La­bor re­form in France’s Macron econ­omy

Kuwait Times - - BUSINESS -

Pro­tes­tors against Pres­i­dent Em­manuel Macron’s pro­posed lib­er­al­iza­tion of French la­bor laws were on the streets of the coun­try’s cities on Tues­day. The marchers, chant­ing slo­gans and bran­dish­ing plac­ards, halted traf­fic as they moved slowly through the streets. A fringe of an­ar­chists broke win­dows; po­lice re­sponded by fir­ing tear gas. But this was no re­run of the mass marches of past years, let alone the semi-revo­lu­tion­ary erup­tions of 1968.

France’s sec­ond-largest union, the Con­fÈder­a­tion GÈnÈrale du Tra­vail (CGT) was the only one of the three main work­ers’ or­ga­ni­za­tions that took part. An­other protest, this one or­ga­nized by the far-left France In­soumise (France Un­bowed) party is sched­uled for Sept. 23. The Tues­day march­ing col­umns num­bered, na­tion­wide, in the few hun­dred thou­sand rather than the many mil­lions hoped for - the po­lice claimed 223,000, the or­ga­niz­ers 400,000. There was lit­tle ef­fect on pro­duc­tion, ser­vices or trans­porta­tion.

It was nei­ther vic­tory nor de­feat for ei­ther side. In­stead, Macron’s changes to the vast la­bor code - hir­ing and fir­ing will be eas­ier, some work­place is­sues will be ne­go­ti­ated at com­pany level - hang in the bal­ance. The CGT, the left and the far-right Na­tional Front all op­pose them, but Macron and his govern­ment have a solid, if in­ex­pe­ri­enced, ma­jor­ity in the Assem­bly.

More than his pre­de­ces­sors who tried and failed to lib­er­al­ize France’s la­bor mar­ket - the cen­ter-right Ni­co­las Sarkozy and the cen­ter-left Fran­cois Hol­lande - Macron has pinned the cred­i­bil­ity of his pres­i­dency on sys­temic, cul­tural change, a de­lib­er­ate jolt­ing of French so­ci­ety and econ­omy out of the rut into which he be­lieves it has fallen. He is con­temp­tu­ous of both for­mer pres­i­dents (he knew Hol­lande well, hav­ing been both his ad­vi­sor and Fi­nance Min­is­ter), be­liev­ing them to have given up too soon and too eas­ily. When Macron spoke, as he did ear­lier this month, of “slack­ers,” he said when chal­lenged that he meant those who re­treated from the nec­es­sary surgery on France’s body politic. The marchers, how­ever, seized on the word and put it on their plac­ards: “Macron, the slack­ers will kick you out,” read one.

The slack­ers have a point. In­deed, they have sev­eral. La­bor pro­duc­tiv­ity in France is rel­a­tively good, only a lit­tle be­hind that of the United States and the high­est of Europe’s ma­jor economies. When French work­ers work, they work well.

Though both Macron’s la­bor and eco­nomic re­forms have won sup­port from the cen­ter-right and from many econ­o­mists, France re­mains doubt­ful, even hos­tile. Per­haps the best-known French­man in po­lit­i­cal and in­tel­lec­tual cir­cles be­fore Macron was the econ­o­mist Thomas Piketty, whose “Cap­i­tal in the 21st Cen­tury” (2013) is a best seller and who has ex­co­ri­ated his coun­try both for its steeply ris­ing in­equal­ity and its hypocrisy in pre­tend­ing it is egal­i­tar­ian. Hyp­o­crit­i­cal it may be, but it clings to the myth, and per­fectly bour­geois French­men and -women may re­coil from an ob­vi­ous widen­ing of the in­come and wealth gaps.

To put ma­jor em­pha­sis on la­bor re­forms may, in any case, not be the main point. Ger­many lib­er­al­ized its la­bor mar­ket through the so-called Hartz re­forms be­tween 2003 and 2005, but un­like France the Ger­man unions were rel­a­tively mod­er­ate, wage bar­gain­ing was al­ready lo­cal­ized and in­vest­ment was ris­ing. In ad­di­tion, the costs of Ger­man uni­fi­ca­tion had al­ready been paid. — Reuters

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