Laboring over the weekend

September 5, 2011

The irony was not lost on the timing of its release just before Labor Day weekend of Friday’s unemployment report showing the U.S. unemployment rate unchanged at 9 percent.  Relative to historical standards, this is catastrophic.

Here in France, unemployment improved slightly in Q2 but still hovers between 9.5 and 10%.  Relatively speaking, the figure is not quite as shocking as in the States.

But I think this will rise further for one simple explanation that highlights the contrast between France and U.S. labor markets.  In France, most unemployed persons receive 23 months of unemployment benefits equivalent to approximately 70% of their previous salary.  This is a very comfortable remuneration for 100% free time.  Talk about a paid, extended sabbatical that most working Americans could only dream of.

One modest proposal that re-surfaces every few years yet falls on deaf ears involves forcing the unemployed to work.  The idea of forced labor triggers unpleasant reactions.  But the latest incarnation of the concept actually strikes me as not unreasonable: the unemployed would only be forced to work in order to maintain their unemployment payments above a certain minimum threshhold; they could choose the company in which they work; and the work commitment could be structured as a part-time gig to allow the individual the critical time for activities like a proper job search, continuing education, or trade re-training.

The details would necessarily require substantial and legitimate debate, but it seems that the idea merits discussion.  What I like about it is what this could mean for France’s startup environment.  One of brakes on entrepreneurship in France is the challenge startups face in assuming the financial risk of hiring.  Reforming France’s restrictive labor laws is the systemic solution, but enabling startups to benefit from supplementary personnel without any financial risk would be more politically-palatable to implement and interesting to test in practice.



posted in Uncategorized by mark

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