Wednesday, March 15, 2006

A point missed

Bookdrunk writes about the current student protests over working conditions in France.
The intention is to make the prospect of hiring young people more attractive for small businesses in particular while reducing high employment in the 18-25 age group. However, it does so by offering deeply unattractive working conditions to those same young people. Would you accept a job where your employer could fire you with little or no notice, and little or no reasoning? What if you have a young family to support?

I think that BD has missed the point here; so moribund and inflexible are France's working conditions that it is not a choice between a secure job and an insecure job: it is a choice between an insecure job and no job at all.

The French employment problem is a classic example of what happens when you do not allow mobility of labour, i.e. hiring and firing. The point is that most employers do not want to fire someone who they have trained to do the job; that is a loss of investment, so the whole problem of your employer being able to fire you "with little or no notice" is not really relevent.

If you are so bad at your job that your employer feels that it makes more sense to sack you, despite losing the time (and therefore money) invested in you then, frankly, you have no one to blame but yourself. And if you have a young family to support?—well, that should spur you on to work harder to ensure that you do not get fired.

The problem in France is that it is so expensive to fire someone that you need to be very sure that you are picking the right person for the job. Furthermore, that person is so expensive to employ, both in terms of employer's tax contributions and because the French work only a 35 hour week (and are therefore less productive and less able to earn income for their employer), that French employers will hire fewer workers. And, of course, training someone to do the job also costs more than in, say, the UK.

Europe as a whole is going to have to learn these painful lessons: you can have a US-style flexible labour market with high job growth, or you can have the expensive, inflexible, socialist labour model. One leads to growth and low-unemployment, the other leads to... well... student riots.

UPDATE: Bookdrunk clarifies his point, i.e. that the students are rioting because the rules have changed.

1 comment:

BD said...

That's sort of my point: if the choice is between an extremely insecure job and no job at all, having no job suddenly doesn't look that bad - especially if there's some kind of minimal (or not so minimal) welfare state to support you. Is that a stupid economic situation? Yes. Is painful change needed? Yes again.

Should the French government be suprised that this plan is deeply unattractive, particularly amongst those who have gone to university in the assumption that it would give them a leg up in the labour market and a greater chance at job security? No.

Shorter me: 'why so suprised?'

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