Trade-unionFrench President François Hollande is battling to push through controversial labour market reforms. Clashes have erupted between protesters and police, as thousands have taken to the streets in anger at the new laws. Hollande, who faces re-election next year, is the least popular president in modern French history. He hopes that the reforms (including making it easier to hire and fire workers) will help drive down unemployment levels that have been stubbornly hovering above 10% in time for the election in May 2017.

Economists often prescribe “structural reforms” as a way to boost economic growth and drive down unemployment. For example, new laws might make the labour market more flexible by making it easier to hire employees on short-term contracts, or reduce job security so that struggling firms can lay off workers. For individual workers, these reforms can mean lower quality work (worse hours, less benefits, more uncertainty about long-term employment). On the other hand, proponents argue that it also means companies are more willing to hire, which creates more jobs.

Overly-rigid labour markets can be great for “insiders” (i.e. workers with good contracts and lots of rights and protection), but if the economy struggles as a result then it can be difficult to gain that insider status.

We had a comment sent in from Oliver, who argues that some reforms are urgently needed, and that trade unions working to block labour market reforms are not acting in the long-term interests of European workers.

To get a reaction, we spoke to Martin Kahanec, Associate Professor at the Central European University and co-founder and Scientific Director of the Central European Labour Studies Institute (CELSI). How would he respond to Oliver?

kahanecThe thing is that any reform creates winners and losers. And the fear might be that some of the constituencies of trade unions – some groups of workers – might be among the losers. So, being risk-adverse, the unions might oppose reforms. But good reforms provide greater welfare to society at large.

What is needed are reforms that are properly evaluated, and policy-making based on evidence where the impacts are well-measured. Then it would be easier to communicate the costs and benefits to unions, and there is a better chance that any measures would be adopted and supported by the trade unions.

For another perspective, we also spoke to Florian Moritz, Head of European and International Economic Policy Division, Confederation of German Trade Unions (DGB). How would he respond to Oliver?

moritzWell, ‘reform’ is a word with many different meanings. There is no question that reforms can be a good thing if they are the right reforms. But what are usually called ‘labour market reforms’ in Europe are certainly not in the best interest of workers. For example, the labour market reforms we’ve witnessed during the crisis, demanded by the European Commission or the Troika in different crisis countries, are very much against the interest of workers.

For example, we’ve seen several reforms in different countries where the systems of collective bargaining has been practically destroyed, and this leads to lower wages, lower benefits for workers, and lower quality of jobs. These are definitely not the right reforms, and even in the long-term they don’t do any good.

The official argument in favour of such reforms is, in fact, precisely that they should lower wages and then there will be more jobs because we have lower wages. But this is, of course, not true and is simply a false economic theory that is doing a lot of harm to Europe..

Should trade unions support labour market reforms? Or are ‘reforms’ an excuse to push down wages in Europe, and diminish job security? Let us know your thoughts and comments in the form below, and we’ll take them to policymakers and experts for their reactions!

IMAGE CREDITS: CC / Flickr – DncnH

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44 comments Post a commentcomment

What do YOU think?

  1. avatar
    Sebastien Chopin

    Trade unions don’t work for worker interests anymore, they work for themselves… they are also more and more independent from workers and don’t need their money… are not on company boards anymore and generally are attracting less and less people…

  2. avatar
    Ivan Burrows

    .

    What a bizarre question, labour market reforms are not in the interest of trade unions seeing mass unemployment, loss of membership & therefore loss of revenue due to Brussels incompetence so they will never support ‘reform’.

  3. avatar
    Bruno Verlinden

    Sure, but on the condition that it is based on an equitable program supported by government, trade unions, employers and financial authorities. To get out of the problems, the countries need also to default on their debt and restructure taxes. It is not only labour that has to solve the problem. Capital needs to have a good haircut too..

    • avatar
      rosy

      well said Bruno.

  4. avatar
    G.DANIILIDIS

    …YES ‘reforms’ are an excuse to push down wages in E.U., and diminish job security…and abolish achivements of 150 years in working society in order to boost super profits of economic sharks.France is experimental case to try implementation.

