France - Blairite policies in Socialist party wrapping

Jan/Feb 1998

Shortly after Labour's election victory in Britain, in June last year, the French Socialist party made an unexpected return to office, leading a so-called "plural coalition", which includes the Communist party and the Greens.

Since then, the British papers have often compared the policies of the two governments. And judging from these reports, one could be led to believe that, compared to Blair's anti-working class and pro-business "tough policies", the policy of the French prime minister Noel Jospin has real "socialist" undertones.

Of course, this impression only results from the British papers' determination - from the quasi-Blairite Guardian to the outright Tory Daily Mail - to support the idea that Labour's austerity policies represent ultimately the only possible option for workers and the unemployed in Britain. So that, by an ironic twist, any diversion from Blair's pro-business language must be portrayed as a lunatic return to a crisis-ridden past - even when it merely amounts to demagogy hiding the same fundamental orientation.

Tweedle-Noel and Tweedle-Tony

Thus, for instance, during the French truck drivers' strike last November, the British media reported what they described with horror as Jospin's "leniency" towards the strike. According to these reports, Jospin's support for the strike had "won" the strikers a "victory" against the transport bosses. Never mind the fact that only 6% of the truck drivers will get the £1000 per month minimum (the main demand of the strike), and only by the year 2000, whereas the remaining 94% will have to be content with an £815 per month minimum! Nor did the British papers bother to mention the fact that, on the other hand, every boss in the industry had been offered a tax rebate by Jospin... without having to give away anything in return!

More fundamental is the distorted image given by the press of Jospin's policies on wages and welfare. Early last October came reports of a summit on jobs and wages held in France by Jospin with the bosses and trade union leaders. Jospin, said the papers, had read the riot act to the employers, announcing a law which would force them to reduce the working week from 39 to 35 hours without loss of wages.

The entire press immediately denounced Jospin as an "old Labour" dinosaur and gleefully predicted the downfall of the French economy, crippled by high labour costs and industrial unrest. The reader was obviously meant to contrast the doom and gloom of the situation in France with Blair's "flexible labour market" which would soon propel Britain to the first rank not just of the European Union, but of the entire world. Although business papers like the Financial Times were more cautious, both on the alleged "socialism" of the future 35-hour law and on Britain's impending affluence, limiting their predictions to that of an imminent showdown between Jospin and the French equivalent of the CBI, the CNPF.

All this rhetoric was then reinforced by a warning issued by the OECD's authoritative "experts", and reproduced by all British papers, predicting a sharp increase in unemployment in France, as employers would be unable to afford the cost of this 35-hour law. Although, one may wonder whether these were the same "experts" who, more or less at the same time, were predicting that world economic growth would increase in 1998, due in particular to the "buoyancy" of the south east Asian "emerging markets"...

In reality, all these reports are pure nonsense, if not deliberate lies. The truth is that Jospin is just as committed as Blair is, to the interests and wishes of the capitalist class.

Of course, given his huge parliamentary majority and the sense of impotence created by nearly two decades of austerity experienced by the working class, Blair feels safe to state clearly what he intends to do. At least he does for the time being. But should the working class begin to resist his attacks on any sort of scale, Blair's language would no doubt revert to some form of "old Labour" rhetoric - although his aims would remain unchanged, of course.

Jospin, on the other hand, can only rely on a slim parliamentary majority. His success in the election owed more to the rivalries between the various right and far-right parties, than to the support he really enjoys in the country. So he has to manoeuvre. On the one hand he has to make a show of his commitment to the rich and implement their wishes. While, on the other, he has to try to sustain his support among the left electorate by giving the impression that he will do something for the workers and the unemployed and that the bosses will be made to foot part of the bill - even though he has no such intentions.

The packaging may be different but not the aim, which is to impose the same "labour flexibility" that the bosses are crying for on both sides of the Channel. And as to the real content of Jospin's "socialist" social policy, in the government's alleged "fight against unemployment", it is no different from that of Blair.

"Welfare to work" with French dressing

In fact Jospin's first weeks in office were marked by a series of gestures addressed to the bosses and the right-wing electorate, designed to reassure them as to its future plans. Among these was, for instance, his high-profile refusal to intervene in the closure of the Renault Vilvoorde plant in Belgium, even though Renault is still a state-owned company and the coalition parties had opposed the plant's closure while they were still in opposition.

