Jobs in France Dip to Record Levels, IMF blames Rigid Labor Market

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Jobs in France Dip to Record Levels, IMF blames Rigid Labor Market
Jobs in France Dip to Record Levels, IMF blames Rigid Labor Market

Jobs in France Dip to Record Levels, IMF blames Rigid Labor Market

Unemployment rate in France has reached to double digits. It hit 10.4% in the first quarter of 2013 which is the highest since early 1998. The unemployment rate even went higher when French territories and islands are included as it goes up to 10.8%, reveals the national statistics agency, INSEE of France.

Whereas the French government is trying to bring its economy on track, the increasing unemployment rate will definitely dent its recovery. A lot of voices from various organizations coming up urging the French government to bring changes in labor laws as the existing laws are making it difficult for organizations and companies to hire people.

International Monetary Fund Asks for Flexible Labor Laws

Rigid labor laws discourage employers; the International Monetary Fund has concluded that France’s rigid labor market is a major issue dragging the national economy down as the new jobs are not being created. The organization also says that apart from rigid labor laws, high taxes and inefficient public spending are two other major reasons behind the economic slowdown.

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Loads of French Crossing Rhine to Get Jobs in Germany

The difference between German and French employment laws is visible from the fact that whereas France hasn’t revamped its labor market, Germany brought gradual changes that help in employment generation. Now, in consequence, Germany has a lot of jobs not only for its nationals but for French and other Europeans.

Economists are even opining that France and other Euro Zone countries may take cue from Germany which managed its economy and employment well that improved job-search efficiency, helped unemployed people learn new skills for full time and part time jobs, even when the chips were down during the 2008-2009 recession.

In contrast to Germany, France has a 3,200-page national labor rulebook which has extensive rules and regulations regarding employment conditions, rules for layoff, compensation, etc. that according to several business groups do not play constructive role in generating employment. Not only the International Monetary Fund, but German Chancellor Angela Merkel’s government has asked French President Francois Hollande for competitive labor laws.

Those who go from France to Germany have language problems; now, it will be seen how the issue is tackled so that both parties benefit from it. Germany, the economic power house of the Euro zone, has definitely set an example for other member countries on how unemployment can be tackled and jobs are generated.

To contact the reporter of this story: Jonathan Millet at john@forexminute.com