French youth’s protests against labor market reforms have far reaching implications for all countries around the world, not just France, struggling to integrate young people into the labor market. Two quotes from the Christian Science Monitor’s story on this capture the essence of the debate well (at least I think they do):
“Today, the logic is to say that we must do everything to prevent unemployment, so companies should not be able to lay workers off,” Laurence Parisot, head of the French employers’ federation argued recently. “But the real question should be how do we make getting a job easier?”
“Explaining that job security means getting a job, not keeping your job, is a hard sell,” says Olivier Blanchard, a professor at the Massachusetts Institute of Technology in Boston and adviser to the French government. “If you have an open ended contract you are not eager to give anything up,” he adds. “It may be a catastrophe for the economy generally, but people care most about their own jobs.”
I just think of myself as an owner of a firm, such as the web development company, mentioned in the story. What would I do if faced with such stiff labor regulations? Did anyone say – outsourcing?
Of course, it is not that easy – because employees’ view of job security, and I am repeating myself here to make a point, is different from how employers view it. In that regard, I also wanted to mention that the U.N. is currently going through this whole outsourcing debate, and the staff at its headquarters does not seem to be too happy about it. From what I’ve seen, the staff is particularly unhappy about “outsourcing and telecommuting a range of UN services, including translation, editing, printing, publishing, payroll, medical and staff benefits, and information technology support.” I am surprised to see such a strong objection to creating/supporting jobs in developing countries coming from the staff of a global organization, which deals extensively with economic and democratic development issues.
I’ll stay on the side of the employers in this debate. What not only France but also other countries around the world are learning and re-learning today is that restrictive regulations don’t work. They cripple employment prospects and increase unemployment, rather than decreasing it. Still have doubts? Check out World Bank’s Doing Business Database stats on hiring and firing workers and compare them to countries’ economic standing.
Published Date: March 08, 2006