New Government faced with differing priorities from unions and employers

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One of the first acts by the new French Prime Minister following his election in June 1997 was to consult with employers and unions prior to announcing his legislative programme. This move was greeted favourably by both employers and trade unions, though their aims are quite different. A national conference on pay, employment and working time is to be held in the autumn.

There are large matters awaiting the attention of the new left-wing government headed by Lionel Jospin, which came to power in June 1997, not least of which is that of employment. The Prime Minister has made this the keystone of the success of European construction - in the run-up to the Amsterdam European Council meeting (EU9706133N) - and of the rebuilding of France's social situation This idea was at the centre of the Socialist Party's election campaign, with the commitments to: the creation of 700,000 new jobs for young people (350,000 in the public sector and 350,000 in private companies); progressively cutting the statutory working week from 39 to 35 hours without the loss of salary; and stimulating growth by encouraging consumption. At the same time, in an attempt to involve the main unions and employers' organisations, the new Government has undertaken to set up "an annual national conference on pay, employment and working time", the organisation of which has not yet been clearly defined.

Lionel Jospin was due to give his inauguration speech in Parliament on 19 June, in which he was expected to outline his policies. Beforehand, he wished to meet with trade unions and employers' associations individually on 11 and 12 June in order to become acquainted with their stances and priorities for the duration of his term in office, and to obtain their opinion on a more pressing matter; that of the increase in the statutory Minimum Wage (Guaranteed) (salaire minimum interprofessionnel de croissance, SMIC) which is revised every year on 1 July. These meetings took the form of consultations, with the Prime Minister making no commitments to any of the representatives he met with. It must be said that the latter have priorities which are far from homogeneous.

Unions in disarray

The priorities of the CGT (Confédération générale du travail) trade union confederation include the cancellation of mass redundancy programmes currently on the cards, the setting up of "an appeal system against redundancies" and an increase in the minimum wage. Louis Viannet, the general secretary of the CGT stated that he wanted to see more than a mere "kick start". According to Mr Viannet: "Solid measures must be taken with regard to the SMIC and minimum welfare benefits (...) The Balladur and Juppé Governments have introduced social security exemptions on the SMIC, which have weighty implications which go way beyond mere salary increases. If we want the SMIC to be a stimulant in company wage policy, these exemptions need to be reviewed ." (Le Monde, 7 June 1997).

Nicole Notat, general secretary of the CFDT (Confédération française démocratique du travail) holds the same opinion with regard to exemptions from social security contributions. She is, however, more prudent on the question of an increase in the minimum wage. "An increase in the SMIC in present conditions, evidently yes!" she stated, adding, however, that "when the SMIC is increased, so is the number of minimum-wage earners" (Libération, 6 June 1997). During her meeting with the Prime Minister, she stressed: "I do not expect to see a lower increase than the 4% granted in 1995, which was accompanied in the same year by a further increase in the buying power of minimum-wage earners when they saw part of their health contributions transferred to the CSG tax ". (The CSG is a general social contribution which finances in part the welfare system, and which is levied on all revenues and not only salaries and companies). As for the duration of working time, the CFDT - which is in favour of the target of a 32-hour week - remains "on its guard with regard to the conditions under which the 35-hour week could be implemented", Nicole Notat added. "I would not want to see a limit set at 35 hours. Experience has taught us that the decrease from 40 to 39 hours did not create a single job". She fears that a cut from 39 to 35 hours under the same conditions might have the same effect, and would like to see "some freedom for negotiation between unions and employers."

The general secretary of the CGT-FO (Confédération générale du travail-Force Ouvrière) requested that the Prime Minister raise the minimum wage by between FRF 400 and FRF 500 per month, while at the same time considering that "we cannot ignore the difficulties this would create since the SMIC is a point of reference for a whole range of social security contribution exemptions. What is of most importance to me is that the Government call for the restarting of sectoral negotiations on minimum pay rates. I want to see a long-term wage policy and an increase in the SMIC must not be perceived as merely a vote of thanks to the electorate. That would be the worst possible thing." (Les Echos, 4 June 1997). With regard to the other matters at hand, the CGT-FO wants the social security reform programme adopted by the former Government to be re-examined, while the CFDT wants the present undertakings to be continued.

As for the CFTC (Confédération française des travailleurs chrétiens), it has requested a monthly increase in the minimum wage of FRF 700.

Employers' views

Employers would like to see a decrease in social security contributions, in compensation for the increase in the minimum wage. The president of the CNPF (Conseil national du patronat français), Jean Gandois, who also met with the Prime Minister, stated that he "did not support the freezing of salaries but overall employment costs, including social security contributions, should not increase in real terms" (La Tribune, 13 June 1997).

The CGPME (Confédération générale des petites et moyennes entreprises), representing small and medium-sized firms, is worried by a series of measures announced during the election campaign. Over and above the increase in the minimum wage (which affects 13 times more people in small and medium-sized companies than in larger ones), it is just as fearful of the possibility that the Government might reinstitute the obligation for companies to obtain government authorisation for mass redundancy programmes and of the promise by the Socialists to cut the working week from 39 to 35 hours without any loss in earnings.


The new Government will have to face demands from unions and employers of an extremely different nature. Spokespersons for the Socialist Party have stated that they wish to uphold the promises made during the election campaign. For Lionel Jospin, the social stakes are decisive: he will have to meet the contradictory demands of the unions and at the same time avoid provoking any hostile reaction from employers.

The first "national conference", which is scheduled for September, will probably allow Mr Jospin to propose compromises or reach a wider consensus of opinion. That is, unless major industrial conflicts arise in certain sectors where redundancies are likely - as, for example, at Renault, Peugeot or Electrolux- and worsen a social climate which the election did nothing to improve. The Government is well aware that it cannot count on a long "honeymoon" period. (Alexandre Bilous, IRES)

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