Maginot labor law

In the last few days that center for democratic action, France, has experienced protests from students over a new labor law that allows discretionary firing of any worker under 26 for any reason. One wonders how a place that runs on laws to protect workers and that at least initially was ready to adopt the proposed European constitution which had tons of idiotic ideas like a constitutional right to work could adopt such a proposal. The youth unemployment rate is already into the 20% range so this presumably will exacerbate the problem. Part of the reason for the excessive unemployment is the all measure of other protections offered workers who are slightly older. Perhaps a better solution would have been to think more carefully about the myriad of laws that make it almost impossible to fire a worker at any time. The European labor laws are a wealth of odd and curious provisions that make employment decisions not unlike blind mans bluff. In those types of situations, employing anyone is a hard decision - thus, what is meant to protect workers actually harms them.

The new proposal would allow, for all workers under 26, an employer to fire an employee for no reason in the first 24 months. But what is that likely to do to employment? In the theory of the French government it would make it easier to hire the employees of that age. But the more likely result would be continued high levels of unemployment for those people. There is little incentive for them to join the labor force - especially for those young people who are finishing their studies - perhaps between 24 and 26. Why not continue your education until you are over the age discriminatory limit? Why not live off the dole?

In a continent and a country where the next couple of decades will be tough because of a continuing low birth rate, making it harder for young people to get into the labor market seems especially short-sighted. The French pension system, like many of its counterparts in the rest of the world, is tottering because of unreal expectations in financing and because the Ponzi like financing that pays current retirees with current workers is, as it is in other places, broken. Without vigorous participation by young workers the problems will only get worse. Were the government concentrating on this set of issues they would look a bit more creatively at the range of laws that makes the labor force so constrained - they might well indeed do something to give more employers more discretion but not just with one group. Remember, that this is the area of the world that some of the liberal economists consider heaven on earth because of its "worker" friendly policies.

Don't be surprised if the French parliament next tries to repeal the market. Oh, I guess they already tried to do that.