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Government Job Protection Regulations Reduce Youth Jobs



EuropeYouthUnemploymentGraph2013-01-01.jpg










Source of graph: online version of the WSJ article quoted and cited below.




(p. A7) Socialist President François Hollande has come up with a plan to ease the problem: give €4,000 ($5,276) a year for three years to small companies that hire a young person on a permanent contract while committing to keep an employee age 57 or over.


. . .


The French government hopes as many as half a million youths will find permanent jobs over the next five years due to the measure, which could cost the government about €1 billion a year when it is in place.

Economists say the number of real new jobs is likely to be much lower because the government will be subsidizing jobs that would have been created anyway. Only around 100,000 new jobs will be created, according to OFCE, an economic-research think tank in Paris.

French companies say they are reluctant to hire young people on permanent contracts because it gives employees a level of protection the companies say they can't afford to grant--even if they get the subsidy proposed by Mr. Hollande.

"It's great to have €4,000, but if the new recruit isn't good, we don't know how long we'll be stuck with them," said Philippe Lehmann, who runs Lehmann Sarl, a mechanical-parts factory in Molsheim, eastern France that employs seven people.




For the full story, see:

WILLIAM HOROBIN. "France Pins Hopes on Youth Jobs Plan." The Wall Street Journal (Mon., December 24, 2012): A7.

(Note: ellipsis added.)

(Note: the online version of the story has the date December 23, 2012.)

(Note: the online version of the last two paragraphs quoted above contains a few extra words of elaboration at the end of each paragraph, as compared to the print version. I have underlined these words in the passages quoted above.)






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