Macron learns from past as he pushes for jobs reform
With the unions divided and his mandate still fresh the president is in a good place, writes Tim Wallace
Protests defeated François Hollande when he tried to shake up France’s jobs market. Jacques Chirac backed down when his public sector reforms met fierce resistance on the streets.
Nicolas Sarkozy faced down prolonged strikes in his battle to raise the retirement age, only for his successor to chop it back down to 60. Now it is Emmanuel Macron’s turn. The energetic young president unveiled a wave of reforms on Thursday to the country’s troubled jobs market, in the hope of cutting its seemingly permanently high unemployment rate.
The cost of firing workers will be capped. Unions will no longer set pay for entire industries – employers will negotiate on a company level instead. Workers’ committees, which are mandatory in big firms, will be cut down. But it is not all one-way traffic. Minimum payouts to redundant workers are going up, too.
In total, 36 measures have been proposed. One key aim is to make it easier to sack workers, and so to encourage companies to take staff on in the first place. Another is to end the painful divide between those in long-term jobs who are almost unsackable versus those in temporary roles with regular spells of joblessness.
“Nobody can claim that the labour code today helps create jobs,” said Edouard Philippe, Macron’s prime minister.
The question of success has two key components. Will Macron be able to pass the measures in a country renowned for its rejection of serious reforms in the past? And are the changes bold enough to have a meaningful long-term impact?
Aware of this history, President Macron consulted vigorously on these reforms. That move appears to have been rewarded in the response to his proposals – CGT, the hard-line union, has called for strikes on September 12, but others, including the more mainstream CFDT, have not.
Force Ouvriere, another of the country’s most powerful unions, has also indicated behind closed doors that it will not oppose the reforms. Concessions include the requirement that firm-level decisions on pay and working conditions require the support of unions representing a majority of workers.
As a result, the president looks likely to escape unified action from across the trade union movement.
Parliamentary opposition is also unlikely to be a major problem. Macron’s electoral victory was quickly followed with substantial successes in parliament, and deputies have agreed to let the reforms pass by presidential decree rather than facing scrutiny, line by line, in the national assembly.
He also introduced the reforms early in his presidency when he has popular support on his side – and can allow time for the impact to kick in before he is next up for election. “Inevitably in France, whenever you attempt labour market reform you will get some street pushback, and that will be the case here again,” says Cathal Kennedy, European economist at RBC Capital Markets.
“But what is important is that Macron has not made the same errors as the Hollande administration made – he is tackling this issue early, so still has the popular mandate there fresh.
He is not pushing it through, he has negotiated with the unions. And if you believe opinion polling, there is a mood among the populous for labour market reform and job creation.”
In terms of the economic impact, the importance of a flexible labour market is difficult to overstate. France can look to its major neighbours for evidence of that. To the east, Germany
‘Macron has not made the same errors as the Hollande administration made – he is tackling this issue early’
Fresh mandate: Emmanuel Macron is introducing the jobs market reforms early in his presidency, when he still has popular support and can allow time for the changes to have an effect before the next election