A lesson from France

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A lesson from France

France’s powerful railworkers’ unions kicked off a partial strike for three months from Tuesday. As a result, commuters are experiencing unfathomable inconveniences across the country. The strike threatens to cause an unparalleled transportation crisis in France. But President Emmanuel Macron declared war on the unions, one of the most militant labor groups in Europe. “I will deal with them with strong determination,” he said on Wednesday.

Macron was able to make that declaration based on a national consensus that fundamental reform is needed to boost France’s competitiveness, which has been declining due to radical labor movements and chronic strikes. Overly generous welfare programs and pro-labor policies have been rampant in France for the last 30 years.

That populist approach has backfired. The French government was not able to lower soaring unemployment rates despite one stimulus package after another. Macron’s election victory in May, despite his lack of a political background, reflected a public desire to fix the “French disease” once and for all.

To meet voters’ expectations, Macron helped change France a lot in less than a year. His first step was labor reform aimed at improving labor market flexibility. The general strikes by the railway unions were triggered by Macron’s move to put an end to France’s lifetime-employment system.

Macron’s second step involves aggressive policies to revitalize ailing French companies, including a sharp cut in corporate tax. Thanks to his business-friendly policies, the country attracted large investments from Samsung Electronics, Toyota, Google, Facebook and others, which helped create a total of 33,493 quality jobs in France. That’s why Macron is so devoted to reforms.

The Moon Jae-in administration is going in the opposite direction. His push for rapid hikes in the minimum wage caused business owners to lay off employees. Even though his administration is trying to mitigate such unwanted effects by changing the way our minimum wage is calculated, the effort will most likely go down the drain in the face of vehement opposition from militant unions in our industries.

The Moon administration is not even willing to arrest a number of union leaders on the wanted list for violent activities. The government’s lenience toward labor unions is contributing to rising jobless rates among the young generation and declining consumption. We hope Moon takes a cue from Macron’s labor reforms.

JoongAng Ilbo, April 5, Page 30
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