  5. avatar
    Γεώργιος Δανιηλίδης

    YES ‘reforms’ are an excuse to push down wages in E.U., and diminish job security…and abolish achievements of 150 years in working society in order to boost super profits of economic sharks.France is experimental case to try implementation.

  6. avatar
    Jose Luis Mata Rodriguez

    The labour market reforms such as those proposed both in Spain or France mean misery for workers. Therefore, they should not be supported by Trade Unions!!!

  7. avatar
    Vivi Primikyri

    Να αλλαζουν κανονες για τα εργασιακα ,τις αμοιβες τα ασφαιστικα δικαιωματα ,αντι να αναδιανειμουν το πλουτο δικια στν Πλανητη μας πως σας φαινετυαι αυτο?

  8. avatar
    Vivi Primikyri

    Ποια δικαιη κοινωνια μας υποσχεθηκαν,με το ονειρα των ανθρωπων παιζουν,αθεμιτο και παιζουν και με την ζωη μας

  9. avatar
    catherine benning

    It appears to me that the Europe is on the brink of civil war in many of our very civilised countries. How very sad that what they united against they then created, and for what?

    The leaders support those who are not their electorate or their loyal paying citizens. Whenever a ruling class makes that mistake, they end up with the chop.

    And that chop even takes the head off the Monarch. So, none are above the wishes of the people.

    https://www.youtube.com/watch?v=ro9T5w3vEKM

    And the French.

    https://www.youtube.com/watch?v=DLm0O0BZzfo

    Here we see Paris today.

    https://www.youtube.com/watch?v=lYhH04uRv6o

    And Germany.

    https://www.youtube.com/watch?v=aeXOmt1FgcY

    And Greece

    https://www.youtube.com/watch?v=vqlJqTij1E0

    Austria

    https://www.youtube.com/watch?v=cKueIefOHUg

    Sweden

    https://www.youtube.com/watch?v=HvmLl331Y0Q

    UK

    https://www.youtube.com/watch?v=z5ZoWu-N5TA

    And this is only the beginning. It is a terrifying prospect when you know those who lead are creating this scenario themselves. Yet refuse to acknowledge it.

    https://www.youtube.com/watch?v=cKueIefOHUg

  10. avatar
    eusebio manuel vestias pecurto

    In many countries of Europe labor law is not advanced European realityis clear that labor market open free is better than closed but with basic human rights rights helps to reduce inequities and social differences within the rule of law

  11. avatar
    Yanni Sfyrides

    That depends on what is going on in European/global Economy.If we have a strong long term recession they should.There is also another variable.If there is a recession, then this would mean that the general cost of life -due to consuming decline- is declining, so a push down of wages would be easier and more fair.In recession times, a company with a high labour cost, might be in the position to cease operations- which would be more painful than a wage cut.

  12. avatar
    Bob Newman

    They are out of date and useless. My experience is they couldn’t care less about British workers. More interested in helping big business use agencies for foreign workers taking over British jobs because they will do it cheaper. They are useless.

  13. avatar
    Rosy Forlenza

    there was a good comment by Bruno in the article’s own comment section. Argument goes, that labour reform is only one aspect of growth. I agree and in my view, The Eurozone, needs to end austerity. Their also needs to be some debt forgiveness particularly in Greece. I don’t necessarily think that there needs to be common tax rules that are uniform in disparate economies BUT, tax rules that promote growth. So Italy – widen your tax bands. (2) Max wait for a tax rebate should be 2 months. (3) no paying NI until you do your tax return. (4) Stop penalizing small businesses and double taxation on people who want to employ others (5) every country should be required to have a comprehensible citizens advice bureau. Those changes would bring more investment into the Italian economy tomorrow (for example). The Labour reforms as we see them in terms of ‘flexibility’ is simply creating the ‘precarious worker’, which suits large corpos, if everyone is on contract it bypasses labour laws. It is these fundamental inequalities that create mass movements towards certain countries (UK is a prime example), which do undermine local jobs. Unfortunately I think Europe is being run down deliberately for asset stripping. Encouragement of growth and a move towards every EU country having proper welfare structures in place would be an EU of collaboration and partnership, instead of an EU of lost generations, precarious employment and the massive displacement of people from one end to the other. But that would take creativity and a degree of humanity which no one at the top seems to have.

