Contrat Première Embauche Folie

Does anyone else find the recent French employment law protests completely stupefying? Millions of French have been protesting the CPE (contrat première embauche = first employment contract). Millions. All over the country. And what's so heinous about it is that the law would allow employers to fire young employees more easily?

This sounds basically like what we have in the U.S., and I don't see that job security here is incredibly fragile. But in a country where intervention is a national pastime, this has people worried. Perhaps they'd rather keep their high unemployment rate?

I'm trying to see the bright side, but it's hard.

UPDATE: Others have seen a bright side, see here for more.

Share this

On France, and the Right to

On France, and the Right to Work
with an unemployment rate as high as it is (50% for some demographics), it doesn't seem that France's current system has done a very good job protecting that "right." I can't imagine a situation where it could possibly be more difficult to find em...

I'm with you. Employers

I'm with you.

Employers don't fire good employees, as a rule. They fire employees who can't hack it. And if they believe that they can't fire those people, they're less inclined to take a risk hiring anyone (read: young people) without a signifcant track record.

The same legislation that gives their street-sweepers a 20 & done contract, and 35 hour workweek which is all but guaranteed for life, is what pushes that unemployment rate skywards.

There's been a huge amount

There's been a huge amount of discussion on this topic among left-libertarians, including Sheldon Richman (perhaps a man new to LL, and increasingly sympathetic, just like me).
The problem with the NEW LAW proposed in France is that it is not a repeal of state interference in employment contracts, but a granting of privelege to employers. Here is a BBC run down on the issue: http://news.bbc.co.uk/2/hi/europe/4816306.stm

What privilege is that? I

What privilege is that?

I think it would be great if the French government would repeal all the legal privileges it's granted to unions. But since that's unlikely to happen, a law that helps to mitigate the effects of those protections is better than nothing.

I saw no privilege in the

I saw no privilege in the referenced article. What I did find interesting -- and what I've noticed from the media in general -- is how the pro/con arguments are presented:

Pro:

The government argues the measure will boost opportunities for young workers, many of whom can only find short-term contract work at best.

Some employers say they are reluctant to take on new staff because of the difficulties of firing them if they prove unsuitable or are no longer needed.

They provide a reason: current laws increase risk of hiring the inexperienced (i.e. young people).

Con:

However, critics warn the new legislation could make it even harder for young people to find a permanent job, and it could be misused by larger employers.

Then they go on to cite a poll. Where's the reason "critics" think it would make it harder for young people to find jobs? I think I know why they don't mention it.

From the BBC article: "The

From the BBC article:

"The CPE is a new work contract for under-26s with a two-year trial period. In that period, employers can terminate the contract without having to offer an explanation."

So employers have the RIGHT to terminate the contract without having to offer an explanation. And could that "explanation" potentially be "I changed my damned mind, what of it?". This effectively disables any bargaining power on behalf of the workers.

Brandon wants to right one wrong with another. Should the Church of Latter Day Saints recieve state funding because Planned Parenthood does, just to "mitigate the effects"?

Dain: I don't think you

Dain:
I don't think you understand how contracts work. All a contract is is an agreement by two or more parties to abide by a mutually agreeable set of terms. For open-ended contracts, such as employment or long-term rental agreements, it's customary to agree upon certain conditions under which one party or the other may unilaterally terminate the contract. It would be absurd not to do this---imagine a rental agreement under which a tenant was required to pay rent until the landlord decided to let him stop.

There's nothing unreasonable or illiberal about a contract that allows either party to terminate it at any time for any reason. I doubt that you have any objections to contracts that allow employees to quit their jobs at will---why do you object to contracts that give employers the right to fire at will?

The bottom line is this: Currently, the French government forbids employers from from proposing contracts that allow them to fire at will. Under the new law, they would be permitted to propose such contracts under certain circumstances. As far as I know, workers wouldn't be required to accept them---they'd still be free to hold out for something better.

The law doesn't give employers any special privileges. It just gives them---under very limited circumstances and to a very limited degree---the same basic rights that employees already have.

This is actually pretty

This is actually pretty tough to think thru. I've flip-flopped a few times over the past few days. Its sort of like lookin at the picture with the Vases and Faces. If I focus long enough, either one makes sense, but their isn't room for both at the same time.

(a) they are making it legal for people to do what they want with their own stuff. don't let perfect be the enemy of good. duh.

