France cuts work to raise jobs

Ulhas Joglekar ulhasj at bom4.vsnl.net.in
Thu Feb 3 17:57:05 PST 2000


28 January 2000

France cuts work to raise jobs By Catherine Bremer PARIS: When the French government announced plans to cut working hours, it was slammed on the right as a Communist plot and hailed on the Left as a landmark stand against the pervasive influence of globalisation. But with the cut in the working week due to become law on Tuesday, more than two years after the newly elected coalition of Socialists, Communists and Greens made it a central plank of its policies, the polemic has faded into a resounding ``So what?''. Though individual companies are struggling to cut a workweek deal with their employees --leading to administrative headaches and sporadic strikes -- the cut in hours is bringing neither the pain nor the gains that were predicted. ``The most extreme Left and right wingers are hurling criticism at this, which almost implies it's a fairly balanced reform,'' said Roger Duhomez, human resources director of northern plants at steel maker Usinor. The economy in any case is booming, forecast to grow three per cent or more in 2000 and beyond, and the jobless rate has already dropped to 10.8 per cent from the record 12.6 per cent when Prime Minister Lionel Jospin took power in mid-1997. Fears that France's radical stance would scare off foreign investment have so far failed to materialise. Direct foreign investment in France actually rose slightly to $22.98 billion in the 10 months to October 1999 from $21.1 billion over the same period the previous year, according to the latest official data released in January. Foreign companies based in France cite a healthy economy, a qualified workforce, a quality infrastructure and the country's position in the crossroads of Europe as reasons for staying on. The reduction in the legal working week to 35 hours from 39 on February 1 does not mean all French staff will work 35 hours a week from that date. Companies have to reach individually tailored agreements with their staff, and firms representing 3.3 million workers --a quarter of France's private companies --have already done so. Most have annualised working hours, allowing them to achieve productivity gains by making staff work harder in busy periods and less when times are quiet. They have also negotiated a commitment to wage moderation --many accords have typically frozen wages for 18 months. Usinor has reached a deal that encourages older staff to opt for part-time work. ``We could have achieved productivity gains without the 35-hour week, the real solution is part-time work,'' Duhomez said. ``If the 35-hour week has one merit, it is forcing companies that tend to have people sitting in offices for hours on end to ask themselves how they could organise work time more efficiently,'' he added.
>From February 1, companies with more than 20 staff are supposed to put
workers onto shorter work hours, though they still have the option of paying overtime, at increasingly prohibitive rates, until they strike a deal. Another 5.7 million employees will be covered by the February 1 law, bringing the total to nine million out of a national workforce of around 25 million. Small businesses and the huge civil service will follow in 2002. ``Globally the effect on the economy will be positive. It has to create jobs, though it's hard to say how many, and gains in productivity will quell any threat to competitiveness,'' said Credit Lyonnais economist Olivier Eluere. The wage moderation which is accompanying 35-hour agreements should also help keep inflation in check. ``Without the reform, the fall in unemployment since 1997 and a forecast acceleration in growth mean we could have seen labour shortages,'' added Roch Heraud at Credit Agricole. ``But for an average firm the 35-hour week will translate into fewer overall work hours or gains in productivity, probably a little of both.'' (Reuters) For reprint rights: Times Syndication Service
|Disclaimer|
For comments and feedback send Email Bennett, Coleman & Co. Ltd. 1999.



More information about the lbo-talk mailing list