The Corner

France, Forward

As Andrew Stuttaford noted earlier this week, the new French Socialist government has already gotten into the swing of things. First, they decided to respond to their government’s fiscal woes by lowering the retirement age for some workers. Now, they’ve decided to tackle unemployment, by essentially making it impossible for companies to fire workers. Because, you know, that won’t increase unemployment by making companies less likely to hire. The FT explains:

France’s new Socialist government is to raise the cost of making workers redundant in an attempt to stem rising unemployment, which hit 10 per cent of the workforce in the first quarter of 2012, according to figures released on Thursday.

Michel Sapin, labour minister, said part of an “urgent” response to joblessness was to penalise companies that seek to increase dividends and maximise profits by shifting production to lower-cost locations – dubbed “stock market redundancies”.

“The main idea is to make redundancies so costly that it’s not worth it,” he told France Info radio.

Mr Sapin, who said he planned to introduce legislation after the summer, said the level of compensation for fired workers and the cost of converting an abandoned plant to new use should be made sufficient to deter businesses from resorting to redundancies.

Such a move would be in defiance of calls from business for an easing of the country’s already weighty employment protection legislation, which was singled out last week by the European Commission as one of the structural factors inhibiting the French labour market.

Patrick Brennan — Patrick Brennan is a writer and policy analyst based in Washington, D.C. He was Director of Digital Content for Marco Rubio's presidential campaign, writing op-eds, policy content, and leading the ...

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