To Reduce Unemployment, French President Macron Reforms the Labour Market

Published 29 Jan 2018
Reference 6361
Region Europe
Length 11 page(s)
Language English

The case examines the reforms to the French labour code made by President Emmanuel Macron after his election in April 2017, essentially designed to loosen restrictions on hiring and firing. The new laws gave smaller companies more flexibility in negotiating wages and conditions directly with employees (rather than being bound by industry-wide collective deals negotiated by trade unions) and the right to lay off workers in periods of economic difficulty. In the context of an upturn, Macron was hoping the reforms would encourage foreign investment such as financial institutions relocating in response to Brexit. He resorted to issuing executive decrees (ordonnances) to avoid the massive street protests typically sparked by macro-economic adjustments in France, ultimately consolidating his leadership at home and in the larger European Union.

Teaching objectives

The case is ideal for economic and political science instructors for a discussion of labour reform in a country reputed for rigid regulations, highlighting the role of the executive in pushing through macro-economic changes after decades of stubbornly high unemployment. At the regional level, Macron has shifted the balance of power in the European Union by aligning himself with the German Chancellor both in approach and level of influence, in a combined effort to strengthen the European bloc in the face of Brexit and the rise of populist movements in Austria, Poland and Hungary.

  • Emmanuel Macron
  • labour reforms
  • Thomas Piketty
  • Jean Tirole
  • Eric Cohen
  • Judith Krivine
  • Myriam El Khomri
  • French economy
  • flexicurity
  • Francois Hollande
  • prud’hommes
  • unemployment
  • trade unions
  • negotiations
  • Q21718