From LABOR-L@YORKU.CA Tue Jun 19 15:06:19 2001
Date: Tue, 19 Jun 2001 13:46:47 -0400
Sender: Forum on Labor in the Global Economy <LABOR-L@YORKU.CA>
From: Charles Brown <CharlesB@CNCL.CI.DETROIT.MI.US>
Subject: Vive la France

The French miracle: A shorter week, more jobs and men doing the ironing

By John Lichfield, [The Independent], 19 June 2001

Official study finds that France's 35-hour week has boosted the economy and proved a hit with both employees and their bosses

Madame Niki, a hairdresser in the 17th arrondissement of Paris, used to dread Friday evenings. Everyone wanted to have their hair done before they left for the weekend, she said. Now I close down most Fridays. There is no business. They all come on Thursdays instead. The reason for the change is simple, Madame Niki says. The 35-hour week allows a large part of the Parisian office and shop working population to take an extra day off.

France's experiment with a state-imposed, shorter working week—mocked by the workaholic and market-driven British and Americans three years ago—is beginning to alter the country's rigid social patterns.

Weekends now start on Thursdays or end on Tuesdays; many younger, working mothers choose to stay at home on Wednesdays, when French children are traditionally off school.

Middle-range French executives, on a 1,600-hour working year, find that they have an average of two weeks' extra holiday (on top of the six weeks they already had). Leisure and DIY sales are booming.

There is even anecdotal evidence that French male, blue-collar workers are doing the midweek shopping; or learning how the iron works.

The law, pushed through by the former employment minister Martine Aubry, already applies to six million employees in France, just over half the workforce. Next year, small companies with up to 20 workers will be given shorter working hours for the first time. A number of categories—including senior business executives, doctors, lawyers, journalists and soldiers—are exempted.

But what effect is all this having on the French economy? And French unemployment (which was the whole point of a shorter week in the first place)? An official report published yesterday said that the mandatory 35-hour week, and its voluntary predecessor, had created 285,000 jobs in the past five years. By the time the law applies fully to smaller companies in 2003, it should have created 500,000 jobs, the report by Le Plan, the French state's strategic planning body, said.

This is far fewer than the 700,000 new jobs forecast by Lionel Jospin's centre-left coalition government when it came to power, promising a statutory 35-hour week, four years ago this month. It is, though, by no means the calamity forecast by business leaders and orthodox market economists—both French and Anglo-Saxon.

The principle of a state-imposed reduction in the working week—from 39 hours to 35, without a reduction in wages—would be ruinous to French competitiveness, they said. It would discourage foreign investment. It would increase taxes and social charges because the government would have to compensate employers. It would destroy more jobs than it created. None of that has happened, yet.

French unemployment has fallen from 12.6 per cent in June 1997 to 8.5 per cent this month, the lowest figure for 18 years. Almost one percentage point of this reduction should be attributed directly to jobs created by the reduction of the working week, according to yesterday's report.

Perhaps more important still, it says that the shorter working week has helped to dispel the atmosphere of all-encompassing pessimism which gripped France in the mid-1990s. It has increased consumer confidence and consumer spending—boosting rather than crippling the French economy. Foreign investment in France is booming. Social charges on employers have not been increased so far but a potentially damaging row is still in progress on how to pay the £1.5bn (at least) unbudgeted, extra annual cost of subsidising companies who have switched to the shorter week.

In the meantime, the 35-hour experiment had started to attract admiring glances from across the Channel.

Last week, the Industrial Society, a think-tank with broadly Blairist views, painted a mostly positive picture of the reduction in working time in France. By flying in the face of Anglo-Saxon economic orthodoxy, the French seem to be winning the battle over how to give employees a better balance between work and private life, the report said. The French seem to be throwing away the textbook of labour market policies, said the report's author, the economist Charlotte Thorne. If the French experiment works then the UK Government may be forced to look at France rather than the US for new ideas about reforming the jobs market.

Britain is still in the mind-set that we have to work incredibly long hours ...Practically, there is no reason why we shouldn't have a 35-hour week here, but culturally we are a million miles away.

