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2017-10-27 05:12:03
Nordic-Style Designs Sit at Heart of French Labor Plan

PARIS — The people running France would like to clear up what they contend is an unfortunate misunderstanding: They are not ditching the egalitarian ideals of French society for the ravages of global capitalism.

Yes, the investment banker turned president, Emmanuel Macron, has decreed alterations to the famously voluminous French labor code that make it less of an expensive hassle for employers to fire workers. He unabashedly champions greater risk as a key to rejuvenating the moribund economy.

But the changes unleashed are supposed to come with greater support for workers via expanded unemployment benefits and revamped training programs. It is a plan modeled on that veritable workers’ paradise, the Nordic countries, and not on brutal, winner-take-all societies like the United States and Britain.

To sell its changes to a dubious French public, Mr. Macron’s administration has even imported a term coined in Denmark: flexicurity, a portmanteau of flexibility and security.

“We need to adapt France to globalization while still being French,” said Antoine Foucher, chief of staff to the French labor minister, pushing back against the notion that neoliberal economics has seized the land of Rousseau. “We need flexibility, but also a new kind of welfare system, with more rights for people taking risks, and more rights for people who are not finding their place in globalization.”

Yet in draping labor reforms under the banner of the Nordic way, Mr. Macron’s administration confronts considerable skepticism.

Economists doubt that the Nordic model can be transplanted from Scandinavia — where dealings between unions and employers are convivial — to France, where strikes that bring life to a halt are a cherished ritual.

Major unions see a plot to strip away labor protections with happy talk of government support that will never materialize. Many doubt that Mr. Macron can find the money to bolster the safety net.

“Flexicurity is just fancy packaging,” said Amandine Crespy, a political scientist at the Institute for European Studies at the Free University of Brussels. “So far, it’s all flexibility and no security.

“Mr. Macron is handing out tax cuts to the richest 10 percent,” she continued. “They will do the labor reforms, and then they will tell you that there is no money for anything else.”

That France needs change is a given. Its unemployment rate is 9.5 percent, and has risen even as the picture has improved in countries worst hit by the European crisis like Spain, Italy and Portugal. Nearly one in four young people is unemployed.

But how to generate more jobs provokes fierce argument.

Unions pin blame for high unemployment on weak demand for goods and services. Pay workers more, they say, and spending will be unleashed through the French economy, generating jobs.

The unions are often caricatured as intransigent obstacles to progress, and they have a way of amplifying that image. Ask the CGT — a major union that has struck the most combative stance against the changes — for its plan to fix France. Its leaders call for cutting the workweek from the current 35 hours to a mere 32. Then, they say, more people will be needed.

To the government, this type of thinking — prime material for French lampooning — exemplifies how the country has failed to adapt. Renault, the French automaker, now manufactures cars in Romania, where wages are a fraction of those in France. Restricting work invites an exodus of jobs to lower-wage countries.

What France needs, Mr. Macron asserts, is flexibility that can free entrepreneurs from the strictures of an outmoded labor code. The changes are supposed to make it possible for start-up companies to pay lower wages in their early stages, rather than having to hew to national labor contracts that govern janitors, agricultural workers and people on assembly lines.

In contrast to years past, when labor militancy killed stabs at an overhaul, the government has this time won the cautious assent of some unions. Strikes in recent weeks have failed to inflict much disruption, underscoring a sense that the changes are essentially a done deal.

Still, the CGT vows to battle on, accusing the government of an appalling attack on the rights of laborers.

“Macron is suggesting a total societal change that goes against what has guided French society since the end of World War II,” said Manu Blanco, a board member of the CGT. “He is suggesting a model of extreme individualism, where workers earn hardly anything.”

Whatever the merits, Mr. Macron’s move does pose a historic challenge to power dynamics between working people and their bosses. Under a law adopted in 1884, unions were enshrined as the sole official representatives of French employees. They have maintained broad authority over national wages and working conditions ever since.

Over the last two decades, companies have extracted the right to hire temporary workers. The fresh changes allow smaller companies to negotiate directly with workers, while enabling larger companies to work out agreements with unions tailored to local conditions.

“The fundamental inspiration of these reforms is the idea that protection of workers has gone too far,” said Michel Pigenet, an expert in the history of labor movements at the Sorbonne in Paris. “That, in a globalized system, these protections are a constraint on competitiveness and the economy.”

The government and its advisers frequently cite Germany as an inspiration for their labor plan. After German employers gained greater latitude over wages in the 1990s, joblessness dropped significantly. German companies became more competitive.

But much of that boost came via a drop in pay. Poverty has risen in Germany along with the numbers of people depending on government aid. This has corresponded with an increase in part-time work.

“It’s not a model,” said Eric Beynel, a spokesman for Solidaires, a French union that opposes the labor changes. “It’s been a catastrophe.”

The new rules are directed at lowering the unemployment rate. But joblessness is at best an incomplete indicator of economic health.

In many major economies — strikingly, in the United States and Britain — the unemployment rate has fallen sharply, yet average wages are lower than a decade ago, after accounting for inflation. Many new jobs are low-paying, part-time positions.

French unions cite these realities as backing for their fight. In their vernacular, competitiveness and flexibility are just euphemisms for diminished livelihood and anxiety.

But only 8 percent of the French work force belongs to a union. The unions opposing the new rules are vulnerable to charges that they accept joblessness for the masses as the price of protecting their narrow segment of French workers — a group that trends white and male.

“Their clients are insiders, so they defend insiders,” said Agnès Bénassy-Quéré, an economist who chairs the Economic Analysis Council, which advises the French government on policy.

On a recent morning at the unemployment office in the 19th Arrondissement of Paris — an area home to many North African immigrants — people lining up for assistance tended not to see unions as a force in their lives.

“It’s hard to find jobs,” said Sara Omari, 36, a Tunisian immigrant. “It’s easier for French people.”

Economists doubt the central premise of the labor plan — that easing firing will inspire companies to hire. “In the short term, it will actually make it easier to destroy jobs,” said Eric Heyer, an economist at SciencesPo, a university in Paris. “A lot of businesses have too many people.”

The Nordic-style support system is posited as a cushion against joblessness while allowing workers to make a transition to more fruitful careers.

Given that France already has national health care, a minimum wage and generous social welfare programs, this is not fanciful. Mentioning the Nordic model to a labor economist tends to elicit the same reaction as references to Provençal cuisine for a gastronome.

But the Nordic model is as much a cultural phenomenon as a set of codified rules, a spirit of collective prosperity spanning labor and management.

“The level of confidence between the social partners is at a very high level,” said Oystein Dorum, chief economist at NHO, the main employers’ association representing Norwegian businesses in negotiations with unions. “There’s a sense from the other side of the table that wage claims must be reasonable so we can protect enterprises, and profitable enterprises lead to more jobs.”

The unpleasantries of budget arithmetic may pose the biggest challenge of all.

Mr. Macron has vowed to trim spending as he strives to comply with European limits on public debt. That imperative has special force as the French president woos German support for his proposals to further integrate the countries that share the euro currency. Winning Germany’s blessing requires that France demonstrate a commitment to European budget rules, which are revered in Berlin (except when Germany is breaking them).

Mr. Macron appears to have wrested the upper hand. Parliament will most likely ratify his changes before the end of the year. Then, the tougher challenge commences — proving that greater risk translates into greater security in a nation that has long revered equality.