September 22, 2015
France announces labor reforms
The French government has announced plans to reform and simplify its labor laws, including provisions for collective bargaining.
Prime Minister Manuel Valls has said draft legislation will be introduced by the end of the year, with parliamentary approval to follow by summer 2016.The legislation will be based on recommendations in a report by civil servant Jean-Denis Combrexelle, which calls for France’s 3,000-page labor code to be streamlined, and to encourage collective bargaining between employers and unions in areas which are currently dictated by the law, including working conditions and salaries.
Valls said that the reforms would give “more flexibility, but not less protection” to French workers, while Combrexelle commented that: “Because we’re a centralised country, we tend to think that collective bargaining is a form of disorder, that the right rule is the state’s rule. We need to accept that regimes can be different for employees in companies operating in the same field.”
Unemployment in France is currently at 10%, and the government is under pressure from the EU to reduce its deficit.
Ernesto Villanueva has written for IZA World of Labor about employment and wage effects of extending collective bargaining agreements. He writes that collective bargaining can “ensure common working conditions within the industry, limit wage inequality, and reduce gender wage gaps. However, several studies suggest that those benefits come at the cost of reduced employment levels, especially during recessions. The income losses of workers who are displaced because of a collective contract extension can offset the wage gains among workers who keep their jobs.”
Read more on this story at the Financial Times and Reuters.
Related articles:
Employment and wage effects of extending collective bargaining agreements by Ernesto Villanueva
Perverse effects of two-tier wage bargaining structures by Tito Boeri
Union wage effects by Alex Bryson