Charles Brown
Mon, 02 Jul 2001 10:46:26 -0700
Sometimes I think, contra dialectics, France has evolved into socialism. CB (((((((( Don't sack your workers Jun 14, 2001 | PARIS The Economist The French government is making life harder for employers CAUSE and effect? Last weekend thousands of banner-waving French workers marched through Paris, denouncing companies such as Marks & Spencer that lay off workers without adequate consultation. Four days later, on June 13th, the National Assembly, in pursuit of "social modernisation", amended its labour laws to make it still harder for employers to make "economic redundancies". The minister of labour pronounced herself "very happy"; the leader of the assembly's Communists said the world of work had made "important advances"; and bosses bemoaned the perils of political expediency. The bosses have a point. After all, the chain of consequences is rather longer than a mere four days. It goes back to 1995, when the reformist ideas of Alain Jupp*, France's last conservative prime minister, provoked huge street demonstrations and, two years later, the conservatives' defeat at the polls. And it will surely go forward to next spring's presidential election and the presumed encounter between Mr Jupp*'s Socialist successor, Lionel Jospin, and France's incumbent conservative president, Jacques Chirac. Put simply, however loudly the bosses, caught between a slowing economy and ever-increasing foreign competition, demand flexible labour laws and lower social charges, Mr Jospin has no intention of upsetting the voters. That, in turn, means he can ill afford to upset the Communists. They may be electorally weak—in local elections three months ago their vote collapsed—but they are part of Mr Jospin's coalition and to have them vote against their partners would insult the prime minister's reputation as a political manager. Unfortunately for Mr Jospin, such behaviour is likely to become ever more tempting for the Communists: the lesson they draw from the local elections is that to revive their support they need to revert to the hardline tradition of the class struggle. Hence this week's vote: it should have taken place two weeks ago but had to be postponed as the Communists twisted arms fiercely enough to get a legal wording that they could live with. How much difference the wording will make is hard to say. What has prompted new legislation on "social modernisation"—jargon for improving relations between workers and employers—is a rash of layoffs at a time when the French economy is doing better than any other in the euro-zone. In 1999, for example, Michelin, a tyre-maker, announced large layoffs even as it reported record profits. Mr Jospin protested, but did nothing. This year layoffs have already been announced or mooted at Marks & Spencer, Danone, Moulinex, AOM, Valeo and other big companies. In the boardroom, such job losses are seen as a rational response to tougher competition, bad exchange rates and other realities of the global market. On France's shopfloor—and in Mr Jospin's government—they smack of the "economic self-interest" of businessmen wanting to boost shares or satisfy foreign pension funds. So the government's remedy is not the looser labour law craved by the employers, but a tighter one: assuming a company is not confronted by impossible circumstances or by irresistible technological change, it can announce "economic redundancies" only after "all other means" have been tried to preserve jobs. Moreover, it will have to negotiate with a works council authorised to offer other solutions and, if deadlock ensues, submit to the arbitration of a government-approved mediator. How will such legislation work in practice? One businessman sourly notes that of the seven countries in which Marks & Spencer has announced layoffs only France has felt compelled to legislate. He predicts a fall in foreign investment in France and a drop in its competitiveness. Maybe so, but not until after the election. In the meantime Mr Jospin is intent on winning that election. Witness this week not just more "social modernisation" but also a promise that from next year new fathers will be able to take two weeks' state-financed leave. Of course, after the election, the arithmetic could all come adrift and the workers may take to the streets again. But the difference would be that a President Jospin and his prime minister will have five clear years with almost no elections to worry about.