Tough call for France

France certainly has its share of problems these days.

First it was Muslim youths rioting over the accidental electrocution of two Muslim boys running from the police. Now it’s youths of all stripes, rioting over a proposal to allow employers to fire, without explaining their rationale, employees younger than 26 who have been on the job less than two years. France’s labor unions are threatening a strike if the proposed law is not withdrawn.

The French government is desperate to find a way to curtail the country’s growing unemployment problem – now sitting at 9.6% (roughly twice the US rate.) Unemployment among French youth is 23%...rising to 50% in some of the poorer neighborhoods.

The French are seeing their social welfare chickens coming home to roost.

French workers feel entitled to job security; youths feel entitled to a secure job. Industrial employers wonder how in the world they’re supposed to compete in the world market with a workforce structured more for the lifestyle of the employees than for the competitiveness of the company. Is it any wonder a collision has occurred? France must have a strong, vibrant economy to stay among the world leaders…to cave in to the leisure-loving anti-capitalists/anti-industrialists is to put France on the fast track to global irrelevance.

To compete in the world, a business must be able to provide a good or service which has advantages over its competition. The advantages may be in the areas of innovation, cost, availability or quality, but it must give the world a reason to choose its product – it’s a big world out there with a lot of alternate choices. The French workforce, by clinging to high salaries, very limited work weeks and ironclad job security, are crippling their businesses. An inability to sell enough goods or services translates into an inability to provide enough jobs. High salaries and immediate tenure makes hiring new workers a big risk even for those businesses in need of additional help.

I can see the reasoning behind the First Job Contract Law, even if it is only a Band-Aid measure…it encourages businesses to hire by removing obstacles to dismissing younger employees. It still does nothing to address the base unemployment problem. I can also see the potential for abuse by companies, which could burn out and discard scores of youths like the sweatshops of old.

Bottom line? People must work and have money for a society to run smoothly. When you curtail the work, the productivity suffers, which increases the cost of the product and may force consumers to choose an alternative product produced at a lower price. When you can’t sell your product, you have no money to pay your workers, much less hire additional employees.

It’s a hard decision facing the French, who are fond of their social welfare system. Entitlements or a healthy economy; leisure now or long-term prosperity? Raging unemployment or somewhat improved employment “on the bubble?”

These are questions better decided through frank discussion than frenzied protests.