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France’s cabinet to push ahead with labour reforms


France’s cabinet to push ahead with labour reforms

French union members light flares in Marseille

Today, French President Emmanuel Macron’s cabinet will initiate his labour reforms, which were unveiled on August 31. Despite some resistance from labour unions, Macron is expected to push ahead with his policies.

Many economists blame France’s near 10% unemployment rate, two percentage points higher than the EU average, on the county’s strong worker protection measures and costly employee benefits.

The reforms– some of which cap unfair dismissal compensation and give companies more power to individually negotiate labour agreements– are intended to expedite the process through which firms hire and fire employees.  The modifications specifically target companies with fewer than 50 employees, as they constitute a majority of French businesses.

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The reforms’ immediate effects on unemployment remain unclear. By increasing market fluidity, it is possible that, in the short-term, the measures could cause a spike in layoffs. In the long-term, any substantial decreases in unemployment that could be attributed to the reforms will not be seen for a number of years.

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