3/15/2006

French Employers Can Now Fire More Easily

In a right-to-work state, we may take advantage of the ease with which we can hire and fire employees. In a post on the Atlantic Blog, it is explained that, for the first time, French employers may now fire employees without giving any reason. This only applies to employees under 26 years of age that have been in the job for less than 2 years. Some in France are upset by this new law. However, it seems that this could be a step in the right direction if France is to overcome their unemployment issues. According to the blog, unemployment rates are at 20% among young workers, with some areas reaching as high as 50%. Because it is so difficult for employers to release employees, many inefficient workers have held onto jobs that they should not have. By allowing employers to fire workers, unproductive workers will no longer be guaranteed a job, resulting in two possible consequences. First, unproductive workers will become more productive, allowing the employer to be more profitable. Second, unproductive workers will be fired, making room for productive workers. Either way, this new law will allow better opportunities for workers looking for jobs and for employers looking for better workers.

5 comments:

noah said...

I think this is a step in the right direction for France. It will be interesting to see if this small change will create a noticeable drop in the unemployment rate.

Ella said...

It sounds like this would benefit skilled workers who are looking for jobs and employers who need their workers to be productive. Europe has gone a long way from capitalism in it's truest sense and staggering unemployment and a host of other problems have resulted. Now in the face of global competition, it looks like some governments are finally willing to cut through some of the red tape and let organizations operate as they see fit. From an economic standpoint this deregulation should lead to positive results.

Ashton said...

I'm not sure I understand how this law would help unemployment. If French companies are now able to fire people without reason, yes it will be good for new people trying to find jobs, but at the same time what about all the people that are getting fired. Wouldn't the unemployment just stay the same?

Dr. Tufte said...

Ashton's point is correct as far as it goes, but there is also the issue that there is little way for a poorer young worker in France to establish any sort of work record whatsoever. So, it isn't so much unemployment as never being employed which may change.

Commenting on this 3 weeks after the post went up, we now know that the French government caved in on this proposal.

cjinspector said...

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There are also videos about the economy. You may comment on my blog if you wish.