For the past several years, France has seen a high unemployment rate plague the country’s economic growth. The root of this macroeconomic issue stems from France’s outdated labor market, which has been criticized for its structural inflexibility, high labor cost, and structural unemployment. The repercussions of France’s unemployment crisis places pressure on the government to help mitigate and resolve this economic issue. With reelection months away, France’s current president, François Hollande, has vowed that he will only run for reelection if he successfully lowers the unemployment rate.
In response to high unemployment rates, President Hollande is looking to revitalize job opportunity mainly through a labor market reform policy. The proposed …show more content…
The current size regulations of businesses state that once a company hires fifty workers, it becomes subject to more governmental regulations and requirements. In order to maintain flexibility and avoid costs that would come with having to implement policies and operations to meet those new regulations, companies in France have restricted their hiring process to only forty-nine employees, which is right below the fifty person threshold. By abolishing these regulations, the President believes that companies would hire more employees, therefore lowering the country’s unemployment rate while also increasing the aggregate production output. With a rising aggregate production output, the country’s aggregate supply curve shifts leftward, thereby increasing France’s total …show more content…
In fact, a recent poll discovered that seventy-seven percent of respondents do not believe that these reforms would lower unemployment at all (the local). Furthermore, Laurent Berger, the head of the French Democratic Confederation, told the media that he believes that the financial incentives for hiring will be too expensive (the local). Moreover, labor and student unions are in opposition of the labor laws because they say it will lead to a weakening of worker protection. Due to the disagreement of the President’s policies from a diverse group of people, it is hard to see the policies being fully embraced and therefore
In response to high unemployment rates, President Hollande is looking to revitalize job opportunity mainly through a labor market reform policy. The proposed …show more content…
The current size regulations of businesses state that once a company hires fifty workers, it becomes subject to more governmental regulations and requirements. In order to maintain flexibility and avoid costs that would come with having to implement policies and operations to meet those new regulations, companies in France have restricted their hiring process to only forty-nine employees, which is right below the fifty person threshold. By abolishing these regulations, the President believes that companies would hire more employees, therefore lowering the country’s unemployment rate while also increasing the aggregate production output. With a rising aggregate production output, the country’s aggregate supply curve shifts leftward, thereby increasing France’s total …show more content…
In fact, a recent poll discovered that seventy-seven percent of respondents do not believe that these reforms would lower unemployment at all (the local). Furthermore, Laurent Berger, the head of the French Democratic Confederation, told the media that he believes that the financial incentives for hiring will be too expensive (the local). Moreover, labor and student unions are in opposition of the labor laws because they say it will lead to a weakening of worker protection. Due to the disagreement of the President’s policies from a diverse group of people, it is hard to see the policies being fully embraced and therefore