France or the Imaginary World :)

April 1, 2006

There is something highly ironic about seeing hundreds of thousands of students in France demonstrate against the CPE “contrat de première embauche”, a more flexible labor contract for those under the age of 26 with more flexible redundancy rules for two years after which full job protection kicks in.

In the past student demonstrations have been a force for social change (e.g.; 1968 demonstrations); however, now the students are demonstrating to preserve the status quo. The revolutionaries have become conservative! It would be partly understandable if the status quo was worth preserving, but a society that has 23% unemployment rate for people below the age of 26 and unemployment rate as high as 50% for the youth in the urban ghettos “les banlieues” is not creating opportunity for its people and itself!

By fighting the CPE, most students believe they are fighting against institutionalizing insecurity and to preserve the full time job for life that rightfully awaits them upon graduation. Unfortunately, the ideal of the “job for life” that the students are fighting for is an illusion that has not existed in decades whose mirage survives only in certain parts of the public sector. In a competitive environment where companies continually adjust to demand and changing conditions, expecting them to have a fixed labor size is incongruous. Even Japan had to shed its policy during the deflationary period of the 1990s.

As a result, the students are really demonstrating to preserve an extremely unjust society where the insiders – those who get jobs – are protected at the expense of a large numbers of outsiders who can’t get jobs.

That is not to say that the CPE cannot be criticized. The, unelected, prime minister pushed it by decree without parliamentary debate – a highly undemocratic process that gives the impression that the idea would not stand debate and scrutiny. If anything it’s about time France had a real debate about where it is and where it is going.

Moreover, in its own way, the CPE continues to entrench a two speed society – those with temporary flexible contacts and those with the traditional protected contacts. This may not give a great incentive for employers to give traditional full time contracts once the two year CPE is over. Wholesale liberalization and moving to “at will” employment for everyone would be far more effective, but suggesting that in France is a sure way of getting stoned.

That is not to say France should ditch its attachment to social equity. Each society should make the moral and value judgment to select the amount of social equity it seeks to have. France would likely preserve its more redistributive choices than the U.S. However don’t sacrifice efficiency on the altar of fake equality and ideology!

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