(b) there is effectively a state-enforced labor cartel in France that says on behalf of all of its members: we will not work on an at-will basis. I can seriously entertain the notion that allowing only certain people to leave the cartel constitutes granting them a "privilege". So I do have some sympathy for people who are just above the cutoff for being allowed to enter at-will employment agreements. They get screwed doubly: first off some other arbitrary subset of the population is given the ability to enter a contract which is prohibited to them, and secondly whatever benefits you do get from being in a cartel are reduced because the defection rate increases.

Now I trust (a) much more than (b). It's just simpler. And less likely to have socialist "refinements" snuck in while I'm not paying attention (if I haven't invadvertently already made some).

Brandon, I agree that a

Brandon, I agree that a contract is a "mutually agreeable set of terms". But of course the word "contract" in the French case has been substituted for "law". This "contract" will be forced upon all employers, affecting any employeee under 26, giving the employer the right to fire for any reason, without cause, i.e. simply because they want to. An employee considering contracting with an employer is completely neutered. No matter what they supposedly agree on, the employer can, within 2 years, make it void. (Though many employers may find it liberating, it is still being forced upon those who would rather not take part.)

Yes, I suppose it's true that an employee may be fine with an at-will situation, but in the case they want to take their job more seriously, their bargaining power has been diminished. At the outset, if both parties agree it's simply a case of at-will employment, there is no problem, but if not.

And again, the NEW LAW is a top down prescription for unemployment, and not a repeal of state interference. More of the same state capitalist, corporatist tinkering. I'm not going to say that the new law won't marginally increase employment and productivity, because it may, but it hardly makes it just. Fascism (in the strictly economic sense) is simply a more efficient form of exploitation.

Roderick Long has a very

Roderick Long has a very good left libertarian argument on his blog:

Just as deregulating the S&Ls doesn’t count as a move toward liberty if it isn’t accompanied by an end to tax-funded deposit insurance, so in general a removal of restrictions on an entity doesn’t count as a move toward liberty if the entity is still a substantial recipient of government privilege or subsidy. For the more that an entity benefits from government intervention, the closer it comes to being an arm of the State – in which case lifting restrictions on it is, to that extent, lifting restrictions on the State.

I'd also check out Kevin Carson's writing on the subject:

As Marshall said in Gibbon v. Ogden, the state's decision of what not to regulate or tax is just as important as its decision of what to regulate or tax. The two go together in a single strategic framework. The state capitalists adopt whatever combination of statism and markets best promotes their (statist) objectives.

In other words, priorities have everything to do with it.

Reformism is all well and good, but if a particular reform enhances state privilege then it cannot simultaneously function as an increase in liberty.

I don’t think you

I don’t think you understand how contracts work.

Contracts work different ways depending upon their terms. How contracts usually work is really irrelevant. If you want to debate whether or not contracts in general contain certain provisions you're getting into a different issue. What is relevant are the particular contracts in France, their conditions, and the balance of state intervention - through corporate proxies or direct police/regulatory action.

Unwillingness to factor in context in a kneejerk attempt to make current events fit a philosophical mold has killed the libertarian movement for too long. We need to remain open to realities, thoughtful in our analysis, and less dismissive of popular movements by default. We should boldly take positions that turn heads and incite discussion, including the CPE controversy.

Dain: What makes you think

Dain:
What makes you think that courts will refuse to enforce contracts which provide greater job security? Granted, I haven't read a translation of the law, so this could be the case, but it seems very implausible to me.

Jeremy:
Long correctly points out that an ostensible liberalization may, in some cases, actually reduce freedom. There's nothing particularly revolutionary or controversial about that. But I don't see that he makes any effort to show why this particular liberalization is a problem.

I can see only one plausible argument against this change, namely the one that Chance advances: This will give workers under the age of 26 an unfair advantage over older workers.

Well then Chance brings yet

Well then Chance brings yet another angle to this...

The wording in the law - and I for one have not see anything official either - seems to state that courts will necessarily side with the employers. After all, the new law gives them the RIGHT to fire, which would seem to override any previous contract (which of course probably won't even be made in the first place with knowledge of a law like this on the books).

Also, the law has a 2 year limit, after which point the employer is at a disadvantage, diminishing his or her ability to offer an at-will situation . 'Pretense of knowledge' anyone?

Brandon- Absolutely right

Brandon-

Absolutely right that Long makes no argument that this liberalization actually *is* of the type that is a net loser for liberty.

