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Unemployment in
France touched 10.2% in April, a number last seen in 1999 according to data
from Eurostat.
The question on newly-elected President Francois Hollande's
mind is what to do about it.
Economic Insanity
Hollande's layoff clampdown solution according
to Labour Minister Michel Sapin
is to "make layoffs so expensive for companies that it's not worth it."
France's new
Socialist government is planning to ramp up the cost of laying off workers
for companies in the coming months, its labour
minister said on Thursday after data showed the jobless rate hit the highest
level this century at 10 percent.
"The main idea is to make layoffs so expensive for companies that it's
not worth it," Sapin said in an interview with
France Info radio.
"It's not a question of sanctions, but workers have to have compensation
at the right level," he said.
Industry Minister Arnaud Montebourg is also
planning legislation that would force companies to sell plants they want to
get rid of at market prices to avoid closures and job losses.
Four Things, All of
Them Bad
1.
Mass layoffs will occur before the law passes.
2.
Companies will move any jobs they can overseas.
3.
Ongoing, if it's difficult to fire people, companies
will not hire them in the first place.
4.
Corporate profits will collapse along with the stock
market should the need to fire people arise.
The proposal to force companies to sell plants rather than fire workers as
outlined by Industry Minister Arnaud Montebourg and
Labour Minister Michel Sapin
is nothing short of economic insanity.
Nannycrat Dilemma
Think the Nannycrats in Brussels will go for this
idea? If they do, they will wreck all of Europe. If they don't, then how are
they going to "harmonize" everything?
For more on nannycrats and the nannyzone please see ...
·
Huge Nannycrat
Conflict Coming Right Up; Hollande Lowers Pension
Age to 60
·
Another Meaningless Nannycrat Rumor: Europe Mulls "Secret Plan for New
Europe"
·
"Multi-Stage" Nannycrat Proposals; Devaluation - The Last Option? Note
to Wolfgang Münchau, Martin Wolf, Jeremy
Siegel at the Financial Times: Focus on the Obtanium
not the Unobtanium
Also see my original post on the "nannyzone"
written June 2, 2011, nearly one year ago today: Trichet Calls for Creation of European "Nanny-State"
and Fiscal "Nanny-Zone"
Addendum:
Reader "Bob" writes ....
Point 3 is the biggest but it gets even more insidious. The companies that
have enough employees now are generally larger companies with a political
voice. The companies that will need employees later are generally smaller,
entrepreneurial companies with no political voice.
Since most job creation happens at the entrepreneurial level, the proposed
policy will subsidize corporate stagnation while stemming the flow of
entrepreneurial companies entering the market.
Over the long haul, this will kill France's economic competitiveness while
increasing unemployment.
Recall government enforced jobs in the former USSR in the 1980's. How well
did that go? Things got got so bad the USSR had to
dissolve.
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