Sunday, March 19, 2006

Riots in France. Again.

You could be forgiven for not knowing but cities all over France are experiencing riots, car burnings, and large-scale disruptions yet again. Last night was at least the 3rd knight of such riots, but American media didn’t start carrying the news, really, until last night’s broadcasts. Must’ve been too busy trying to find people protesting the Iraq War. In any case, the reason for the riots in France is a proposed rule that would ease the process of hiring and firing of employees in France.

With commerce snarled in some cities, people asked whether Prime Minister Dominique de Villepin would stand firm on implementing the change that he says is needed to encourage hiring. The usually outspoken leader was silent Saturday.

Protest organizers urged President Jacques Chirac on Saturday to prevent the law from taking effect as expected in April.

The group issued an ultimatum, saying it expects an answer by Monday, when leaders will decide whether to continue protests that have paralyzed at least 16 universities and dominated political discourse for weeks.

"We give them two days to see if they understand the message we've sent," said Rene Jouan of CFDT, France's largest union.

The law would allow businesses to fire young workers in the first two years on a job without giving a reason, removing them from protections that restrict layoffs of regular employees.

Companies are often reluctant to add employees because it is hard to let them go if business conditions worsen. Students see a subtext in the new law: make it easier to hire and fire to help France compete in a globalizing world economy.

Youth joblessness stands at 23 percent nationwide, and 50 percent among impoverished young people. The lack of work was blamed in part for the riots that shook France's depressed suburbs during the fall.

People in the US don’t realize the staggering difference in the ability of an American company to get rid of an unproductive employee as compared to those in Europe. (The same holds true for a good employee “getting rid” of an unproductive company through resigning and hiring on somewhere else.) In France, the standard interval for an employee to “give notice” that he’s leaving is 4 months. That’s right: an employee who gives notice to his boss in Paris today will be expected to continue his current job until mid-July. I recall some of my former (French) co-workers horrified amazement when I told them I’d be gone in 2 weeks.

The real problem is that companies are required to give the same notice when they’re going to let someone go. Literally any reason the company might have to fire someone that doesn’t involve an employee shooting people in the office requires that they carry the employee for 4 months before they can drop him. You can understand how a company might be a bit nervy about hiring someone when they might get stuck for them for a poisonous 4 months trying to let him go. Those companies have to be in a position of near-desperation before they consider hiring, hence the 23% unemployment figure.

Personally, I think the proposed law is going overboard. They’d be better off implementing a “probation period” kind of thing like US companies do, where the window to just fire someone without reason is 3 months or so and then shorten the “notice” period considerably. A month should be plenty, although you could also go with 6 weeks. Whatever they decide to do, it’s clear they need to change something to become more competitive in the market. Getting the people who have become used to a life on the public largesse to agree to this will be the hard part.