dr. Sowell lays out the seemingly complex (and often boring) subject of economics in a highly readable, concise and entertaining form.
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