  14. avatar
    nando

    I am copying what was written above:

    Well, ‘reform’ is a word with many different meanings. There is no question that reforms can be a good thing if they are the right reforms. But what are usually called ‘labour market reforms’ in Europe are certainly not in the best interest of workers. For example, the labour market reforms we’ve witnessed during the crisis, demanded by the European Commission or the Troika in different crisis countries, are very much against the interest of workers.

    For example, we’ve seen several reforms in different countries where the systems of collective bargaining has been practically destroyed, and this leads to lower wages, lower benefits for workers, and lower quality of jobs. These are definitely not the right reforms, and even in the long-term they don’t do any good.

    The official argument in favour of such reforms is, in fact, precisely that they should lower wages and then there will be more jobs because we have lower wages. But this is, of course, not true and is simply a false economic theory that is doing a lot of harm to Europe..

  15. avatar
    Nando Aidos

    More Troika and Brussels style reforms? Then the answer is NO! Enough of that nonsense!

  16. avatar
    Giorgo Moscholidis

    the 90 % of reforms and trade Unions lead to the shrinking of markets , lost jobs , and the big go bigger and the small go smaller

  17. avatar
    Греъм Стивънсън

    Debate? What debate? the apparent acceptability of the idea that people should be treated as units of labour that are to be traded between people who have “capital” is both absurd and abhorrent!

  18. avatar
    ironworker

    Trade Unions should do what they are suppose to do and nothing more. Protect members interest against abuses. When Trade Unions team up with corporations or governments, there existence is no longer required or justified.

  19. avatar
    Willem

    The Problem is that there is a competition between the labour law legislations in the countrys, which is in fact a race to the bottom. If the labour law in your country is not competitive, it is not worth it to fight for it. If the unions are successful and protect the law, the companys will simply go abroad.
    What the unions should do is to fight for labour law standards on a higher level. Maybe on EU-level, or even on a global Level. That would really protect workers.

  20. avatar
    Jorge A Lopes

    Not should or should not. They must…
    They must leave the 20th century paradigms and a change with the world!

  21. avatar
    klassen

    These reforms are imposed on france via brussels. They are building a level playing field or a fed. Trade unions wont except these kinds of reforms as they shouldnt but in the long run they will be forced. All eu countries are reforming in order to comply with upcoming forced integration.
    Hollande wont listen because he doesnt have to, he doesnt represent france , just like Rutte doesnt represent the netherlands. They belong to one group, and they are are all on the same page , they want a european version of america and will not back down. Every eu country has its own carefully placed eu puppet.
    Forced integration will take place in the next year or so after the uk in/out vote ,which of coarse the in side will win with 1 or 2% (will be rigged) ,and then they will waste no time building an eu army to keep offending countries in line.
    Labour reforms, pension cut or no more pensions, democracy thrown overboard , and a society based on social standing is whats in store..and lets not forget our corporate friends like monsanto/bayer and others and thier teams of laywers dictating the day.
    America has 45 million people using foodbanks, think about it, they have no labour laws, just greedy corporates pulling the strings.
    Reform means one thing , more for the top and less for the bottom!

  22. avatar
    SD

    I have been to France many times with my wife and it is always a great experience but what we could do without is the constant protesting of some kind of alleged labour disputes. I believe in workers rights to protest but everything has a limit, it’s kind of be. Protest shut down a country, shut down a way of life. But of course it is up to the French to decide what they want to do. Next time you land at Charles de Gaulle as I my wife did once and found no taxis because the taxi drivers were protesting just make sure to have your Uber app ready, use the code starionkue to get discounts, its mutually beneficial as I get rewarded too, youre welcome.

  23. avatar
    eusebio manuel vestias pecurto

    Do not get we wrong this is progress Labor legislation is not advanced the really we live in a free Europe the right to work is a human right France has among the most advantageous conditions for workers in Europe but you need the change them enough to attract businesses and create jobs As proponents say human dignity in Europe Human Rights

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