By Steve Chapman: Syndicated columnist
French students and unions have been protesting for weeks now over a law making it easier for companies to get rid of employees. Under the measure recently signed by President Jacques Chirac, they may fire workers younger than 26 during their first two years on the job — for no reason whatsoever.
The demonstrators think that’s a bad idea, and they’re right.
Here’s a better one: Let companies fire any workers of any age at any time for no reason at all. Sales are off? The job is redundant? Outsourcing beckons? You part your hair on the wrong side? Don’t let the door hit you on the way out.
It may seem as though my proposal would be great for greedy corporations but lousy for ordinary workers. In fact, surprising though it may be, workers would gain immeasurably. That’s because the greatest threat to job security in western Europe is job security. The best guarantee of employment, by contrast, is no guarantee.
France is just one of many countries on the continent that give many employees something like lifelong tenure. “In France,” explains The Associated Press, “workers who land a coveted permanent contract can plan to stay at their jobs until retirement. To fire most employees, companies not only have to give at least three months’ notice, pay fines to the state and up to three years of severance — they also have to convince a judge that the dismissal is justified, something they don’t always manage to do.”
The obvious result is that many employees can’t be separated from their jobs without dynamite and a crowbar. But there are some not-so-obvious results as well. One is that companies have to keep workers who aren’t needed anymore, making it tough for those companies to compete with more streamlined competitors abroad.
The other is that managers regard new hires the way most of us regard telemarketers — as something to be avoided, not welcomed. Hire the wrong people, and you may be stuck with them forever, if not longer. When in doubt, it’s wise to keep payrolls to an absolute minimum.
That’s the opposite of the attitude among employers in the United States, where the prevailing rule is “fire at will.” There’s much less risk in taking on a new employee — if she does a mediocre job, or the need for it disappears, a company can give her the gate. From individual dismissals to mass layoffs, employers generally don’t need to ask permission from anyone.
You’d think that in a place where it’s easy to fire workers, there would be a lot more workers without jobs. But just the opposite is true: Over the last decade, the unemployment rate in France has averaged double the rate here. In Germany, which also has extensive restrictions on dismissals, the unemployment rate (currently a staggering 12 percent) has consistently exceeded ours.
Whatever else we do badly, we are great at creating jobs.
Whatever else those countries do well, they are terrible at it.
Americans worry that too many of the new jobs here are low-paying spots for low-skilled workers, particularly immigrants. The Germans and French should wish for such troubles. Their problem is that there are so few jobs for the unskilled — sentencing many immigrants, as well as natives, to lives of perpetual idleness at public expense.
Critics of unfettered capitalism claim our system has eroded living standards for workers at the bottom of the ladder. There is some truth in that, but France and its neighbors have been doing the same thing — only for everyone. Since 1992, the French economy has grown at an average rate of less than 2 percent per year, and Germany has managed only 1.4 percent annually. For the European Union as a whole, the rate was just 1.9 percent. In the U.S., we’ve averaged nearly 3.3 percent growth.
Those may sound like tiny differences, but as with interest rates on a mortgage, they compound into big money. Thanks to anemic growth, Europe has fallen far behind the U.S. in per capita income — which is now more than 50 percent higher here than in France, Germany, Belgium and the Netherlands. Today, these countries still qualify as rich. In a generation, at the rate things are going, they won’t.
The French protesters think they’re defending their right to employment security. But secure employment in the 21st century doesn’t consist of hanging onto your current job come hell or high water. It consists of being able to find your next one.
Steve Chapman writes for Creators Syndicate. Contact him at: