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
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