Today's Difference In Unemployment Rates
What accounts for the today's difference in unemployment rates between France and US?
France has one of the highest unemployment rates out of the industrialized nations. It has been at around 10% for the last two decades. Many French workers will go through unemployment at some point in their career, and it is an especially high probability for the low skilled workers and the young. There are many possible reasons for why France has a much higher unemployment rate than the US and different groups have different interpretations. Some say it's because of differences in levels of economic performance, others that it is because the government has spend so much on getting the economy ready for Europe's single currency, that there is no money for …show more content…
The most important French trade unions are the CGT (General Confederation of Labor), the CFDT(French Democratic Confederation of Labor) and the CGT-FO(General Confederation of Labor). 10% of French workers belong to trade unions and they are covered by collective bargaining agreements which protect their job position. However, 90% of all French workers are covered by these same collective bargaining agreements which means first, that 80% of French workers free ride and enjoy the benefits of the trade unions' effort and second, that the workers have an even high power of negotiation.
Trade unions in France have weight for negotiation within the firms but they can also influence directly government policies; "every effort by the French government to take acquired rights away from privileged workers such as truckers and railway workers has ended in failure" (The economist April 5th 1997). And because employers are aware that unions have power and desire to fight for their own interests (demand for wage raises for example) and they know that these interests are often opposite to theirs, the employers have a strong incentive to not hire or to hire the strict …show more content…
Although the effects of this legislation on the unemployment rate are still hard to define as we will need more time to be able to tell, one thing is sure; the government underestimated the public costs of such a program. The costs of aiding financially the firms to compensate them for their higher labor costs are estimated at 35 billion French francs per year(the economist, june5th
France has one of the highest unemployment rates out of the industrialized nations. It has been at around 10% for the last two decades. Many French workers will go through unemployment at some point in their career, and it is an especially high probability for the low skilled workers and the young. There are many possible reasons for why France has a much higher unemployment rate than the US and different groups have different interpretations. Some say it's because of differences in levels of economic performance, others that it is because the government has spend so much on getting the economy ready for Europe's single currency, that there is no money for …show more content…
The most important French trade unions are the CGT (General Confederation of Labor), the CFDT(French Democratic Confederation of Labor) and the CGT-FO(General Confederation of Labor). 10% of French workers belong to trade unions and they are covered by collective bargaining agreements which protect their job position. However, 90% of all French workers are covered by these same collective bargaining agreements which means first, that 80% of French workers free ride and enjoy the benefits of the trade unions' effort and second, that the workers have an even high power of negotiation.
Trade unions in France have weight for negotiation within the firms but they can also influence directly government policies; "every effort by the French government to take acquired rights away from privileged workers such as truckers and railway workers has ended in failure" (The economist April 5th 1997). And because employers are aware that unions have power and desire to fight for their own interests (demand for wage raises for example) and they know that these interests are often opposite to theirs, the employers have a strong incentive to not hire or to hire the strict …show more content…
Although the effects of this legislation on the unemployment rate are still hard to define as we will need more time to be able to tell, one thing is sure; the government underestimated the public costs of such a program. The costs of aiding financially the firms to compensate them for their higher labor costs are estimated at 35 billion French francs per year(the economist, june5th