Men stumble over the truth from time to time, but most pick themselves up and hurry off as if nothing happened. -- Winston Churchill

All truths are easy to understand once they are discovered; the point is to discover them. -- Galileo Galilei

I never give them hell. I just tell the truth and they think it's hell. -- Harry Truman

Location: Wichita, Kansas

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Saturday, March 11, 2006

French Workers Fried - Labor Law Gauls Them

You may be following demonstrations and protests in France about legislation changing labor contracts. In the wacky world of French socialism, employment of individuals has become a tightly regulated system involving the government. Here is a brief description of how it works.

Approximately 90% of French workers are employed under a CDI, or contract of indeterminate duration, which really means a permanent labor contract. A company wanting to hire someone must declare that person with local authorities and execute a contract with them. Once you have one of these, you cannot be fired without extraordinary cause, and even then the cost of going through the process can cost the business years of legal fighting and sums of money equal to the annual profit of a small business.

Unions may impose additional restrictions and by law, any employer with more than ten employees must have an elected labor representative, and any business with at least 50 employees must also have an elected labor council, both of which call in a government labor inspector in any dispute.

France has attempted to solve it's chronic unemployment problem with the CDI, a mandated 35 hour work week, and government spending on subsidized jobs. Not surprisingly, the 2,631 page French labor code has caused some unintended consequences. Businesses are afraid to hire new employees and expand. Productivity is low because employees know that they can't be fired.

French unemployment has other causes, including high payroll taxes and minimum wage, and a troubled education system. But the labor laws are considered to be at the heart of the problem.

Well, back to the protests. At least 100,000 people protested in cities across France on Tuesday against a new law, disrupting airports and public services. This law allows a two-year contract for under-26-year-olds which employers can break off at any time without explanation. The idea is to encourage hiring younger workers, who have a 23% unemployment rate.

Younger people are upset, and so are older workers who see it as an erosion of their “sacred” right to job security. Sacre Bleu, what a mess these French have created!

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