The Social Network

Different countries, different styles.  Today the new French administration has begun what they claim to be a new collaborative style of formulating social policy (by “social” we are adopting the French use of the word, to refer to all aspects of employment and industrial policy).  The Prime Minister and a cohort of senior Ministers are receiving, one by one, each of the heads of the eight major employees’ and employers’ unions today as the first stage of preparing the Social Sumit this July.

But is this apparently collaborative approach a welcome break from the past, or reinforcing the critcism of the Socialists that they are remote from the world of business?According to most figures, around 7 or 8% of the French workforce is a member of a trade union.  This surprisingly low figure (comparable figures give the US, Canada, the UK, Japan and even Germany figures between 20 and 30%) is a testament to the increasing remoteness of the world of trade unions from the reality of day to day business in France.  That is not unusual in modern Western economies – in the comparable countries mentioned above, unions tend to be concentrated in heavy industry, historic monopolies or the public sector.  A scewed view of the world of work is bound to be the result of a membership that does not span all parts of the workforce.  Perhaps the unions in the US have the best overview, with powerful service sector unions such as the SEIU.

In France, the five historic trades union, which up until a 2008 reform were protected against new entrants in professional elections, largely represent manufacturing workers and public sector workers (and even then their presence on the ground is largely sporadic.

On the employer side, the overarching federation, Medef, has in recent years been improving its position, with an effective communicator in charge, Laurence Parisot, and a concern for supporting smaller businesses and entrepreneurs.

However the key difference in France is that the employers’ and employees’ unions don’t simply lobby and represent.  Their influence does not even stop at collective bargaining – they effectively run, autonomously, vast swathes of social policy.  They are in charge of the unemployment insurance system, a bulk of the state pension system, much of the professional training budget and much more.  They are of course financially compensated by the state for providing these services.

Previous governments have often been content to rubber stamp the results of negotiations between the unions – negotiations that were often opaque, secretive and difficult to fathom once the result is produced.  Recent agreements on equality between the sexes and the use of interns are good example of texts that produce little that is practical or practicable for private businesses.

The check on this monopolisation of public policy by two interested should be effective oversight by a government with the wider public interest in mind.  However, previous governments have lacked the point of view of businesses and entrepreneurs in making that judgment.  French government ministers (with some exceptions, particularly in Jacques Chirac’s first government of his second term in 2002) are much more likely to be career politicians who have little or no experience of private business and therefore are quick to get stuck in the duopoloy of the debate between the unions.  Michel Sapin, Employment Minister, and Arnaud Montebourg, Productive Recovery Minister (yes, really), are perfect examples.  This is not necessarily a Socialist problem, but the current government is a stark example, containing as it does not a single former business leader.

The Social Summit must ensure that, even though the odds are clearly stacked against it, it doesn’t fall into the same trap of assuming that the only solutions to problems are those that are put forward by each union bloc.  The inclusion of the SME employers’ union is a positive step, the CGPME.  It often takes a novel stance on issues, with its privileged proximity to workers and entrepreneurs, unmatched by any other union, employer or employee.

Running a government is not like running a business, and the latter should not be an automatic requisitie for the former (despite what Mitt Romney might say).  But an understanding of how a large chunk of the economy deals with the consequences of governments’ actions on a day to day basis is crucial.

The President gives his first interview tonight on national television since his election.  Let’s see what he says about the first day’s real work for the new government.

And a hat tip to the Huffington Post’s French edition today for pinching my headline…

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One thought on “The Social Network

  1. Pingback: Working the System | Your Critical Friend

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