A law was put on record April 2 in France to curb youth unemployment through added job flexibility. The law, which has brought public discord and throngs of protesters to the streets of Paris, will allow employers to fire any employee younger than 26 within a two-year grace period without giving a reason why.
Since the law first appeared on record at the end of March, students and labor unions have been calling for the law, known as the CPE, to be scrapped altogether, causing schools to be closed down because of the violent nature of the protests. President Jacques Chirac has said he will urge Prime Minister Dominique de Villepin to lessen the trial period to one year and change the law to require employers to give reason for layoffs.
Why does it matter?
With growing unrest in France and with increasing labor problems at US-based companies like General Motors, the plight of laborers and unions seems to be a far louder cry than that of companies or governments that are trying to enact reform.
"France illustrates the problem you can have when there is an expectation of entitlement," says Nick Kalm a partner at Reputation Partners. "With any public labor difficulty, the side of management never tells their story as well as it could; labor unions are really excellent about getting their message out in a meaningful way, whereas companies often feel restricted when telling their side of the story."
1 Villepin, who has championed the law, said in Le Journal du Dimanche that he has made mistakes when handling the youth labor law and that his biggest error would have been to do nothing about the spiking rate of unemployment.
2 According to the Center for Economic and Policy Research, France's unemployment rate of 9.2% may not be affected by the new youth labor law. The center says there is no direct correlation between the ability to fire someone and the rate of unemployment in a country.
3 Police made more than 400 arrests in Paris on March 28, after a peaceful protest got out of hand when protesters began throwing stones and bottles. Police responded with water cannons and tear gas. About 50 people were hurt.
4 Villepin, who is running to succeed Chirac next year, has received the most backlash from the initiation of the law. His approval rating is at 29%. His closest opponent for the
presidential election, Nicolas Sarkozy, the interior minister, has criticized Villepin's stealthy push of the law through parliament.
5 The unemployment rate is 22.8% for workers ages 18 to 26 - more than double the 9.2% overall unemployment rate in France. The unemployment rate for youth in some suburbs, which are largely immigrant-dominated, is as high as 50%, according to the Interior Ministry.