Outsourcing: the difference between the US and France

jay gw

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Interestingly, in France outsourcing is not banned, but you cannot lay off workers because you've outsourced their jobs. By contrast, in the US that's precisely the reason for doing it.

Currently France's unemployment is 10 percent, the US is 5 percent, but people not registering with the government are not included, adding another 2-4 percent to that. The two countries rates are apart by about 2 percent.

If companies do much better after outsourcing because they're saving money from lower labor costs, then why is France's economy not suffering due to worker protection laws?


Some info on the French economy:

http://www.fsu.edu/~modlang/french/business/economy.html
 
You're right, jay gw. If someone chooses to hire Americans ever, they should be saddled with that decision into perpetuity. In fact, if the last car you bought was American, I think you should be forced to buy an American car next time too. I'm sure there are some people who will simply not buy American the first time in order to not be locked in, but hey, those Americans who built your last car still need to be employed!
 
France's economy IS suffering because of worker protection laws.
 
Here are some international comparisons made by the US BLS. They correct for differences in reporting, and show the US and France being apart by around 5%.
 
aerocontrols said:
Here are some international comparisons made by the US BLS. They correct for differences in reporting, and show the US and France being apart by around 5%.
Click to expand...

It also shows that the US is about as low as possible. I heard on several occasions that unemployment much below 5% is unusual due to the dynamics of a changing workforce -- moving, layoffs, change of jobs, etc. So basically, a 5% unemployment number is essentially full employment.
 
Just thinking said:
It also shows that the US is about as low as possible. I heard on several occasions that unemployment much below 5% is unusual due to the dynamics of a changing workforce -- moving, layoffs, change of jobs, etc. So basically, a 5% unemployment number is essentially full employment.
Click to expand...

We had (slightly) lower unemployment in the late 90s. We also had a worker shortage, which is, of course, good for workers.

Historically, I believe 5% unemployment has been considered full employment.
 
aerocontrols said:
We had (slightly) lower unemployment in the late 90s. We also had a worker shortage, which is, of course, good for workers.
Click to expand...

I should say that a worker shortage is good for workers in the short run, and good for them in the long run only if they understand that the shortage won't last forever, and afterwards many of them will be laid off and many even who are not laid off will be forced to take lower salaries.
 
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