Dain-

How is it that lowering the cost of hiring people should cause greater unemployment? That is the essence of your objection, after all.

Jeremy, Thus far the only

Jeremy,

Thus far the only knee-jerk reaction to the CPE thing has been amongst "left libertarians" trying desperately to counterfactually fit current events into an ideological mold. It boggles my mind that someone can find anything in the liberal text that even *suggests* let alone implies that we should support whiny rent-seekers simply because, what, the French govt is full of socialist wankers? That line of argument is completely incoherent. The students are *rioting for government intervention*, they are *rioting for the maintenance of a coerced privilege*. The illiberalism is rank and straightforward.

Why, again, should we *support* these cretins?

Dain- Your conclusion is a

Dain-

Your conclusion is a non-sequitur:

Brandon, I agree that a contract is a “mutually agreeable set of terms". But of course the word “contract” in the French case has been substituted for “law". This “contract” will be forced upon all employers, affecting any employeee under 26, giving the employer the right to fire for any reason, without cause, i.e. simply because they want to. An employee considering contracting with an employer is completely neutered. No matter what they supposedly agree on, the employer can, within 2 years, make it void. (Though many employers may find it liberating, it is still being forced upon those who would rather not take part.)

Who is getting forced with what? If an employer is happy with the people he has already and doesnt want to fire anyone at all once he hires them, then the law is moot. If the employer has some bad apples he can't get rid of but now he can, the employer's not being forced, he's being liberated. If the employer would like to take a chance on folks but because of the old law isn't in a position to risk it (can't take the wage hit if the guy turns out to be a complete dud and produces no positive net value), the law is a boon for the employer AND the particular member of the reserve army of the unemployed.

And I think the fact that under-26 unemployment is in many cases 33% to 50% neuters their bargaining power more than *gasp* the ability to fire at will for 2 years. Au contraire, the fact that labor contracts are specified from Paris to *forbid* firing completely neuters the worker's ability to bargain.

33% unemployment for the under-26 set means the labor laws are fvcked beyond recognition and *desperately* need to be liberalized.

It is not a coincidence that in employment-at-will countries just to the north of France (Ireland, Britain) the unemployment rates for youth are single digits.

No one has yet disputed the

No one has yet disputed the fact the new law gives employers a RIGHT to fire, butchering the ability to contract on equal terms; this is the brunt of my argument. Whether employers are LIKELY to take advantage of this or not is a moot point. And I've already conceded that this "liberalization" may result in lower unemployment and increased productivity, but so does allowing slaves to fraternize with their loved ones at a relatively unsupervised picnic from time to time. I'm not moved by utilitarian arguments claiming that employment is lower in other countries with a regime similar to that proposed by the CPE.

Again, any new law emanating from the state that dares call itself a "contract" is a joke.

And yes, employers are being forced with the stigma that comes attached to the privelege granted by the state, in addition to the 2 year limit feature, which would then put the employer at a disadvantage.

Brian, I agree that these kids are for the most part likely future beauracrats and state socialist morons, but it's rather collectivist to support this new legislation (can't repeat that enough) because they are by and large saturated with a statist mindset.

Dain: You have absolutely no

Dain: You have absolutely no clue what you're talking about. French law currently prohibits employers and employees from entering an at-will employment agreement. In the United States, employers can create at-will employment, but they're also free to create employment contracts that are binding for a period (though it's much less common). Even after this French law goes into effect, an employee is free to demand a contract that forces the employer to pay a large severance package if the employee is terminated. But unless employers are forced by law to offer such a package, they usually won't. That's especially true for young workers with minimal skills, no experience, and no record of employment.

After the law goes into effect, employers and employees will be more free to contract on equal terms. Right now, employees are free to terminate their employment agreement at will, but employers lack that right.

What FXKLM said. You're just

What FXKLM said. You're just speculating. How can you object to the "wording" of the law when you admit that you haven't read it?

I did some more research, and it turns out that my initial assumptions were correct---the law allows, but does not require, French employers to offer the CPE to workers under the age of 26. The CPE also requires employers to give severance pay equal to 8% of the total wages paid during the term of employment.

No one has yet disputed the

No one has yet disputed the fact the new law gives employers a RIGHT to fire, butchering the ability to contract on equal terms; this is the brunt of my argument.

And this is why no one is buying your argument. The state is not giving the purchasers of labor a right, they're lessening a privilege previously granted to suppliers of labor. Now, if your argument is that current suppliers of labor should not have their contract changed by a third-party, but future contracts should be free from such nonsense, you should say so.

