Against all odds, in this year’s French presidential election the candidate for the center-right party Les Replublicien is François Fillon, former prime minister under Sarkozy. The admiration of Mr. Fillon for Margaret Thatcher isn’t a secret, and his economic program is clearly inspired by neoliberalism.
One of Mr. Fillon’s main promise is to eliminate the 35-hours legal cap on the working week. This is an interesting measure adopted in France in 2000, but with controversial results, as you can see in the following table. The average French hours worked are quite near the EU average and surely higher than the legal cap. What went wrong?
Table 1 – Average usual hours worked, all in employment and full-time workers, April to June 2011, European Union member states (not seasonally adjusted)
|All in employment||Full-time employment|
“A necessity for job creation”
In 1998 the socialist government passed a law, named after the Labour Minister Martine Aubry, that set the length of the workweek at 35 hours. The measure started to apply for firms with more than 20 employees in 2000 and for smaller firms in 2002. The arguments used to justify the reduction are the creation of more jobs through work sharing and the improving of worker’s welfare by increasing free time. The legislation also let unchanged the workers’ monthly income for individual earning the hourly minimum wage (that means: less work, same income).
The Aubry law succeeded in the goal of reduce working hours, although there exist relevant inequalities between large and small firms (table 2). It is possible to see a clear discontinuity in the percentage of employees working 39 hours or more in 2000 in both small and large firms. In addition, the gradual increase of 35 hours-workers in small firms suggests some anticipation effect.
Table 2 – Percentage of employees working different intervals of usual weekly hours
|small firms||large firms|
|above 39||39||35-39||35||below 35||above 39||39||35-39||35||below 35|
Source: Estevao and Sa, 2008
What about the workers’ quality of life? This is probably the main successes of the reform, as it is possible to see in table 3. 59 percent of workers said their lives had improved, only 13 percent complain a deterioration. Women and men had comparable rates of satisfaction, 61 and 58 percent, respectively, while managers showed particularly high rate of satisfaction, especially female. However, the least likely to be satisfied were unskilled female workers (40 percent of whom saw improvement versus 20 percent who spoke of deterioration). Important inequalities are clearly evident, but even among the least satisfied group, 2 over 3 said their daily lives improved.
Table 3 – Effect on Quality of Daily Life
|Sex||Employee category||Improvement (%)||No change (%)||Deterioration (%)|
Source: Hayden 2006
On the other hand, half of the employees said their working conditions had not changed, with 28 percent who experienced in fact a deterioration. In particular, a source of stress for workers results from the increased demand for multitasking and from doing the same tasks in less time.
Table 4 – Change in working conditions
|% of employees surveyed||Improvement (%)||No Change (%)||Deterioration (%)|
|factors contributing to a sens that working conditions deteriorated|
|increased demands for multitasking||48.4||27.1||37.4||35.5|
|less time for same tasks||41.9||20.7||34.9||44.4|
|more stressed at work||31.7||11.8||24.5||63.7|
|factors contributing to a sens that working conditions improved|
|better able to organize one’s work||25.6||42.4||35.0||22.6|
|more autonomy in one’s work||15.8||39.8||33.2||27.0|
|increased employment in work unit||50.4||33.0||43.4||23.6|
Source: Hayden 2006
The more interesting point is about the effect of the reform on employment. A research lead by Esevao and Sa shows that the Aubry law increased transitions from employment to unemployment for men by 3.9 percent in 1999, by 2.7 percent in 2001 and by 1.4 percent in 2002, while women working in large firms more than 35 hours were not affected. Some of the reasons are men’s demand for higher hourly wages, that is human capital became more expensive for firms (creating incentives to fire the least productive male employees) and the wish to find jobs with fewer working hours. From the point of view of large firms, they tended to hire men from the unemployed pool more often than small firms after the law was announced. With regards to the level of employment, the research suggest that the 35-hour workweek had no effect on employment.
Anyhow, due to the labour reform or not, in 2000 and 2001 jobless rate did fall by 15 percent, only to raise again as soon as economic conditions worsened. Moreover, thanks to the flexibility of the French system it is possible for employees to work more than the legal gap, and this explains the high average number of worked hours.
The return of the Thatcher
“Everybody has to work to produce more and earn more”, said Mr. Fillon. His plan is to reduce unemployment to below 7 percent in five years, from the current level of 10 percent through a reduction of labour costs. This reduction will be achieved by the abolition of the 35 hours’ workweek and will allow negotiation of working hours at company level with a legal maximum of 48h per week, raising the retirement age from 62 to 65, cutting 500,000 civil service jobs and reducing unemployment benefits.
On the tax side, the Republican candidate proposes to rise the rate of VAT by 2%, to reduce the tax on corporations from the current 33% to 25% and to abolish the unpopular wealth tax introduced by François Holland, which allows the state to tax individuals on the value of their property, including jewellery and furniture.
It’s unclear if these measures will be enough to restart the economy of France, called “the Sick man of Europe” by François Fillon himself in 2016.