Having made these gestures, Jospin had more elbow room to use language which was more consistent with his "left" label. So, for instance, in September, the issue of job creation was put on the agenda in the form of a "youth- employment" plan, which is comparable to Labour's "welfare to work" plans for the under-25s.

Long before the election, in December 1996, the Socialist party had promised to create 700,000 jobs within two years of getting into office. But at the time, of course, no-one thought that president Chirac was going to dissolve parliament and call a general election so early.

During the May 1997 election campaign began, although the SP still talked about creating 700,000 jobs, the date by which it pledged to achieve this was already much vaguer. But since Jospin has been in power, he seems to have been struck by amnesia - the issue of the time scale has disappeared. It would seem that, although this has never been said clearly, Jospin intends to create these jobs sometime within the life of the present parliament, that is by 2002!

But in addition, the target will be reduced in numbers too. Indeed, 350,000 - or half of the jobs promised - should be created either by the government itself or thanks to direct government subsidies. Some of these jobs will be created in the civil service (but without the accompanying rights of civil servants), others in local government and state-controlled companies, and still others in local associations which are partly state-funded (such as community centres, etc..). According to official plans so far, wages will be at least the minimum wage (£660 gross per month). The state will pay the entire wage whenever it is the direct employer and 80% of it in every other case. Employment will be for five years, but to be renewed annually.

Limited as it is, this "youth-employment" scheme may prove to be an improvement, in that those taken on will have a relatively stable job and regular, though low, wages. For some, it may even offer a chance to get a permanent job eventually. At least, this is how one can look at it.

On the other hand, the scheme must be assessed not just from the point of view of those individuals who will benefit from it, but also relative to the scale of the problem of unemployment, which it is meant to address. And from this point of view, a total 350,000 jobs created over five years - assuming they are really created, which remains to be seen - will be a mere drop in the ocean, compared to the million unemployed youth shown by official figures today, and the many more who will join them in the next five years as they reach working age.

Besides, this leaves out many more unemployed who are not classified as youth. As if unemployment could be resolved for one category or age group among the unemployed independently from the others. As if the problem was statistical rather than social. As if it was more acceptable to be unemployed for the 30-40 group age than for the under-25s. This is a delusion!

This scheme is also a delusion from another point of view, in that it pretends to create jobs while ignoring the jobs which are still being cut. Jospin's ministers said that the "youth- employment" scheme will not reduce unemployment before the end of 1998. Why is that? Simply because while the government will be creating jobs - but not enough to reduce unemployment, anyway - it will be doing nothing to stop the bosses from cutting more jobs than they will create.

What will then happen after 1998? No-one really knows, neither the so-called "experts" nor Jospin's ministers, because outside this limited scheme, they have no control whatsoever over the factors which will really determine the evolution of employment - that is, partly the economic situation, but primarily the choices made by the employers, on whom Jospin does not want to impose any constraints.

On the contrary, for the second half of the 700,000 jobs he promised, Jospin has called on the bosses' goodwill - as if the bosses' choices were dictated by their goodwill! Of course, on the whole, the employers' political allegiances and ideological leanings certainly do not make them particularly keen to oblige a so-called "left" government. But this is not the decisive factor, since, on this account, they haven't been more zealous in helping the previous right-wing governments to boost their electoral support by improving their record on unemployment.

The only decisive factor is whether the bosses will consider that helping Jospin to create the remaining 350,000 jobs fits in with their interests. Why would they do it, if they can do otherwise? Except, maybe, if Jospin offered them even more subsidies. But even then, there would still be no guarantee that these jobs will actually be created - it would not be the first time that a government (whether left-wing or right-wing) bribes the bosses with large subsidies under the pretext of creating jobs and... gets nothing in return.

The planned 35-hour (... or more!) law

Jospin presents his plans for a 35-hour law (down from the present legal 39-hour week) to the working class along similar lines. He pretends to he concerned with the interests of those workers who are in a job, of course, but also the interests of those who are looking for a job, since the proclaimed objective of this law is to reduce unemployment. But again this is nothing but delusion.

In reality, the planned 35-hour law will only be implemented by the year 2000. It will only apply to the private sector, thereby leaving the government every possibility to make budget savings, or prepare public companies for privatisation, by cutting jobs. Moreover, it will only apply to those private companies with more than 20 employees. Altogether, taking these exceptions into account, together with part-timers and managerial grades who will not be affected either, the 35-hour law will only concern about one third of all French waged workers!

