Hollande's Insane Proposal: "Make Layoffs So Expensive For Companies That It's Not Worth It"

MISH'S Global Economic Trend Analysis ^ | 10/03/2012 | MIKE SHEDLOCK

[SeekAndFind]

Unemployment in France touched 10.2% in April, a number last seen in 1999 according to data from Eurostat.

click on chart for sharper image

The question on newly-elected President Francois Hollande's mind is what to do about it.

Economic Insanity
 
Hollande's layoff clampdown solution according to Labour Minister Michel Sapin is to "make layoffs so expensive for companies that it's not worth it."

France's new Socialist government is planning to ramp up the cost of laying off workers for companies in the coming months, its labour minister said on Thursday after data showed the jobless rate hit the highest level this century at 10 percent.

"The main idea is to make layoffs so expensive for companies that it's not worth it," Sapin said in an interview with France Info radio.

"It's not a question of sanctions, but workers have to have compensation at the right level," he said.

Industry Minister Arnaud Montebourg is also planning legislation that would force companies to sell plants they want to get rid of at market prices to avoid closures and job losses.

Four Things, All of Them Bad

1. Mass layoffs will occur before the law passes.
2. Companies will move any jobs they can overseas.   
3. Ongoing, if it's difficult to fire people, companies will not hire them in the first place. 
4. Corporate profits will collapse along with the stock market should the need to fire people arise.

The proposal to force companies to sell plants rather than fire workers as outlined by Industry Minister Arnaud Montebourg and Labour Minister Michel Sapin is nothing short of economic insanity.

Nannycrat Dilemma

Think the Nannycrats in Brussels will go for this idea? If they do, they will wreck all of Europe. If they don't, then how are they going to "harmonize" everything?

For more on nannycrats and the nannyzone please see ...

• Huge Nannycrat Conflict Coming Right Up; Hollande Lowers Pension Age to 60  
• Another Meaningless Nannycrat Rumor: Europe Mulls "Secret Plan for New Europe"  
• "Multi-Stage" Nannycrat Proposals; Devaluation - The Last Option? Note to Wolfgang Münchau, Martin Wolf, Jeremy Siegel at the Financial Times: Focus on the Obtanium not the Unobtanium

Also see my original post on the "nannyzone" written June 2, 2011, nearly one year ago today: Trichet Calls for Creation of European "Nanny-State" and Fiscal "Nanny-Zone"

Addendum:

Reader "Bob" writes ....

Point 3 is the biggest but it gets even more insidious. The companies that have enough employees now are generally larger companies with a political voice. The companies that will need employees later are generally smaller, entrepreneurial companies with no political voice.

Since most job creation happens at the entrepreneurial level, the proposed policy will subsidize corporate stagnation while stemming the flow of entrepreneurial companies entering the market.

Over the long haul, this will kill France's economic competitiveness while increasing unemployment.

Recall government enforced jobs in the former USSR in the 1980's. How well did that go? Things got got so bad the USSR had to dissolve.

[Vermont Lt]

Did they translate atlas Shrugged into French.

That long ,long speech must be REALLY boring en Francis.

[PGR88]

Hollande's Insane Proposal: "Make Layoffs So Expensive For Companies That It's Not Worth It"

Where do they get these ideas from? Socialists truly are mentally ill.

What they will get is - make hiring so expensive, no one will hire.

[ken5050]

The only thing surprising about France is that it took such a short time for the socialists to screw it up..

[GeronL]

These companies should just shut down in protest. They will never be allowed to make a profit there under this regime.

[jda]

Oh NO, I can hear 0bama’s brain cell churning now!!!

[Aria]

Gee....maybe real estate will become a good deal there.

[dfwgator]

Industry Minister Arnaud Montebourg is also planning legislation that would force companies to sell plants they want to get rid of at market prices to avoid closures and job losses.

So let's see, do I build my plant in France, or do I build it somewhere else? Gee that's a toughie. /s

[fwdude]

The Frenchies are about to get the government they deserve.

[Anitius Severinus Boethius]

So if I own a company in France that makes widgets, and I am losing $2000 a day, would I be better off just stopping production, shutting down my business and moving myself and my money to another location, or losing $730,000 a year because the government won’t let me do what is needed to stop the bleeding?

What a difficult choice.

[SeekAndFind]

OK, let’s think abut this -— Your company is bleeding cash and you need to control cost. You discovered that one product line isn’t making money because there really is no market for it. Problem — You have 50 people working on that product line...

What to do if a law outlawing layoffs passes??

[SeekAndFind]

I think the solution to the problem is the Soviet solution. As one worker in the former USSR used to say :

“We pretend to work and they pretend to pay us”

[SeekAndFind]

I think one solution to the problem is the Soviet solution. As one worker in the former USSR used to say :

“We pretend to work and they pretend to pay us”

[massgopguy]

This is what the new Soviet Union did. You weren’t allowed to go out of business. They’d shoot Kulaks for going broke.

[GeronL]

exactly.

I guess you shut down the company and start another one in Germany or Denmark

[Hotlanta Mike]

This is the French Revolution without the guillotines..expect a mass exodus of French businesses and capitalists.

[KarlInOhio]

Did they translate atlas Shrugged into French.

Oui! La Grève, ISBN 9782251444178

[The Louiswu]

“In the name of the general welfare,” read Wesley Mouch, “to protect the people’s security, to achieve full equality and total stability, it is decreed for the duration of the national emergency that— “Point One. All workers, wage earners and employees of any kind whatsoever shall henceforth be attached to their jobs and shall not leave nor be dismissed nor change employment, under penalty of a term in jail. The penalty shall be determined by the Unification Board, such Board to be appointed by the Bureau of Economic Planning and National Resources. All persons reaching the age of twenty-one shall report to the Unification Board, which shall assign them to where, in its opinion, their services

Rand, Ayn (2005-04-21). Atlas Shrugged: (Centennial Edition) (p. 497). Plume. Kindle Edition.

[AZLiberty]

I see new opportunities opening up — for French hit men. If you can’t lay them off, have someone knock them off.

[Abundy]

My thought exactly...”Who is John Galt?”