France Cracks Down On Hard Work
April 26, 1999
Last year, France's socialist government passed a law cutting the number of hours per week employees could legally work. Executive and managers are being fined stiff sums and threatened with imprisonment if they allow their employees to exceed the limit.
The number of hours of legal work is to be further reduced next year from 39 to 35.
The crack-down has had a number of repercussions.
- French press reports estimate capital flight out of the country at $100 billion since December of 1996 -- worsening unemployment and undercutting growth.
- By limiting the labor supply, France's skilled workers have become more expensive.
- Many workers are leaving for jobs abroad.
- The country's budget is being strained by subsidies to companies that hire while shortening the workweek.
The American Chamber of Commerce there has repeatedly warned French officials that rigid application of the law could affect future investment. As France's No. 1 investor, the U.S. created more than 8,000 jobs last year, and some 1.6 million jobs depend directly on U.S. companies.
Source: Gail Edmondson, "Busted -- For Working Hard," Business Week, May 3, 1999.
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