In fact, this law will not even mean an improvement for those workers, rather the reverse. And not only will it cost the bosses nothing, it even stands to most profitable for them!

In this field as in many others, the Socialist party uses two very different languages. One is designed to spread illusions among their working class electorate - although this is primarily left to the SP's junior partners in government, the Communist party and the Greens. The SP's other language is aimed at the bosses, to convince them that they have nothing to fear from the future law.

On this issue, Martine Aubry, the Employment minister (a member of the Socialist party who has also a long record as managing director of one of France's largest companies) has been addressing employers' meetings up and down the country. She explained that companies stand to lose nothing under the future law, since they will be able to keep the working arrangements they have, if they wish to do so, without even having to apply for an official exemption from the law (such exemptions are still normal practice today in most industries). Their only constraint will be to pay the standard overtime rate (125% at the present time) for hours beyond the legal 35-hour week.

So, for instance, if a company wants to keep its present 39-hour working pattern, it will only have to increase the workers' wages by the equivalent of one hour's pay, or 2.6%! The bosses, therefore, won't be threatened with bankruptcy, even less so as there is no guarantee that the overtime rate remains at its present 125% level: as is stated in the documents published by the Jospin's government with the draft law, this rate could be reduced, should it be required by the situation.

Besides, the planned law will not mean either that workers will necessarily retain the wages they earned for 39 hours, should their working week be effectively cut to 35 hours. In an answer to the bosses' whining on this matter (or rather crying wolf because they know very well what the position is), Jospin himself stressed in September: "The slogan of a 35- hour week paid at a 39-hour rate is not ours". This "ours" includes the Socialist party, of course, but also the other components of the "plural majority", none of whom have protested against this statement.

Indeed, behind this issue of pay, there is a sleight of hand. Before and after forming the government, the Socialist party said that they were in favour of phasing in a reduction of the working week to 35 hours, and they did add: "without loss of pay". However, they never said clearly how the retention of previous pay levels will be calculated. Indeed, the fact that the working week is legally reduced to 35 hours does not necessarily imply that what will be preserved of today's wages will be compulsorily tied to the number of hours worked. Therefore, the shift to the 35-hour week may very well involve, for instance, a transitional bonus (possibly a temporary one) representing four hours' pay, for those workers whose working week is thus reduced, while new entrants are paid on a 35-hour basis on the previous hourly rate. That is, provided the formula "without loss of pay" does not turn out to mean "without loss of pay on the hourly rate"!

The bosses cry wolf

In other words, whichever way the bosses want to play it, whether they keep the old weekly pattern or actually opt for a 35- hour week, their wage bill will eventually be increased, at most, by only a few percent. But in fact, they won't even have to pay this amount.

Indeed, as has been stressed repeatedly by Martine Aubry, the draft law does say that in return the bosses will be offered financial incentives - which will be paid... on the National Insurance budget, despite its ever-growing deficit.

Even before the entire law is even adopted, starting from January this year any company will be able to receive a yearly subsidy of £900 per employee, provided it cuts working hours by 10% while increasing the numbers on its payroll by 6%.

In the case of a company with one thousand employees, currently operating a standard 39-hour week, for instance, cutting the working week by just under four hours and recruiting another 60 employees, would entitle it to an annual subsidy of £954,000. And yet, if the company did not cut its output, which it would be unlikely to do, despite fewer hours being worked in total, this would entail imposing an increase in productivity, on the workforce, of 5%!

In exchange for the government subsidy, this company will not be allowed to cut jobs for two years. But beyond this time, it will retain the subsidy for the duration of the scheme although on a lower rate of no less than £424,000 per annum - and this, even if it cuts its workforce after the initial two-year period. Besides, there are provisions in the law which will allow the company to get additional subsidies in case it increases the workforce over and above the 1,060 level, or on the contrary if it can prove it needs more subsidies in order to avoid cutting jobs - something that the bosses are always very skilled at proving, and ministers usually very willing to understand.

From this, one can measure how hard Jospin's advisers have been working at designing a package that would meet every one of the bosses' wishes, including the most secret ones. Jospin is even offering the bosses an unusual procedure for this law, which will give them a second chance to write even more of their wishes into it: while the present draft will be put to Parliament early this year, there will be a second vote at the end of 1999, to allow amendments taking into account both the experience of the first two years of operation and the constraints of the situation by then.

