There's No Job Security Like No Job Security

RealClearPolitics.com ^ | 04/06/2006 | Steve Chapman

[SirLinksalot]

April 06, 2006

There's No Job Security Like No Job Security

By Steve Chapman

French students and unions have been protesting for weeks now over a law making it easier for companies to get rid of employees. Under the measure recently signed by President Jacques Chirac, they may fire workers younger than 26 during their first two years on the job -- for no reason whatsoever.

The demonstrators think that's a bad idea, and they're right. Here's a better one: Let companies fire any workers of any age at any time for no reason at all. Sales are off? The job is redundant? Outsourcing beckons? You part your hair on the wrong side? Don't let the door hit you on the way out.

It may seem as though my proposal would be great for greedy corporations but lousy for ordinary workers. In fact, surprising though it may be, workers would gain immeasurably. That's because the greatest threat to job security in western Europe is job security. The best guarantee of employment, by contrast, is no guarantee.

France is just one of many countries on the continent that give many employees something like lifelong tenure. "In France," explains The Associated Press, "workers who land a coveted permanent contract can plan to stay at their jobs until retirement. To fire most employees, companies not only have to give at least three months' notice, pay fines to the state and up to three years of severance -- they also have to convince a judge that the dismissal is justified, something they don't always manage to do."

The obvious result is that many employees can't be separated from their jobs without dynamite and a crowbar. But there are some not-so-obvious results as well. One is that companies have to keep workers who aren't needed anymore, making it tough for those companies to compete with more streamlined competitors abroad.

The other is that managers regard new hires the way most of us regard telemarketers -- as something to be avoided, not welcomed. Hire the wrong people, and you may be stuck with them forever, if not longer. When in doubt, it's wise to keep payrolls to an absolute minimum.

That's the opposite of the attitude among employers in the United States, where the prevailing rule is "fire at will." There's much less risk in taking on a new employee -- if she does a mediocre job, or the need for it disappears, a company can give her the gate. From individual dismissals to mass layoffs, employers generally don't need to ask permission from anyone.

You'd think that in a place where it's easy to fire workers, there would be a lot more workers without jobs. But just the opposite is true: Over the last decade, the unemployment rate in France has averaged double the rate here. In Germany, which also has extensive restrictions on dismissals, the unemployment rate (currently a staggering 12 percent) has consistently exceeded ours.

Whatever else we do badly, we are great at creating jobs. Whatever else those countries do well, they are terrible at it.

Americans worry that too many of the new jobs here are low-paying spots for low-skilled workers, particularly immigrants. The Germans and French should wish for such troubles. Their problem is that there are so few jobs for the unskilled -- sentencing many immigrants, as well as natives, to lives of perpetual idleness at public expense.

Critics of unfettered capitalism claim our system has eroded living standards for workers at the bottom of the ladder. There is some truth in that, but France and its neighbors have been doing the same thing -- only for everyone. Since 1992, the French economy has grown at an average rate of less than 2 percent per year, and Germany has managed only 1.4 percent annually. For the European Union as a whole, the rate was just 1.9 percent. In the U.S., we've averaged nearly 3.3 percent growth.

Those may sound like tiny differences, but as with interest rates on a mortgage, they compound into big money. Thanks to anemic growth, Europe has fallen far behind the U.S. in per capita income -- which is now more than 50 percent higher here than in France, Germany, Belgium and the Netherlands. Today, these countries still qualify as rich. In a generation, at the rate things are going, they won't.

The French protesters think they're defending their right to employment security. But secure employment in the 21st century doesn't consist of hanging onto your current job come hell or high water. It consists of being able to find your next one.

[JohnnyZ]

What workers really need are labor unions to help them hold onto their jobs.

[joesnuffy]

To fire most employees, companies not only have to give at least three months' notice, pay fines to the state and up to three years of severance -- they also have to convince a judge that the dismissal is justified, something they don't always manage to do."

You'd have to be a black/native american disabled lesbian to get that kind of protection in the USA....WOW

France is really 'progressive'....

If you call entropy or decay progress....that is..

imo

[Maneesh]

Excellent article. Free enterprise creates and labor mobility are essential for a good economy. We have to keep educating Americans on the vital truth explained in this article. The default public school or liberal arts graduate believes corporations are evil and jobs should be secure for life. We can never stop the education of young skull fulls of mush about this truth. A field trip to Europe should be required for graduation, one week in Germany or France will convince anyone that will all the challenges the USA is the greatest country on planet earth with the most resilient economy and unlimited opportunity.

[dervish]

BTTT!

[sr4402]

Could somebody please give us the age where you currently can get a job? Why are folks leaving this important fact out of the articles?

[KEmom]

"What workers really need are labor unions to help them hold onto their jobs."

I think you forgot the sarcasm tag.

[kevkrom]

That's the opposite of the attitude among employers in the United States, where the prevailing rule is "fire at will." There's much less risk in taking on a new employee -- if she does a mediocre job, or the need for it disappears, a company can give her the gate. From individual dismissals to mass layoffs, employers generally don't need to ask permission from anyone.

This is a gross over-simplification. Firing someone "for cause" in the U.S. may be relatively easy, but it is a case to be avoided if at all possible, lest you wind up in a lawsuit for wrongful termination. The best way to get rid of the deadwood is through larger layoffs, where, hey it's nothing personal, it's just that your position went away...

[snugs]

There does seem to be a muddying of the waters between firing and laying off or as we say redundancy.

[ejroth]

Excellent article.
I’ll add this one to my other fun “counterintuitive but true” list
Which includes:
Cutting taxes on the rich increases revenue to the government
Antitrust laws damage business and the economy
Outsourcing is a very good thing
Minimum wage laws increase unemployment
Eminent Domain Laws are never needed for any reason
Tariffs are a tax on the consumer
Spending more money on education does not raise quality
The New Deal prolonged the Great Depression
Government interference is always bad no matter the good intentions
Socialism is slavery

Any other suggestions for my list?

[CIB-173RDABN]

FreeRepublic is not free - Donate today

[Navy Patriot]

Good find, France has manufactured this upheval, and it results in a divsion between young and old.

There are jobs to be had for younger workers, just move the older non-producers out and....

Or raise taxes and use the money to put 'em to work for the government, or draft 'em into the army and use 'em to defend France and her economy, wait, didn't they already do that?

[supercat]

Any other suggestions for my list?

Price floors make any good or service whose value is below the minimum, worthless.