France-Reforms: Labor’s Stubborness Pushes Capitalist Agenda

I sincerely believe there are some things the government should run with our tax money because they are a collective duty to the collectivity. Among these are health care, education, transportation, basic utilities. These are things which cannot be left to the profit-motivated private sector alone; they leave aside those less fortunate and unable to pay.

But what do you do when the public sector labor aristocracy, through its unions, uses its monopoly to gain special privileges at the expense of the tax payer? Such as early retirement (age 52 for the SNCF train company), cheap subsidized housing, free services, special health care facilities, generous vacation and so on. This is what has French public opinion so angry. This anger is allowing the government to push through sweeping reforms which will lead to the partial or full privatization of many services and that, of course, is the end game.

Milking the tax cow

There are some 40 special ‘regimes’ in France for sectors from civil servants to journalists. The costs of maintaining the privileges for these sectors is breaking the French bank. The debt for the train company alone is 50 billion euros and growing three billion a year. Half that debt is to pay for the generous retirement benefits.

The reforms do not apply to those under contract already which means French tax payers will continue to foot the bill for at least another 20 years until all have retired. In 2020, the SNCF will start issuing contracts with the same ‘general regime’ as the common French employee. It may seem like a timid approach to reform in a country which needs to save money. The French debt is nearly 100% of GDP.

But the real crime here is that unionized corporatism has opened the door to creeping privatization of sectors vital to everybody. The privatization of British Rail has led to sky-rocketing prices, delays, poor maintenance and more. Privatizing and opening up to competition Gas & Electric, Telecommunications and other services has neither improved the quality of those services, nor lowered costs to consumers. The French tax payer will suffer a reduction in the quality of service and higher prices, not just because of labor aristocracy greed, but also because, for decades, politicians allowed these public services to dig their own grave.

Mismanagement and cronyism are also to blame. Macron complains of a bloated administration and says the SNCF is 20% less efficient than Germany’s partially privatized Deutsche Bahn which turns a 2.2 billion euro yearly profit.

Making France attractive to investors

We live in a capitalist society. Macron believes France needs to modernize its labor force to make the country more attractive to investors and reduce stubbornly high unemployment. All his reforms go in this direction. Last year’s reform of labor laws makes it easier to hire and fire and reduces compensation to discharged employees as well as breaking up sector-wide collective bargaining agreements, giving employees the right to decide at the company level and bypass the unions.

The university reform is meant to get higher education to respond to the needs of the job market and put an end to the army of unemployed graduates. He is also looking for ways to get youth with migrant backgrounds off the dole and into jobs. No easy task; Youth unemployment in some project is 45%. The digitalization of the economy is expected to eliminate over the next ten years up to 40% of the jobs which exist today.

To be perfectly clear: very few taking to the streets of France this Spring are asking for workers control, self-management or proletarian socialism. They are marching to defend their special privileges which others are paying for and trying to convince the tax-payer, it’s for his own good. Their refusal for decades to make concessions to adapt to new economic and social realities has opened the door to doing away with a system of collective social responsibility which I support.