[lit-ideas] Re: Are you out there, Didier?

Teemu,

 

I just heard on the radio that Chirac signed the subject bill into law;
although he modified the portion under discussion.  He lowered the period
from 2 years to 1 year and added a proviso that an employer must have a
reason for laying an employee off.

 

What US corporation do you work for?  Does it need to meet the same worker
requirements as everyone else in Finland?  Presumably so.  Why do they have
a problem competing in the global market?

 

Italy a basket case?  I mentioned reading Oriana Fallaci's The Rage and the
Pride.  I'm now reading her follow-up book, The Force of Reason.  She
describes most of Europe as being a basket case.

 

Lawrence

 

-----Original Message-----
From: lit-ideas-bounce@xxxxxxxxxxxxx [mailto:lit-ideas-bounce@xxxxxxxxxxxxx]
On Behalf Of Teemu Pyyluoma
Sent: Friday, March 31, 2006 1:59 PM
To: lit-ideas@xxxxxxxxxxxxx
Subject: [lit-ideas] Re: Are you out there, Didier?

 

Lawrence, the current problems with European economy

are about German, French and Italian economy. Italy is

a different basket case, but German and French

corporations in general seem to have no problems

competing in the global economy, it is the domestic

demand and consumer economy in general that is the

problem. I also have to note that the companies having

trouble competing in the global market place are more

often than not big US corporations, something that

gives me no satisfaction as I work for one. I have a

cultural explanation for this and in a nut shell it

boils down to amount of red tape that makes Russian

bureaucracy look efficent...

 

But that is beside the point. As Munchau, an editor in

an economically right-wing business paper, notes the

Villepin proposal is economically and politically

counter-productive. It is very hard to see how it

would create new jobs, as it applies to only those

under 26. The kind of economic havoc further strikes

will cause will certainly out do any benefits. And

anyway it has mainly to do with goverment jobs,

private sector can and does fire people too in France

I believe.

 

The political price is far bigger. As much I dislike

the conservative left, I have even bigger problem with

dimwit reformists, namely because I symphatize with

their aims. We've got this cheerleader crowd who

reflexilevely supports any kind of measures to lower

employment protection, whether they work or not.

Lay-off periods, severance packages and so on are

basically part of compensation given to the worker.

From an employer perspective, that you have to pay say

six months salary to someone you fire has a cost of

the propability you me indeed lay him of multiplied by

six months salary. That we should in effect, given

alreay week domestic demand, effectively lower wages

doesn't seem particullary good for anyone involved.

And increased insecurity leads to excess savings, see

China and US current account deficit, which leads to

deficent demand.

 

I am in favor of the Scandinavian model, that does

seem to lead to very high employment, that is you

protect workers and not jobs (this is part of the

general concensus Blanchard outlines). High

unemployment benefits coupled with both reguirement to

seek a job, and help finding it, and if needed

training. The continental model of making lay offs

hard simply gets the problem wrong, that people loose

jobs is not that bad, that they can't find another is.

But the current French proposal doesn't really address

this in a meaningful way.

 

 

Cheers,

Teemu

Helsinki, Finland

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