Note that it's not true that

Note that it's not true that current suppliers of labor will have their contracts changed. Workers hired under the old contracts will continue to work under them.

Brandon, thanks for the

Brandon, thanks for the link. All it did was tell me what I've already been saying:

"The new law, however, takes a very different approach to the high rate of youth unemployment. It is based on an initiative introduced by the French Prime Minister Dominique de Villepin. It provides that those under 26 who work for companies with more than 20 employees can be dismissed from their employment in the first two years without any reason given for their termination."

The fact that the law allows it, rather than mandating it, is still unjust. As I said, if one is allowed, by law, to murder carte blanche, it doesn't make it ok just because nobody takes advantage of it. You also point out that employers are REQUIRED to give severance pay equal to 8%. Do you support a law imposing obligations of this kind? This is just another intervention, not a repeal of one. So right now employees have the RIGHT to terminate their employment agreement at will, apparently, giving them unjust leverage. The solution is not to give the same unjust leverage to employers, but to repeal that of the employees. I like how you phrase it as "offering the CPE". That's quite an offer!

Sure Cornelius, the law lessens the priveleges of labor, but only by granting new ones to employers. Is this libertarian? A non-unionized individual is at a disadvantage given that they can be "dismissed from their employment in the first two years without any reason given for their termination". "Without any reason" defends employers who have promised in writing a myriad of personalized job contracts, and then wants to opt out willy nilly. Even a "I changed my mind" isn't necessary. That is what the wording of the law suggests is it not?
I suppose it puts them on more equal terms, but in the same way the U.S. arming one country, but also another, puts them on more equal terms, and is hardly justified.

FXKLM, if you are indeed a libertarian, it's bizarre that you would support this kind of central planning, dictating rules regarding number of employees, severance pay details, etc. Just another phony "free market" reform.

Before I go too far down the

Before I go too far down the rabbit hole, I will grant that I may very well be full of shit. Maybe I indeed have it all wrong, but the wording of the law seems fairly straightforward to me.

I think the mandatory

I think the mandatory severance is wrong, but the law is at least a step in the right direction. Currently, employers can't get rid of employees at all. With the new law, they'll simply be required to pay a large fee to do it.

You're still not getting this. Employers can write contracts that allow them to fire employees at any time. They can also write contracts that impose a substantial penalty for firing employees. In countries where employers are free to do the former, they almost always do so.

Let me state this as clearly as possible: Firing an at will employee is not a violation of the employment agreement. It is specifically permitted by the employment agreement. That's not unjust leverage. Not at all.

“Without any reason” defends employers who have promised in writing a myriad of personalized job contracts, and then wants to opt out willy nilly.

This is completely wrong. In an at-will employment situation, the employer doesn't promise anything. I really don't think I can state this any more clearly.

Dain, These youths are not

Dain,

These youths are not at a disadvantage because the employer can fire them for any reason. They're disadvantaged because they lack experience. Current French law privides a disincentive to hire inexperienced people, especially the young. You have not given any logical reason supporting your implication that unemployment would increase after passage of the law.

Also, restoring the right of free association (albeit only partially) is not a grant of privilege, no matter how badly you need it to support your position.

I meant to include this in

I meant to include this in the above post regarding the claim of increased unemployment: to be fired, you have to be hired first.

Dain, You toss the word

Dain,
You toss the word "right" around like it has magical meaning that lends signifigance to your argument, but you simply misuse the term. French businesses have not been granted a right, restriction on their ability to enter into mutually beneficial arrangments have been lifted in very specific, narrow circumstances.

If one truly admires liberty, then allowing business owners to run their business as they see fit is a victory. Unfortunately, this is a very narrow victory.

If one simply wants more opportunity for young workers, this is still a victory. The view that this can, somehow, be abused by business for their benefit at the detriment of young workers is absurd fiction. The costs for hiring new workers is relatively high compared to retaining sub-optimal workers. The cost/benefit barrier means that most workers will be retained even if they are sub-par because it is expensive to replace them with no garauntee that the replacement will actually provide increased productivity. The US is almost entirely at-will employment but termination without cause is quite rare, and even though most contracts don't mandate severence packages they are very common unless the termination is for cause.

Additionally, the simple knowledge that you CAN be fired will incent workers to be more productive than those that know they cannot be fired which simply means that fewer workers will need to be replaced.