TOPICS > Economy

Clashes Grow in France Over Labor Law

March 24, 2006 at 12:00 AM EST

TRANSCRIPT

RAY SUAREZ: Plumes of smoke billowed from some of the fanciest neighborhoods of Paris yesterday after the most violent protests yet against France’s new employment law.

Police clashed with hundreds of students and union members just blocks from the Eiffel Tower after a small number torched cars and smashed store windows. More than 600 people have been arrested in the last two weeks.

Under the new law, passed this month in parliament, employers could fire new workers under the age of 26 without cause during a two-year trial period. The law is aimed at reversing youth unemployment.

As many as half the youths in poorer Paris suburbs are unemployed, many of them immigrants. Joblessness was one factor in last autumn’s riots.

Opponents say the law reverses a generation of job guarantees and other social protections for all French workers. The new law was introduced by Prime Minister Dominique de Villepin.

ALEXANDRE COUSIN, French Protestor: We say no, no to his propositions, no to division of society.

RAY SUAREZ: Polls say two-thirds of French people oppose the law. It’s created sharp divisions in the parliament and in the ruling party. But today, French President Jacques Chirac said he won’t bow to street protesters and warned against further clashes.

JACQUES CHIRAC, President of France (through translator): Yesterday, there was violence that was intolerable and unacceptable. Some vandals joined the demonstrations, and they committed unacceptable crimes against people and property.

I asked the government that those vandals, who had nothing to do with the demonstrators, should be pursued and severely punished, because their actions were unacceptable.

RAY SUAREZ: Unions have again called for a one-day, nationwide strike Tuesday to protest the measure, which is supposed to take effect next month.

Two French views now. Alexis Debat is a senior fellow at George Washington University’s Homeland Security Policy Institute and a consultant for ABC News. He moved to the U.S. from France four years ago.

And Frederic Viguier is a sociologist and assistant director of New York University’s Institute of French Studies. He’s lived in the U.S. for the last four years.

Alexis, what does the new law allow French employers to do if it goes into effect?

ALEXIS DEBAT, Senior Fellow, George Washington University: The new law basically is aimed at French graduates under the age of 26. It sets a trial period of two years, during which the employer can fire them at a very short notice and with very little red tape.

RAY SUAREZ: So why is that a significant departure from the current law? If you had a 24- or 25-year-old employee now, you wouldn’t be able to fire them easily?

ALEXIS DEBAT: Oh, yes, the French labor code is one of the strictest in the world. An employer has to justify his decision or her decision to fire an employee, and this justification can be challenged in courts. And in many cases, the employee can sue for damages. I mean, it’s a very inflexible system.

RAY SUAREZ: Professor Viguier, some of the protesting students have called that prospect of being able to be fired more easily something that would make them into Kleenex workers, and we saw in the taped report students wearing garbage bags. Is that the way that opponents of this law see it, that it would make workers too expendable?

FREDERIC VIGUIER, Assistant Director, Institute of French Studies, NYU: Well, indeed, they fear that it will create an opportunity for employers to get rid of them before their qualifying period expires.

And so that, ultimately, the law that aims at improving the terrible situation of unemployment among the youth would actually create more prohibitive effect and give way to a situation whereby it would be still extremely difficult for young people to have steady jobs and to start their lives in the job market.

RAY SUAREZ: Professor, do you think this change in the law would create more jobs for young people?

FREDERIC VIGUIER: It’s argued by most economists that it would, indeed, create some more jobs, but apparently, the assessment is not wonderful. And it doesn’t address what is France’s major issue, which is the opposition between two segments of the labor force, one, which is, indeed, highly protected and benefits from strong security; and another one, about 20 percent of the actual labor force, which is living in precarious situation.

RAY SUAREZ: Alexis Debat, what do you think? Would it create more jobs for young people?

ALEXIS DEBAT: I think, definitely, there’s no question that it would. And I think the debate — I mean, the choice right now is between some employment, some imperfect employment, and no employment at all.

I think the law recognizes a fundamental reality, which is that the employer sits on top of the food chain; the employer decides whether or not to create jobs, not the employee, not the government. The employer makes that decision, and this law makes it easier for the employer to make that decision.

RAY SUAREZ: But under the current law, are employers reluctant to create jobs because they can’t fire young workers, they can’t use them as a contingent workforce?

ALEXIS DEBAT: Of course. The system is very inflexible, and an employer has to think twice before hiring someone, because he knows that this person will have to remain in his or her job, regardless of the economic situation, regardless of whether the business situation is good or bad.

And in many cases, this dilemma is resolved by the employer making the decision to not create jobs, to not run the risk of creating more fat for his company, and not being able to cut that fat when the economy goes south.

RAY SUAREZ: Professor Viguier?

FREDERIC VIGUIER: This statement is actually not true. And surprisingly, Prime Minister Dominique de Villepin did not get any support initially from the employers’ lobbies, who were quite reluctant to see this law imposed at national assembly without any debate, because they feared that it would lead to the current situation, first.

And then they also feel that they have many possibilities already to hire employees for short-term, precarious contracts, so that they — it wasn’t actually pushed by employers, ironically. It’s a decision that the government took by themselves and with little consultation of employees’ unions, on the one hand, but also employers’ lobbies, and serious economists.

So we have a very paradoxical situation where everybody agrees in France that things do need to be reshuffled, changed in order to improve employment, but this law doesn’t convince anybody, even in the ranks of Prime Minister Dominique de Villepin.

RAY SUAREZ: Well, what do you make of the professor’s point, that the prime minister didn’t lay the groundwork for this and has opposition even from some of the people he might have normally had as allies?

ALEXIS DEBAT: Oh, absolutely. I think, well, first of all, the professor’s statement that the employers’ union was against the law is not true. The employers’ union actually said it was against the law because it didn’t go far enough in making the labor code more flexible.

I think, simply: right reform, wrong method. De Villepin wrote his law without consulting the labor unions or the student organizations. I think it says a lot about how the French political elite is totally disconnected from its people, and this leads to very serious tensions and to a situation where, essentially, the street is able to overturn decisions made by democratically elected governments and parliament. I mean, it’s a highly undemocratic situation that de Villepin has put the country in.

FREDERIC VIGUIER: Well, a government it’s not elected; it’s appointed by the president. And the national assembly didn’t have any opportunity to debate.

The bottom line, I believe, is that the main issue of the French job market has not been addressed by this new law. It doesn’t solve the main problem, which is inequalities between different categories of employees, and it actually creates one more category that is going to suffer from strong inequalities.

So, ultimately, it doesn’t fix anything; it actually worsens the situation of the young, and that’s probably why they are so profoundly concerned and ready to fight against it.

RAY SUAREZ: Professor, briefly, before we go, would a law of this kind bring France more into the direction that other European countries are going? They’ve all been wrestling with high employment. Has it become easier to fire people in Germany, in Britain, in Italy, and other places?

FREDERIC VIGUIER: Yes, it has, and it also has in France.

RAY SUAREZ: Without this law?

FREDERIC VIGUIER: Without this law, and for quite a long time, and our statistics show it.

RAY SUAREZ: Well, that’s all the time we have for tonight. Gentlemen, thank you.