Don't work, burn a car

Where to start? I'm sure you heard about the new rioting in France (if you haven't look here or here, or here, here, or ici). If it's not ghetto immigrants burning cars, it's upper class white kids. 'Course there's a big difference here - the CRS (French SWAT basically) doesn't confine these protesters to the banlieues around the city, but allows them into the downtown areas to ply their arsonistic tendencies. I have read the theory that this may be a concerted effort by the Republic to allow the protesters to lose public support by over-doing it. Whatever, if this is the government's grand plan to keep the CPE, it's going to be a tough sell with the polls saying around 68% (last week) of the people were against these new contracts.

Ok, here's the thing. In theory the law is a good one. France needs to liberalize their economy. Let's take me for example: I worked for 1 year as an intern, which doesn't count as real work for the government; basically meaning I don't pay taxes on it and the company doesn't pay tax on me. Then I was kept on as a contract employee for 6 months. I left after 6 months and now the government is going to pay me, for up to 7 months, about 70% of my previous take-home pay. It's nice, sure; I'm not even gaming the system, I'm just following the rules. But I did a little bit of bar napkin math and figure I'll earn about 10 times as much from unemployment as I paid in during my short-term contract. This is one small example of a nation-wide phenomenon. For me, the company was paying about 100% taxes on my pay; meaning that my salary was actually doubled for the employer. I was on a CDD (fixed-length contract), so either myself or the employer could end this whenever the other wished, but figure I sign a CDI (non-fixed-length contract). The company is stuck with me come hell or high water. It's good for the employees, bad for the companies.

Many Anglo news sources have discussed the fact that France needs to change, I am not really going to get into this. Anyone who isn't French and understands anything about today's world knows that things can not continue as is. The thing is that the French could care less what the Americans or the Brits think; on the contrary I am sure that certain protesters who used the Anglo news sources as even more reason to fight this. See, the 'Ricans (this is their [semi-]derogatory name for Americans) think the CPE is a good thing, therefore by definition it must be a bad thing. I was watching the spokesman for the government the other day on the news and it was very funny to watch him describe the type of economy that he (or the government) foresees in the future and he starts to talk about the liberalization of the labor markets, etc, and basically discuss that the changes are needed, like some countries. From the way he was speaking, I totally expected him to say Ireland or Britain (never the US, of course), but he (and I'm sure this was very deliberate on his part) totally avoided Anglo-Saxon countries and said, "Like Spain and the Netherlands who have recently started to liberalize labor markets with very good results."

The problem with the CPE is not the introduction of a new type of contract. I think this is a good idea (much better than the idea that letting everyone work for 35 hours would lead to more jobs) in principle. However, the French mentality is so set on these damn contracts, that the protesters have legitimate axes to grind. There will most definitely be abuses. Right now companies can only hire worker on CDD (short-term) contracts for up to 18 months, I think. In any case, it is a short period of time, and this can only be done in 6-month periods. Therefore, the employees take a temporary-work attitude and it's not really efficient. However, by using one of these CPE contracts, companies can hire workers out of school for up to two years and then fire them after 23 months and hire a new one. IT WILL HAPPEN. Because of this ingrained mentality of contracts they will do everything they can to work around signing CDIs. On top of this, many banks and lending agencies will probably treat this as a temporary contract and not avail young workers to money needed to buy housing, vehicles, whatever. I think the country needs to change, but I'm not sure that one sweep of the pen with a new law such as this can help things.

However the irony is the dinosaur labor unions who are screaming that everything is fine as the French Titanic rolls through the ever darkening skies of the North Atlantic. Nothing is fine and they either don't realize it or don't care. You have to realize that this is an election year. Chirac's term ends soon and the elections will be called early in 2007. The Socialists desperately want to take back the government and they can read the polls just like everyone else. Two-thirds of French people who dislike the CPE are a lot of voters. The unions are going to protest anything that threatens their way of life (maybe they should get together with the UAW in Detroit and discuss things like jobs banks for all of their criticism of the “American labor style”) and the students are sick of being cooped inside all winter and see an opportunity to get out into the early spring sun.

There you go; if you polled me, using the correct words, I too would be against the CPE. I think the country needs radical change and the CPE is the type of thing that needs to be implemented. Maybe it is the first step (the first step is never easy) to changing the mentality of the French (both employers and employees) over the labor markets. Whatever the case, you can not look at it from an American view point and just make a snap judgement that it's the right thing for France. It's much more complicated, as I tried to present here.