Economics on the small scale

Tuesday, April 11, 2006

Dean Baker weighs in on the CPE


Dean Baker weighs in on the CPE:
The reporting on the battle over a new law in France, that would make it easier to fire young workers, has been especially weak. The coverage has included numerous assertions that making it easier to fire workers will reduce the unemployment rate. (The story goes that firms will more readily hire new workers, if they know that they can fire them later, if they find it necessary.)
In fact, the evidence on this point is extremely weak.
As I was discussing this recently, this isn't about firing workers who aren't performing as they should. This law would allow --even encourage-- employers to fire young workers without cause every two years lest they lose their 'temp' status. Essentially, anyone under 26 years of age would be 'guest workers' in their own country, without the labor force protections that they are otherwise entitled to.

This is labor reform in the same vein as Mr. Bush's Social Security reform.

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