The French President’s Labor Reforms are Necessary, but Outpacing Employment Safeguards
In late March 2018, French rail workers went on a nationwide strike, causing massive delays in the country’s subway systems. Hordes of Parisian commuters could be seen exiting over-crowded cars as they returned from work hours late. And yet, this is just one of many protests in the past few months from civil servants and union members alike in France. Since passing labor reforms in August 2017, the romanticized popularity of President Emmanuel Macron has been thrown for a loop. Although he was elected by a wide margin, thousands have opposed the lack of job-for-life guarantees and meager retirement benefit plans of his more flexible labor laws. Yet this uptick in protests does not necessarily mean that reforms have been unsuccessful. On the contrary, his efforts to overhaul the indecipherably complex French labor code are overdue, and already improving growth. Employee and benefit cuts are expected to immediately accompany these newest reforms and improve national productivity, profit, and innovation. However, the National Assembly must also improve unemployment programs to ensure fair firing practices and improve long-term economic stability.
A notoriously thick red book symbolic of France’s historical socialist republic, the Code du Travail is lauded by unions but loathed by employers. France’s largest unions see the 3,324 page code as key to protecting employees from exploitation since 1910. Yet employers are often paralyzed by the Code’s dirigisme (regulatory interventionism), which demands a costly process to hire and fire employees. Modern companies see these conditions as partly responsible for the Euro’s moderate performance, France’s stagnant GDP, and its consistently high 10% unemployment rate. Youth unemployment rates are even higher, long standing near 25%. Macron took on labor reform last August as a way of revitalizing the French economy, successfully passing a bill that overhauls exceedingly rigid restrictions. …
But while business is booming – and desperately needs to – Macron has yet to uphold the second part of the overhaul bargain.