The following is an excerpt from Bloomberg.com | September 4, 2017 |
President Emmanuel Macron’s new government has unveiled its plan to overhaul France’s notoriously rigid labor market. It includes useful measures that should help to boost employment, and it’s a good first step. Unfortunately, though, it doesn’t resolve some deeper-rooted problems, in particular the unduly sharp divide between workers on temporary and permanent contracts -- the underlying cause of France’s so-called dual labor market.
For decades, French trade unions have wielded great influence, striking country-wide wage agreements that apply to all companies regardless of local conditions. Compounding that problem, they’ve also opposed efforts to make permanent contracts more flexible, leading employers to offer less secure, temporary contacts to new hires. The result is both inefficient and unfair.
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