Indicators: 35 Hour Workweek

On October 10, Prime Minister Lionel Jospin, a moderate socialist, announced the standard workweek in France will be reduced from 39 to 35 hours with no loss in pay.

The French government expects that a shorter workweek will significantly reduce France's 12.5 percent unemployment rate, thereby saving the government billions of francs annually on the cost of unemployment benefits. The government will direct these savings at supporting job creation for the unemployed and more free time for those with jobs.

Beginning on January 1, 2000, the government plans to provide financial incentives to encourage employers and employees to negotiate shorter work hours. Companies that implement the 35-hour workweek and increase their employment by at least 6 percent will see a cut in payroll taxes. More generous support will go to firms that introduce a 32-hour workweek and boost employment by at least 9 percent. Firms with 10 employees or less will be exempt from financial penalties for not implementing the 35-hour week until 2002.

The decision has prompted a serious backlash among France's business leaders. Jean Gandois, president of the National Council of French Employers (CNPF), denounced "the organized plot by the government and the unions to marginalize us." He then resigned his post, calling for a successor with more of a "killer instinct" to defend business interests against the Socialist-Communist-Green majority who introduced the plan.

A source close to Jospin said that the employers' union had refused to compromise, leaving the administration little choice: "We were faced with ... creating profound disappointment in the government and possibly a crisis within the left coalition, or possibly annoying the CNPF."

The specifics of the plan will be revealed through two laws. The first, in 1998, will fix the work week at 35 hours by the year 2000. A second law in 1999 will clarify the details. This two-year period before the law is enforced will allow employers to launch a counterattack by increasing pressure for gains in productivity and "restructuring" the workplace in an attempt to reduce the costs they will incur as a result of the laws.

The French decision has already had an impact on the labor movement internationally, giving rise to renewed demands for cutting hours in a number of European countries, particularly in Italy.
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