IREF - Institute for Research in Economic and Fiscal issues
Fiscal competition and economic freedom
And in France, there is a high level of unemployment whereas it is low elsewhere. And elsewhere, there is no Labor Code, no unions, no judges, and everybody is satisfied with the freedom of work, as reported by IREF European contributors.
France is hampered by a truly outdated Labor Code, applied word by word by judges without any subtlety. French major stores as Sephora, Leroy Merlin, Castorama and Monoprix showed once more the extend of the French unions’ devastating effects, especially from the CGT, the main French union which is communist.
For foreigners, it sounds bizarre that a court of appeals is deciding whether a store should open or if a company is bankrupted. In France, judges – who are of the utmost ignorance about business and entrepreneurship as the unions are – have the power to shut down companies and force CEOs to compensate workers as if they were always to be held responsible of companies’ failures.
In most of the other countries, it is not worked out this way. Our IREF contributors enlightened us about their own country.
In Germany – where there is no Labor Code! – each Länder’s parliament decides about stores opening restrictions on Sunday or during the night. In 12 Länder on 16, the law allows a 24h opening during the week. In 8 Länder, it can be done on Saturday and Sunday. Unions and judges have no involvement whatsover in how stores and companies are working.
In Sweden, previously the standard of the Welfare State, things are even clearer: stores are totally free. In 1972, opening hours were set freely, which was the exception in Europe at that time. In 1975, a Parliament committee wanted to regulate this sector (except the Liberal Party and the Moderate Party), but the proposal has never been implemented even if it remained on the agenda up to 1991. The Trade Workers Union still maintained its claims till the end of the 1990’s, but is now opposed only to night opening since most of the employees are in favor – as in France – of working during the night and on week ends because of the extra money earned.
The paradox is that, owing to the employment situation in France (10.9% unemployment rate), compare to Sweden (7.8%) and Germany (5.5%), work and trade should the freest in France. But, France has the Labor Code, the Unions and the Judges : these are unemployment’s best friends!