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back to index backGLOBALtalk August,  2006


Europe: 4 Hours a Day, 3 Days a Week

European labor markets are encrusted and sclerotic, right?  Tell that to Jean-Pierre Lemonnier.

Mr. Lemonnier is out in front on a seismic shift in the way Europeans work, one that is provoking the rapid decline of the traditional full-time job. Long taboo in the mind-sets of European labor unions and governments, part-time work and temporary jobs are becoming by far the richest source of new employment across Europe. "There's a need for flexibility," said Mr. Lemonnier, 47, the president of Manpower France, the temporary staffing company. "Firing, on economic grounds, in a company with more than nine people, is extremely complicated. So temporary work is the simplest solution for the companies."

Europe's unemployment rate is still has about twice that in the United States. Yet, in the last five years employment growth for both part- and full-time jobs has been faster in the 12 nations that use the common currency, the euro, than in the United States, where the labor market stagnated and even briefly contracted in 2001 and 2002.

In the years 2000 to 2003, employment increased cumulatively by about 3.5 percent in the euro area, while quarterly employment growth in the United States was on average close to zero and fell cumulatively by almost 1 percent. Since 2004, employment growth has picked up considerably in the United States but has slowed slightly in the euro area.

Some say the more buoyant European job growth is partly a result of strong employment gains in some countries that have offset lags elsewhere. "If you take the whole of Europe, " said Alexander Spermann, a labor market expert at the Center for European Economic Research in Mannheim, Germany, "it's the old Europe that has a problem: Germany, Italy, France." Countries like Denmark, the Netherlands and Britain had greater success in job creation, he said.

But a closer look at the numbers suggests that what has chiefly lifted job growth is the explosion of part-time and temporary work.

"There has been expansion, in any case, but not in the kind of jobs that count as full-time regular jobs," said Martin Werding, an employment expert at the IFO Institute for Economic Research in Munich said. "On that side there's been a regular decline." Government make-work programs in Germany, introduced over the last two years to subsidize part-time and temporary jobs, largely failed to dent the jobless statistics, he said.

Manpower, the world's biggest temporary staffing company, operates more than 1,130 agencies in France that place about two million people a year. Last year, revenue there was 4.5 billion euros ($5.4 billion), more than in the United States.

Like its competitors, including Adecco of Switzerland and Randstad of the Netherlands, Manpower is watching its market grow. Mr. Lemonnier says that if major economies like France and the Netherlands grow by 2 percent this year, the market for temporary workers could grow by 5 percent.

The proportion of part-time workers in the United States has been steady at about 13 percent for more than a decade, according to data compiled by the Organization for Economic Cooperation and Development in Paris. The number of Europe's temporary workers — people who may work a full week but can move from company to company — is soaring. In the decade from 1990 to 2000, Manpower tripled its business, Mr. Lemonnier said.

In France, Germany and Italy more than 12 percent of people working have temporary contracts. In Spain, the figure is more than 30 percent, and in the Netherlands 15 percent. Indeed, the percentage of Spanish workers in temporary and part-time jobs is so high that the government in Madrid proposed this week a new bill to cut the number of employees on temporary contracts. Legislation to become law in July should allow hundreds of thousands to upgrade to permanent contracts by giving companies incentives.

The large shift from a dozen years ago is not only in numbers but also in labor attitudes. For years, Europe prided itself on enforcing rigid job-protection laws, making it difficult for companies to hire and fire workers the way American companies could. Temporary job agencies, like Manpower, were belittled in France, where temporary work is still scorned as "precarious work"; in some countries, it was illegal.

Of course, the fast rate of job growth in the last five years is largely a result of dismal rates in the preceding years and pent-up appetite for hiring. Business leaders say the biggest obstacle to improving joblessness is the rigid workplace rules, which make it almost impossible to lay off permanent workers when business drops. In France, for instance, a company seeking to lay off workers has to make a case that would stand up in court that a business downturn directly made the jobs unnecessary.

Even then, they must pay the laid-off workers large packages of benefits. In many cases, companies opt to give workers early retirement rather than seek to lay them off. Students recently went on strike in Paris to protest government efforts to introduce more flexible hiring rules for first-time employment.

"It's a way for French business to counterbalance the rigidity of the French labor market," said Henri Lachmann, chairman of the Schneider electrical goods group, who is part of a business working group seeking to find ways to combat youth unemployment.

Without a radical loosening of hiring rules, major change in France is unlikely before the next national elections in May 2007, he said, adding, "One day or other it has to occur." Asked how many temporary workers Schneider employed, he replied: "Too many. It's a way to manage flexibly. It's a reply to French legal rigidity."

As they retire, many older workers have seen their jobs go from permanent employment to temporary work as their businesses cut expenses by scaling back permanent jobs to a small core. Typical of this was haute couture, a major industry in France but a seasonal one.

"In the beginning, it was all permanent employees," said Annie Coudret, a pattern cutter who has worked in haute couture dressmaking, for Chanel, Rochas and Lanvin, among others, for 23 years, and in recent years has had to temp. "Now, however, all the work is done with much temporary help and very few permanent employees."

Outside of France, the Netherlands has drawn widespread attention in recent years as a model for promoting workplace flexibility, including the expansion of part-time employment.

The Dutch government and the unions have encouraged part-time labor, with benefits comparable to those of full-time workers, and the proportion has jumped to almost 36 percent from 28 percent a decade earlier. The large majority of the part-time workers are women.

The Netherlands now has one of Europe's lowest unemployment rates, about 4.5 percent. Part-time workers also make up more than one-fifth the total work force in Germany, Britain, Ireland, Spain and Norway. In France, temporary workers typically receive pay and benefits comparable to those of full-time workers, but they do not have the job security. Indeed, because of a "precarious employment" bonus, their total package is worth about 110 percent that of ordinary employees. Part-time workers, in contrast, tend to be paid less and receive fewer benefits.

Marie Malherbe is someone who appreciates the benefits. Ms. Malherbe, 60, migrated to France from her native Greece when she was 21, and has been working in haute couture dressmaking almost ever since, for big names like Ungaro and Chanel. When Ungaro offered her a permanent job a few years back, she turned it down.

Permanent employees, she said, lose their edge. "It becomes a daily habit," she said. As for temping, she said, "In any case, if you're qualified, and have given proof that you are, if the employer is content and has confidence in you, it's really a good thing."

Still, the downside of this reshuffling of the labor market is the creation of a two-tier economy with older workers who have in effect lifetime jobs and younger workers on an employment carousel who move to new jobs at least once a year, like it or not.

Raymond Torres, a top labor economist at the O.E.C.D., said the only real solution to the problem of youth joblessness in the European countries was to begin loosening the entire straitjacket of employment regulations.

"The best way would be to reform the permanent labor contract," he said. Despite the loosening of temporary work restrictions, rigid job-protection laws for those with permanent jobs makes job hunting nearly impossible for those who have lost a job or are entering the job market for the first time.

"The more rigid the requirements are for a permanent contract, the more employers tend to recruit temporary workers," he said. "It's not just a social issue, it's a waste of human capital, a waste of productivity, and it divides the labor market."

Source: NY TimesGAI


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