Wednesday, September 5, 2012

Intergenerational Contracts

With French unemployment hitting levels not seen since 1999, the government is accelerating its announcements of countermeasures. Today we have the contrat de génération, or intergenerational contract, which promises to give money to firms to subsidize the employment of older workers who will attempt to pass on their knowhow to the younger hires who will eventually replace them.

I find myself unable to muster much enthusiasm for this plan. While the notion of apprenticeship may appeal to the tradition-minded, and the idea of passing on tacit knowledge and "feel" acquired in long years on the job may seem the soul of wisdom, I can't help feeling skeptical that this simplified image of the contemporary work process corresponds to reality in many industries. One of today's primary competitive challenges is the rapidity of technological change. Work flow in many industries undergoes constant transformation and adaptation to shifting global supply chains. Skills that older workers acquired over long careers may no longer be relevant, and the kind of training that younger workers need may be best imparted in ways other than through direct contact with older workers nearing retirement. There is something artificial and abstract about the whole notion of the intergenerational contract. Its inception probably owes less to the needs of industry and more to the need of government to find work for young people while keeping older workers employed longer and therefore contributing longer to the pension funds that must sustain them in old age. Perhaps it will work, but I wonder how much of the expected €2.5 billion a year to be invested in this plan will actually be squandered.

1 comment:

Anonymous said...

Aren't you ignoring the value added luxury and handcrafts sectors? France has a long and vibrant Compagnons tradition. There are small highly skilled studios handmaking concert violin bows at 7,000 euros a throw, for instance.