The streets are alive with the sound of solidarity. Hundreds of thousands of people have marched in Paris alone to protest French Prime Minister Dominique de Villepin's "CPE" law (Contrat premičre embauche, or First Job Contract). The law is a response to the riots of last November, when France's unemployed youth expressed their frustration with an economic model that has excluded them for a quarter century. If implemented, the CPE will allow employers to hire and fire, at will, those under the age of 26, during the first two years of employment. The law is designed to make job creation (and destruction) an easier affair. It is a colossal tactical error.
French youth can be forgiven for asking why they alone are expected to shoulder the burden of reform. Why, after 25 years of high unemployment, blocked career paths and falling wages, they should be subjected to even more economic insecurity. If the state subsidizes generous early retirement and cocoons the elderly from insecurity, why can't it do the same for youth?
If the Prime Minister had courage equal to his desire to assume the presidential throne next year, he would begin a national dialogue asking everyone to tighten their belts. But he dares not rock the boat and lose votes. Instead, Mr. de Villepin failed to consult the key players in this drama, charging ahead without preparing the ideological battleground. During the past decade, Mr. de Villepin's mentor, President Jacques Chirac, gave more than one hundred anti-American, anti-globalization speeches, so the public is somewhat perplexed when the dauphin seems bent on slipping a slice of U.S. political economy through the back door. The CPE is seen as heralding the end of the good old days of life-long job security, and the advent of a more "American" labour market, with its easy hiring and firing.
In fact, easy hiring and firing was one of the hallmarks of France during the 1950s and 1960s, at least in the private sector, when France had faith in the future and when the economy boomed.
The Prime Minister understands this, but he has erred in legislating labour flexibility in small measures. In the name of equality, he must free up the entire labour force. And in the name of efficiency, he must downsize the Code du Travail, a document that wraps French firms in miles and miles of red tape, making France, along with Italy, the least-attractive place in the developed world for the creation and growth of companies.
The parents of today's protesters needed no special laws to find jobs. Full employment took care of that. Today, if Canadian and British and American 25-year-olds are capable of securing their careers themselves, why can't their French counterparts? Because full employment comes with a price, and today's comfortably protected older French workers refuse to pay it: labour market flexibility. History records no capitalist nation -- not one -- with complex labour laws aimed at protecting existing jobs that also maintained full employment for a decade. The Swedes and Danes understand this; most French people do not.
A law targeted at helping young workers will surely end by stigmatizing them. Should a 25-year-old be treated as a second-class citizen, worthy of "special" treatment, like a female worker in the 1890s? If the CPE goes forward next month, companies will hire workers, only to fire them just before the two-year trial period ends -- just as they currently chew up and spit out tens of thousands of poorly paid interns every year. The best way to "humanize" the economy is to run it at full steam. Full employment puts bargaining power in the hands of workers. It gives them exit options. French youth need full employment, not another law passed in their name.
But the types of policies required to bring about full employment are deemed "unsolidaristic" so they are not introduced. A quarter-century of high unemployment has turned France into a nation of suspicious minds. Before the French accept the idea of freer labour markets, they must be reassured the state will catch their fall, should they lose their job. But France's adult-education sector is small and job-retraining centres are scarce (there are many more in Stockholm than in Paris, even though Paris has 10 times the population). Small wonder, then, that most French people refuse to accept that a bit more job insecurity will lead to more job creation. A veil of nationalistic ideology ensures the public's ignorance of the merits of other social models. Mr. de Villepin's opponents discredit him by associating him with the Thatcherite path, but they
never admit Scandinavia loosened its labour laws during the 1990s without increasing inequality
substantially.
For 20 years, the comfortable French middle class has said: Yes, we want reform, but not this reform, and only as long as someone else pays for it, and provided that it does not resemble "Anglo-Saxon" reforms. If the CPE goes forward, it will help to reduce youth unemployment. But the government will reap no political reward for a reform it has failed to justify in the intellectual sense. France needs a centrist politician willing to make peace with capitalism and defend the best components of the welfare state. Mr. de Villepin must stand his ground. The CPE law is flawed, but the way to correct this is through democratic, parliamentary means. All future reform depends on his defence of democracy against the demagogues. Let Mr. de Villepin be defeated -- if he must be defeated -- with the ballot box, not with the barricade.
Should foreigners care? Yes. If France continues on its current course, the sky will not fall, but the protectionist tide will rise. The European project may come crashing down. If this happens, France will wash away the gains from trade it has made over the past few decades. France, Europe, and the entire world will be a poorer place.
Timothy B. Smith, who teaches history at Queen's University, is author of France in Crisis, published as La France injuste
in France.
