Labor Market Reforms in France and the Job Law 'CPE' - A Lost
Opportunity
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ICMR HOME | Case Studies Collection
Case Details:
Case Code : BENV004
Case Length : 16 Pages
Period : 1991-2006
Pub Date : 2006
Teaching Note :Not Available
Organization : French Government, Labor Union
Industry : Labor
Countries : France
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Please note:
This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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Introduction Contd...
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The French Prime Minister Dominique de Villepin (Villepin) supported by Chirac,
had argued that the CPE would enable young people to find jobs more easily, and,
at the same time, make it easier for the employers to dismiss them if they were
found unsuitable.
After scrapping of the CPE, students and labor union leaders declared victory
and thousands of opponents of the CPE held victory marches all over France. In
contrast to the jubilant atmosphere among the protestors, there was despair
among business entrepreneurs. Laurence Parisot, the President of 'Medef'6 said
that the withdrawal of the CPE had shaken business confidence.
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Commenting on the victory declerations by unions, she said, "They were wrong to
see this as a victory. After victories like this, we will all become
losers."7
Background Note
The welfare state8 in Europe has developed and evolved over several decades.
It could be traced back to the introduction of social insurance programs in
Germany in the late 19th century. Otto von Bismarck9 introduced health
insurance for workers in 1883.
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This was
followed by accident insurance in 1884, while old age pensions and
disability insurance were introduced in 1889. Later, in the late 19th
and early 20th centuries, the development of trade unions and leftist
movements in Europe strengthened the bargaining power of workers in
dealing with managements.
The labor unions also had strong support from certain mainstream
political parties (which were popular enough to form governments as
well) and so workers were an important segment of the electorate and had
strong political representation. |
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