Commentary: France: Labor Disarray Is Giving Reform a Chance

By Carol Matlack

Storm clouds gathered over Paris early on the morning of June 3, lending an ominous tone to a threatened "black Tuesday" of nationwide strikes called by government-employee unions. But by midmorning the clouds had dissipated -- and so had the threat of major disruption. Most transit workers, school personnel, and postal workers simply reported to work as usual.

The big surprise in France this spring has been organized labor's failure to derail Prime Minister Jean-Pierre Raffarin's push to overhaul the state-funded pension system. That's in stark contrast to 1997, when the previous center-right government was ousted after its pension-reform efforts touched off paralyzing strikes. Raffarin's plan, which will extend the number of years workers must pay into the cash-strapped system before retiring, will be presented to Parliament on June 10 and is expected to pass easily.

Much of the credit goes to Raffarin, who began laying the political groundwork for pension reform immediately after taking office last summer. Breaking with the practice of previous conservative governments, he consulted regularly with labor leaders and even got the country's biggest union, the 890,000-strong Confédération Démocratique Française du Travail (cfdt), to sign off on his plan. He also took his case directly to the public, with newspaper advertisements warning that the pension system was dangerously short of funds. Raffarin even headed off a crisis with teachers' unions, which had threatened to cancel end-of-year exams in protest over a government plan to reorganize parts of the national education system.

It's not just masterful politicking. Unions are a much less formidable adversary now, not only in France but across much of the Continent. Membership has been falling steadily since the 1980s, with about 25% of workers in Germany and fewer than 10% in France now card-carrying members. And because of Europe's economic malaise, governments are under mounting pressure to cut costly social programs and relax labor rules that deter hiring. For all their fiery rhetoric, many union leaders understand that some reforms can no longer be postponed, says Guy Groux, a labor expert at the Center for the Study of French Political Life. "But they're afraid of alienating their militant base, which won't accept a position of negotiation."

But by bowing to the hard-liners, union chiefs risk alienating less militant nonunion workers, without whom they can't mobilize massive work stoppages. And they're annoying the public. "Civil servants don't realize that this [pension reform] is for their own good and the good of everyone," says Ibrahim Sylla, a 32-year-old cook at a Paris restaurant.

To be sure, even weakened labor unions can still make life miserable. Although ground transportation wasn't badly affected by the June 3 French strikes, 80% of flights in and out of the country had to be canceled. The same day, Austrian strikers protesting pension reforms left Vienna without public transport or postal service. Smaller demonstrations snarled up traffic in parts of Germany and Italy.

Nonetheless, labor's disarray provides an opening for Europe's politicians to move forward on long-overdue reforms. That's happening in Germany, where Chancellor Gerhard Schröder looks likely to win passage of a labor-reform package, even though three-fourths of the Parliamentary deputies from his Social Democratic Party are union members.

Just as important, there's an opening for French unions to modernize, and in the process, restore their credibility. Besides signing onto Raffarin's pension proposal, the cfdt has worked with French employers' groups to overhaul social programs such as unemployment benefits. "I judge reform by results, not political labels," the cfdt secretary-general, François Chérèque, has said.

That brand of pragmatism sells. The cfdt is the only major French union that's growing. Who knows, France's black Tuesdays may be numbered.

Matlack covers French politics and labor issues.

    Before it's here, it's on the Bloomberg Terminal.
    LEARN MORE