None of these thoughtful touches of concern for the bosses' welfare prevents them from protesting, complaining and accusing the government of threatening the entire country with bankruptcy. The CNPF president went so far as to resign from his seat to avoid having to discuss the draft of the 35-hour law with Jospin. His successor, an heir of one of France's oldest industrial families, stood on a programme of strident opposition to this law. It seems that the more concessions Jospin makes, the more the bosses cry wolf. Not because they have any reason to do so, but because, since 1981, their own experience has shown them that they can always try it on with a left-wing government for more: and not only do they always get away with trying, but they usually manage to gain out of it.

On the other hand, Jospin has no reason to fear the vocal opposition of the bosses' organisations - since he knows full well what a profitable package he is offering them - nor to be embarrassed by it. On the contrary, this farce of opposition has very useful side effects for the Socialist party. The fact that the bosses are complaining so loudly creates the impression that, despite its real content, the 35-hour law must be directed against them, after all. As a result Jospin can hope that some workers will be fooled into believing that, somehow, they may have something to gain out of this law.

A trap and a weapon against the working class

The Socialist party and their partners in the "plural majority" have the nerve to claim that this law can help to fight unemployment. This is just another lie on their part. To create jobs, this allegedly "left-wing" government is resorting to the old trick of combining financial incentives for the bosses with regulations - or rather, deregulation in this particular case.

But if financial incentives to the capitalists could work, they would have done so long ago, ever since such state subsidies for job creation were first introduced in France. On the contrary, not only have these subsidies failed completely to prevent the rise of unemployment over the past decade, but there is by now a long list of such subsidies, which are often still being handed out despite never having created any jobs. And yet, there is no question of Jospin putting an end to this parasitic milking of state funds by the bosses. On the contrary, Jospin's 35-hour law is proposing to help the parasites grow even fatter.

As to the reasoning which says that cutting the number of hours worked by each worker would make it possible to share the existing work between a larger number of workers, it is at best mistaken and at worst a lie.

First of all, of course, this law does not even ensure that all workers will work fewer hours: not only will there be no compulsion on the bosses to abide by a strict 35-hour week, but they will have even fewer constraints than today in terms of the actual hours they can demand from their workforce (because this law would result in cancelling existing regulations).

But even if this law did ensure that all workers worked fewer hours, it would still not guarantee a growth in employment. Indeed, this law also introduces a change in the employment legislation, which the bosses have been demanding for a long time - a change which, by the way, was already imposed on the workforce at Peugeot's Ryton plant in Britain, last summer. Instead of the actual hours worked being taken into account week by week, they will be calculated as an average over the year. So that, for instance, while the average week worked would be 35 hours long, the real working week could be 45 hours during peak production times, 25 hours when demand is low, and somewhere between the two for the rest of the year, depending on the needs of the employer. Not only does this create havoc in workers' lives, it also means much worse conditions in every respect when the hours increase, and the loss of any overtime payments over and above the average working week.

In other words, the 35-hour law may well result only in increased productivity and more efficient use of manpower, machinery and facilities, thereby making it possible for the bosses to produce more with the same numbers of workers as today, if not fewer. So, while not creating any jobs, this law will be used by the bosses as a Trojan horse to introduce the "labour flexibility" they have been after for so long, to boost their profits. And this "flexibility" will mean that employers will no longer need to take on agency or short-term contract workers to meet surges in production - they will only have to increase the working hours of their permanent workforce - thereby effectively cutting a number of casual jobs.

The real obstacle to job creation lies in the fact that employers, and they alone, decide whether to create or cut jobs. And they can be trusted to use the 35-hour law, its intentional provisions and its loopholes, to keep their wage bills as low as possible, which means keeping their workforce as small as possible.

Only two factors could force employers to create substantial numbers of jobs. One would be a sharp recovery in the world economy, something which neither Jospin (or any government for that matter) nor the French working class can produce. But even then, the bosses would still wait as long as they possibly can before increasing the scale of their production, so as to be absolutely sure that it is in their interest. And by the time they begin doing it, the recovery may well be over, being after all no more than a respite between two recessions!

The other factor, which could force the bosses to create jobs, would be a social pressure so powerful that they would have to choose to give in rather than risk an escalating confrontation. But only a radical mobilisation of the working class on a very large scale would be able to exercise such a pressure - and this is definitely the last thing that Jospin and his allies in government would want.