Repealing the 35 hour week
France appears to be making tentative steps towards repealing the 35 hour week. From an economic perspective, the 35 hour week was an extremely weak decision by the french government. Largely pushed on via the powerful french unions, it was based on the lump of labor fallacy fallacy in which it was believed that the amount of work is fixed and thus any increase in the amount each worker can produce reduces the number of available jobs.
This was the same argument pushed forward in the 50’s in which automation would lead to mass unemployment and again later, where computers would destroy entire communities. The fallacy is that work is a finite resource, a lump which is shared out so that if one person works, it means someone else isn’t. It fails to realise that labour markets change and adapt according to supply and demand, and through migration of labour and capital (human and financial).
It’s easy to see this in the real world. Britain and the US have had large proportions of their population working in agriculture, fishing and mining, industries which today are barely noticible on the national balance sheet. Typists and typewriters were ubiquitous in the offices of the 50’s and are barely recognisable to the current generation. Far from wreaking havoc on the country via large scale unemployment however, the economy has in fact grown. New types of jobs have been created and existing industries strengthened by the increases in productivity. Demand absorbs and recreates demand. The act of employment is not a zero sum game.
In France, the results of the 35 hour week have been fairly miserable. Economic growth has been depressed and the unemployment is at around 10%. Government subsidies were also initiated to bail out companies affected by the higher labour costs. The higher cost of labour has also lead to companies reducing/freezing pay rises as well as increase the amount of outsourcing and use of labour saving machinery. Undoing the damage is going to require bold decisions.
That said, the 35 hour week has not been all doom and gloom. Leisure pursuits have soared as a result of the increase in free time. Blacksmithing as an industry is even reviving as more people are taking up horse-riding. Parents now have more times to spend with their family. Hence, whilst from an economic perspective, it may have been a poor decision, it’s a much more debatable issue from a sociological viewpoint.
It does remain to be seen if financial sense will prevail against the powerful unions and sway the french public. Inertia and attachment may yet prove hard to dislodge.