In truth, the effects of the 35-hour week in France can be difficult to pin down. Some business leaders point out that negotiations on reducing working time have permitted companies to scrape away years of accumulated restrictive practices. In return for shorter, annual hours, workers have agreed to more flexible hours; to work longer days or to come into the office or factory on weekends; even, miraculously, to work during the month of August. The result has been a windfall of productivity. The negotiations have also forced businesses to think again about who they employ and why.

The result, according to Régisse Versaeud, head of the insurance services sector of the CFDT trades union federation, is that some of his members complain that they are being made to work too hard when they are at the office. Overall, the response from members is that they approve of the changes but I think employers have, in some cases, taken the opportunity to load too many tasks on individuals.

Something like 2,800 new jobs have been created in insurance offices by the 35-hour law in the last three years but we think the figure could still be even higher.

The government is having difficulty in making its own bill add up. The cost of subsidising employers who created new jobs was to be borne by lower unemployment payments, the existing social security budget and extra taxes on alcohol and tobacco. The Jospin government now faces a shortfall of at least £1.5bn a year, which it proposes to take from a large, but possibly temporary, surplus in the social security (health and pensions) budget. In the longer term, employers protest, that means they may be forced to pay for their own subsidies.

In the meantime, the government could be said to be, in effect, buying the new jobs. The net cost to the French treasury of subsidising employers shifting to a 35-hour week is estimated in yesterday's report by Le Plan at £4,600 per new job. Orthodox economists might argue that the money might have been better used on reducing business taxes—or building more TGV lines.

At a social level, the 35-hour week is already a great success and will be one of Mr Jospin's trump cards in the presidential elections next year. President Jacques Chirac, his principal rival, criticised the idea as ideologically obsolete.

Two-thirds of people on a shorter week say that it has improved their lives. Working women, especially, say that a four-day week, or shorter working day, has made their lives tolerable for the first time.

Madame Niki in the hairdressing salon in the 17th arrondissement now has most Fridays off, as do her clients. The concentration of her trade on fewer days has also meant that she did not replace her assistant when she left last year. Mark that down for one job lost by the 35-hour week.

The French worker

Bénedicte Rifai:

Fantastic, incredible, a complete change in the way I live. I see my small daughter for an extra day each week and my wages are virtually the same.

Bénedicte Rifai, 28, is a junior financial analyst with the French electricity board, Electricité de France, which also owns the London Electricity Board. Since the introduction of the 35-hour working week—or technically speaking, a 1,600-hour year—at EDF last year, Ms Rifai has worked a four-day week. She still earns £27,000 a year, only slightly less than her job commanded when it was spread over five days.

We can choose ourselves, more or less, how to work the hours, she said.

Some people go home at three in the afternoon every day. Some people take longer holidays. Working mothers, like me, often choose to take Wednesdays off, because many schools in France are closed at least half the day. It means I can save on child-minding costs and spend a whole extra day with my daughter. It's difficult now to remember how people coped with a full five-day week.

I used to work in New York and I've seen the other side of the coin—long days and only two weeks' holidays. I think our way is healthier and more civilised and, in the end, good for the company too. The employees can concentrate when they are at the job.

The British worker

Lucy Finn:

She typically works a 40 to 45-hour week as a human resources manager for London Electricity and is responsible for the recruitment, development and retention of 1,000 members of staff and heads a team of five at the company's central London headquarters.

Mrs Finn, 28, works a five-day week but has a lot of flexibility over when she arrives at the office and when she leaves, depending on the daily workload.

My job is fairly flexible. Some weeks I am in at 8am and out at 6pm, but other days I manage to do 9am to 5.30pm. If I work long hours, it is recognised and I can make up for it.

Shehas worked for London Electricity for three years, is married and has no children. As a junior executive, she feels her £34,000 salary, holiday entitlement and other benefits make up for working longer than her French counterparts.

She agrees Britain has a long-hours culture, but says firms have become more flexible.

She does not hanker after a 35-hour week. I think some of the salaries in France are a bit lower. There are also cultural differences. They have a different way of life. It is difficult to say what works in one country should work in another.