Labor Stability: Expensive and Unfair Utopia

The concept protects those who work for the state or in a formal company, at the price of excluding those looking for a job and in particular young people.

Tuesday, October 3, 2017

OPINION
Jorge Cobas González

In France, a country characterized by being one of the most advanced in protecting workers, the pendulum of history is changing the direction of its swing, meeting the demands of reality: the competitiveness of economies is based on the efficiency with which their resources are used. And in the Age of Knowledge, the human factor is the first to be taken into consideration in this matter.

The new French president Emmanuel Macron says that the labor reform project will ease hirings and dismissals in order to attract new investment and reduce chronic unemployment: "The change will encourage employers to take people on. It's about breaking a system that protects very well the insiders [those who are in the system], who benefit from a stable contract, but at the price of the complete exclusion of other, younger, less qualified people."

As the article on Elpais.com reports,   "... The reform provides a margin for employers and workers to negotiate agreements in the field of companies on issues such as working hours or compensation. The idea is to decentralize, bring labor negotiations closer to the ground, and allow adaptation to the ups and downs of the current situation.  In return, compensation for legal dismissals - that is to say, not unfair ones- increases by 25%. France will help foreign investors with redundancies in the event of economic hardship, a measure designed to attract multinational corporations.  Up until now French authorities had to take into account the situation of the company in all the countries where it operated; now it will be enough for things to go wrong in France. Another key measure is the merger into a single event of the multiple instances where workers of a company are represented today, and the possibility of negotiating in companies of less than 50 workers without going through the unions and avoiding sectoral agreements."

Unemployment in France is 9.5%, in a context of high fiscal deficit, which forces "... a shift from one of the countries with the most rigid labor laws in the developed world, towards the principles of so-called flexicurity , the combination of flexibility for business and safety for workers.

In Central America, where inequality in living conditions and personal development opportunities are among the highest in the world, regulatory rules of the labor market are maintained - and continually added to - and minimum wages are set to protect the fortunate public employees and workers in the formal sector, to the detriment of the opportunities to obtain work for those who are unemployed and young people trying to find work.

See article Macron will ease dismissal and hiring to reduce unemployment. (In Spanish)

More on this topic

Costa Rica 's Pending Issues in Labor Matters

October 2017

"More than half of the adult population has not managed to approve the second cycle of secondary education, meaning that many Costa Ricans will have to acquire new skills in order to take advantage of new job opportunities."

From a report by the OECD:

18/10/2017 - Costa Rica enjoys relatively high life satisfaction levels, but should do more to develop a more inclusive and sustainable economy, according to a new OECD report.

Costa Rica: For and Against Labor Flexibility

July 2014

Unions reject a proposal by industrialists to work 4 days and rest 3 days, whle the government describes it as a "sensitive" issue.

The Minister of Labour, Victor Morales, told Crhoy.com that "....These proposals concerning working hours require legislative amendment, they need a reform of the Labour Code to be approved in the Legislature ...

Flexible Working Hours Requested in Costa Rica

July 2014

Industrialists are asking for inclusion in the Labour Code a 12 hour work day, and in cases in where the law permits, annualized hours.

From a statement issued by the Chamber of Industries (ICRC):

July 2014. In the view of the ICRC establishing additional rules for working time in Costa Rican legislation represents an excellent option for generating higher quality employment opportunities, while at the same time allowing firms to improve their production levels.

Panama: Economic Growth Vs. Employment

October 2013

While the unemployment rate remains the lowest in Latin America, an even greater level of preparedness of the workforce is needed to achieve dynamic and sustainable growth.

According to an article in Capital.com.pa the rate of employment growth is no longer parallel to economic growth, noting that "According to official figures, between March 2012 and March 2013 there was a decrease in the labour force of nearly 7,000 jobs. "

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