Friday, October 26, 2007

French Unions

French labor relations are indeed peculiar. The rate of unionization is extremely low, under 8 percent. The frequency of strikes has been diminishing steadily. Yet workers have every reason to be unhappy. Wage compression in France is also extreme. The ratio between the wages of the first and fifth income deciles is significantly lower than in most other industrial countries. In other words, wages are unusually concentrated at the low end of the scale. Compensating somewhat for this is a relatively high minimum wage (SMIC).

Might France's skewed wage structure have something to do with its system of labor relations? A Le Monde op-ed today raises the question of occult financing of the unions by employers. Denis Gautier-Sauvagnac has admitted the existence of a secret slush fund at UIMM, to be used for "lubricating social relations." Yves Gattaz, former head of UIMM, has said that the system has a long history. Laurence Parisot, the head of the MEDEF, has spoken of the revelation of "family secrets." The Hadas-Lebel Report documents the opacity of union financing. The question thus arises: What are employers getting for their money (the sums involved at UIMM appear to be colossal)? Might the answer be wage compression?


Anonymous said...

But here's the thing: while its true the a)French wages are compressed at the low end of the scale, and that b) the rate of unionization is low, and that c) the employers fund union activities in various ways, it is not true that there is a causal link between a-b and c. First, membership is low because of the combination of low incentives to join -- everybody gets the same wage scale and benefits because they are bargained by all the unions on behalf of all the workers in a given sector and company -- and because of effective anti-union activity on the part of French employers. Second, unions are financed in various ways by employers in many countries, and this is usually a symptom of strong unions, not weak unions. The Nordic countries come to mind. Or the UAW in the US in its heyday could force GM to give paid time off to union stewards to deal with union affairs. Third, the French unions do display a fair amount of shop floor militancy and, of course, are prone to large strikes on issues of national importance, so the argument that employers might be paying for docile labor unions seems a bit stretched to me. Rather, I think the low wages are simply due to the relatively low union density.
The real challenge for the French unions is twofold: a) reform the outdated sytem of "representativite" which allows unions which barely exist, like the CFTC, to have a significant weight in bargaining; and b) to figure out how to grow their membership. The CFDT is probably the furthest along in this regard, with the CGT close on its heels. But traditionally they have wanted the workers to come to them. Now they have to go organize the workers.

Anonymous said...

The fact that wages are low in France has a lot to do with the 35 hours working week. There has been a trade off, unwillingly but real, between free time and salary increase. In fact, salaries have been all but frozen.

The unusual high percentage of workers receiving the SMIC, or minimum legal wage, is mostly due to the exoneration of social charges granted to employers for employing unskilled labor.And these charges can be very high, about 50% of the nominal salary. The original idea was of course to help the unskilled to be " employable". The result of this generous idea has been to trap more and more people into this SMIC. If they go over this salary level, the exonaration is lost for the employer and the labor cost becomes prohibitive.

As for the unions, you have to keep in mind the profound marxist impregnation of the French social scene, which goes well beyond CGT. Where else would find unions such as CGT ( Communist inspired ) SUD ( heavily trotskist ) and , to some extent, FO?

Therefore they tend to favor class confrontation to compromise, contrary to what happens with european social democrat unions.

Furthermore, unions in Germany or in Scandinavian countries offer real additional services to their members, well beyond the usual reprentation.
None of this exists in France where there is really no incentive for the worker to join an union,apart from the militancy aspect.

Unknown said...

Thanks for your comments. I think you're probably right. Much about the system remains murky, however. I hope that the investigation of UIMM sheds some light.

gregory brown said...

In an interview I heard today (though it was recorded last week) Chereque disputed that CFDT receives any sort of payments not reported in its published budget and suggested that the MEDEF had launched this story to try to undermine support of union leadership by the workers.

Anonymous said...

The point is that the unions, according to a 1884 law, do not have to publish a budget, except for the part concerning public money received from the government.
This has to change of course.

As for the MEDEF conspiracy theory to undermine the unions, quite an expensive one at 600 million euros !