In France .
The heavy regulation of labor market prevents market mechanisms to lead an equilibrium – so that there was no other than frictionalunemployment. Inappropriate regulation significantly prevents the transfer of labor from declining to expanding sectors. especially, mechanisms for setting wages , prevent the relative wage changes,which send the signals required for proper allocation of resources, labor force, and should enable each individual to find a job
Difficulties to dismiss
In an uncertain world, it is clear that acompany can dismiss only with difficulty or penalties will be reluctant to create jobs. It is preferable not to increase its business or replace jobs with machines, or even outsource its manufacturing andorder abroad.Excessively protect those who have jobs back to prevent those who do not find one. The presence of high firing costs, however, strengthens the bargaining power of those who have stableemployment. They also get a high salary, which prevents those on the key out of poverty. The labor market is dual, with one hand, those who benefit from a protected position and on the other hand, themass of unemployed and precarious workers
If excessive protection of jobs is increasing unemployment, especially unemployment it creates long-term
Un coût du travail excessif : SMIC et chargessociales
A company hires only when an employee brings in more than it costs. With a minimum wage and high social costs , many potential recruits do not update.
A lot of people are unemployedbecause of the combinaison of the minimum wage and the French tax system. people who have jobs have advantages of the system, but because of this, unemployed people, especially women some younggraduates, immigrants, the elderly and unemployed are exclued.With rising wages due to seniority (often quasi-automatic) and the reduction of social charges on low salaries, the French system tends to make...