I refer to Tom Walker's contribution:
Despite the apparent success of the increase in employment in France as a
result of a shorter working week of just over half the working population
from 39 hours to 35 hours, I am not convinced that the "lump of labour
fallacy" has been contradicted.
The increase in employment of 285,000 is, of course, far less than the
700,000 that was confidently forecast by Lionel Jospin four years ago when
the plan was instituted. How much of the 285,000 was actually caused by the
reduction in working hours is another matter -- some of it may well be due
to employment in new businesses. But if we grant that all of the increase
was directly due to a horizontal displacement of work to previously
unemployed people, then there's still a limit as to how far this can be
stretched. The basic overheads costs per worker will have increased,
productivity will have decreased and some firms will undoubedly go out of
business.
If it's been so successful why doesn't the French government go further?
Instead of merely extending the present law to employers with fewer than 20
workers next year, why isn't the working week reduced even further to
30-hour week? Or why not 25 hours? Or 20 hours?
The answer, of course, that unless a firm can keep on increasing
productivity or extending its market in step with reducing working hours
then there's a limit as to what can be achieved. Every business is limited
at any one time by its existing technological procedures and the size of
its market for goods or services at a realistic price.
Also, it's necessary to bear in mind that the increased employment has not
been cost-free. The French government is subsiding employers to the tune of
1.5 billion francs and this has to be paid for by increased taxation or
from reduced social benefits to the needy or the remaining unemployed.
As well as straightforward increased productivity by technological or
procedural means, many employers have taken the opportunity of
renegotiating hours and conditions of workers by insisting on new
unsociable patterns of work -- more night shifts, more work during
traditional holidays, compulsory overtime when needed, and so on. But even
these, once again, have their limits.
It's far too soon to judge the success of the French experiment. It is fair
to make two points:
(a) an increasing number of firms are now relocating in England every year
in order to escape increasing regulation by the French government;
(b) Lionel Jospin is seeking re-election next year and will do almost
anything to make himself popular with the ordinary voter.
Keith Hudson
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Keith Hudson, General Editor, Calus <http://www.calus.org>
6 Upper Camden Place, Bath BA1 5HX, England
Tel: +44 1225 312622; Fax: +44 1225 447727;
mailto:[EMAIL PROTECTED]
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