Economy
Atlantico Aubry Act 35-hour week celebrates 15 years. This reduction in the working week would have created 350,000 jobs. What about in practice? What has been the impact of this reform on the economy until today
Gilles Saint-Paul: These estimates are fantastic because they are based on Keynesian models that have not been developed to analyze such structural changes, but rather to describe the economic trend of the economy. It’s easy to understand the long term, an employee who works less produces less and therefore must be paid proportionally less for companies to retain their margin
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The unemployment rate is an equilibrium level which ensures that wages do not grow faster than productivity. To the extent that the RTT implies that greater wage restraint is necessary, we expect it to have an adverse impact on unemployment; Indeed, it must be “pressure” more unemployed to accept the employee’s pay cut involved the reduction of working time. It is therefore expected that the RTT does not create jobs, it is even plausible that it destroys, and in total the economy is impoverished because those who have jobs are working less. These problems are also illustrated by the case of road transport, including the strike made headlines in the news. The French road are the most expensive in Europe, largely because the number of annual hours is below their European competitors, which is why French carriers continue to lose market share. In such conditions, to strike for higher wages is simply suicidal.
It is true that, aware of the problem he had created (for pure demagogy to I believe), the Jospin government has implemented cost reductions to offset the rising cost of labor caused by the RTT. But they represent a hole for the budget, to be financed in one way or another. Either one increases again the charges on the sly, which obviously cancels the initial reduction or increasing the VAT or income tax. But as the latter type of measure reduces the purchasing power, we only replicate the inevitable drop in salary they forgot to mention in his electoral program. And the unions are trying to get around it by asking for higher wages, unless of course unemployment has risen enough to deter them. This shows that in the long term these offsetting cost reductions are disabled even if they reduce short term pain.
It is likely that the RTT has created jobs in the informal sector merchant, especially in the hospital. Indeed, it has no constraints of profitability and is financed by taxes. But these additional jobs does not improve the quality of care , they only compensate the reduction of working time. RTT has led, in this context, to impose an additional burden on the taxpayer without compensation. This is one of many irresponsible actions that led to a drift in public spending and thus a general impoverishment as a result of a tax system increasingly confiscatory
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Philippe Crevel: The 35 hours are an economic and political mistake. Economic because the Government considered that the reduction of working time would be a factor in growth and job creation when it is a result of growth through an indirect distribution of productivity gains. Policy mistake since Lionel Jospin was eliminated in the first round of the 2002 presidential election.
35 hours we celebrate the 15th anniversary of fall of real hoax. Since 1993, France is facing high unemployment and reached a record high of 10.8% in the first quarter of 1997. Since François Mitterrand, then President of the Republic had issued the famously, “in the fight against unemployment, we have tried everything, “the alchemists of all kinds were trying to sell their beverages to contradict the presidential fatalism. This is how Pierre Larrouturou revives the idea of the reduction of working time. Share the cake to reduce unemployment seduced green, holding the decay but also the right of officials as Gilles de Robien which even adopt, on 11 June 1996, a law encouraging companies to reduce working time. By cynicism, Lionel Jospin Martine Aubry entrusted with the task of applying this promise even if it there was hardly favorable. However, she found a way to warp his political position.
Dominique Strauss-Kahn in charge of the Socialist Party program takes up the proposal environmentalists, reduction of working time . Simply, it holds as working time 35 hours instead of 32 hours proposed by its allies in the plural left. It can further highlight that Francois Mitterrand, as part of its 110 proposals in 1981, planned to reduce working time from 40 to 35 hours.
The implementation of this famous reduction of working time was more qu’épique. Two laws were necessary. If at first, the idea of an optional application accompanied by financial incentives was imagined, Martine Aubry changed by imposing walk under his second law an automatic reduction for all companies, SMEs benefiting simply a deadline for compliance. The double set of Martine Aubry led to the resignation of Jean Gandois 1997 CNPF, former MEDEF. Jean Gandois including Martine Aubry had been the associate at Pechiney felt cheated. This episode has deeply influenced and still weighs on MEDEF’s relationship with power. He established a real climate of distrust.
35 hours increased labor costs 11% additional cost which was only partially offset with the introduction of exemptions from social security contributions. This exemption system costs taxpayers 12 billion euros. The increase in payroll occurred precisely when the international competition has increased, when the Germans decided to improve their competitiveness. While large companies managed to obtain concessions with the implementation of the annualization of working time, SMEs suffered the brunt of increased costs. The economic fabric was weakened. This weakness was revealed after several years with the crisis of 2008/2009 and more sharply since the one we know since 2012.
Initially, the government of Lionel Jospin said that 35 hours would allow the creation of 700,000 jobs. Today, some reports say they could generate 350,000 jobs. But for a more real vision should be able to evaluate the job destruction, activity they have caused. Indeed, they have contributed to the lower rate margin businesses. Our historical level of bankruptcies is partly attributable to him. Similarly, one should take into account the tax cost of compensation for social security exemptions, the tax cost of public jobs created in government.
In addition, the 35 hours have led stagnation of purchasing power of French assets. In order to absorb the additional cost of 11%, companies have been forced to reduce wage increases. I must admit that this argument is only partially correct. Governments have, in fact, decided to raise the minimum wage to align the hourly wage of the monthly salary. From 1997 to 2011, the value of the minimum wage rose from 6 at 9 euros an increase of 50%.
35 hours have accelerated the decline of hospital finances. They have resulted in an unprecedented growth in employment in local communities and in the social authorities.
35 hours were also fundamentally changed the relationship to work. RTT has become a social phenomenon. There are those who have and others. Middle managers have benefited from the reduction in working time when executives and independent gained nothing. Senior managers met to offset any presence of their employees. The use of independent has become a solution for large companies that can hardly play on internally schedules. Employees and workers have been losers because companies, especially large, with the annualization of working time, have less recourse to overtime.
35 hours have certainly favored the tourism sector. The long weekends, bridges lead to more trips but it concerns only a small portion of the assets.
The 35 hours are not for nothing in market losses French companies export and in the decline of the industry If France was still small trade surplus in 2002, the trade balance was in deficit since steadily
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