A postcard from France

Roger Partridge
Insights Newsletter
6 July, 2018

While New Zealand is in political Neverland, I am taking refuge in rural France. Just an hour north of the vineyards of Bordeaux, it is no great hardship. Yet it provides a perfect opportunity to compare Kiwi and Gallic approaches to some common challenges. And I am not talking about on the vineyard or the rugby field but in public policy.

With our government’s proposals for European-style fair pay agreements, there is no better place to start than labour law.

You need not travel to Europe to hear of France’s dire industrial relations. But it is more real witnessing the effects of them first-hand.

Trains in France are disrupted due to rail strikes. Industrial action started in March and is still ongoing. French railway workers are protesting plans to modernise the state rail company and to open the French railway network to competition.

Travel by air is also disrupted. A fortnight ago, hundreds of flights were cancelled because of strike action by air traffic controllers. In France, though, this is hardly news. Between 2004 and 2016, French air traffic controllers were on strike for 254 days.

And late last month, Air France unions announced new strike days - only to call them off because Air France has no CEO, so there is no one with whom they can negotiate. (The previous CEO resigned when unions rejected a pay increase aimed at bringing an end to an earlier strike.)

With all this industrial action, you might think that French labour markets were running hot, creating pressure from workers for higher wages. The reality could not be more different. Employment in France is in the doldrums. Unemployment sits at 9.7%, and youth unemployment is staggering, with one-in-four 18-24-year-olds out of work.

A primary cause of French unemployment is the labour markets themselves. Industrial relations in France are dominated by union negotiated, industry-wide awards. And they have proved exceptionally inefficient, hampering the productivity and competitiveness of French businesses and dampening the French economy.

Not surprisingly, among French President Emmanuel Macron’s highest priorities is reforming labour laws. His goal is to simplify negotiations between employers and potential employees by limiting trade union influence over them.

Unfortunately, this is the opposite of what our Labour-led government is planning with fair pay agreements.

It is a pity Prime Minister Ardern was not relying on public transport when she met President Macron in Paris in April.  It would have been a valuable French lesson. 

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