Public's `Furious Pessimism' Over the Decline in Jobs Spurs Hot Debate in France

IT is a cold, drippy night in Paris, the kind of evening Stephanie Benais could have spent at home with a book, but instead she's out with 600 other Parisians participating in a debate on reducing work time to create jobs.

``Up to now we've been waiting for economic growth to solve the unemployment problem for us, but I think it's been about 20 years that we've been waiting,'' says the business school student. ``If this many people are here tonight, it's because people realize the old ways don't work any more. And people are desperate.''

Unemployment, now affecting more than 3 million French workers and expected to idle 12 percent of the working population by the end of the year, has been the No. 1 worry in France and across most of Europe since unemployment figures began rising dramatically this decade. (EC faces jobs decline, Page 3.)

But in France, that chronic worry has transformed into an acute sense of desperation over recent weeks as several factors have come together to bring the population to the threshold of what the government says could become a ``revolt'':

* On a single day in Septem-ber several major French companies announced more than 4,000 job cuts, augmenting a feeling that in this crisis, no job is safe.

* Last month's Air France strike, which shut down airports in Paris and several provincial cities, sent the message that France's work force had reached a breaking point.

* The announcement by France's economic statistics institute on Nov. 3 that no improvement in employment rates should be expected for a year only added to questions about the effect any pickup in activity will have.

For many analysts, the ``click'' that shifted the French social climate from moroseness to what one calls a ``furious pessimism'' came when recent events exposed people to the idea that economic growth is not likely to translate into job growth.

``People had been put to sleep by the steady but gradual rise in unemployment, and then all of a sudden they crossed a threshold,'' says Michel Crozier, a labor specialist with SMG France consulting company. ``What pushed them over was the realization that the recovery, when it comes, won't allow us to bring down the number of unemployed.''

The fact that economists are unsure about how a return to growth in Europe will affect the job market has added to the malaise. ``Our experience in the situation we're facing is limited,'' says J. Paul Horne, an economist with Smith Barney Shearson in Paris. ``After the last recovery [in the early '80s], we didn't have the competition of the [newly developed] countries we have today. Our job-creation responsiveness is simply unknown.''

Still, Europe is likely to follow the same low-job-growth scenario the United States has in its current recovery, ``only it will be worse,'' Mr. Horne says. The reason? ``Europe hasn't gone nearly far enough in cutting regulation, and that scares off job creation,'' he says. ``There's too much rigidity in the labor market.''

A realization that the labor market must be reformed, public pessimism over traditional job-creation methods, and fears in Prime Minister Edouard Balladur's government of a social explosion have come together to give a sense of urgency to solving the jobs crisis.

Thus the sudden popularity of a proposal to create jobs by cutting the work week to four days. The French Senate on Nov. 8 approved a plan to encourage company ``experimentation'' with job creation through a shift to a 32-hour work week - even though a similar proposal was defeated in the National Assembly last month.

For many observers, what happened in between the two votes was the Air France strike. ``Now they [politicians] are desperate to look like they're doing something, but people shouldn't be fooled,'' says Alain Fraise, a communications manager who was unemployed for three years before landing a job in a public youth job-training program.

Noting that the Senate plan requires a wage cut for employees working a 32-hour week, Mr. Fraise adds, ``You'll have people consuming less, when what we need is higher consumption to prime the recovery.''

Despite such arguments, the debate over the 32-hour work week has blossomed in France and across Europe - in Germany, Belgium, and in Spain, where unemployment tops 20 percent.

Last month, Volkswagen revealed plans to reduce workers to a four-day work week as a means of saving 30,000 otherwise doomed jobs. That announcement led critics such as former French President Valery Giscard d'Estaing to lambast work time reduction as cynical ``share-the-misery'' schemes.

But proponents insist shorter work weeks can be an element of hope for the future - both for the currently unemployed and for workers attracted to the prospect of more free time.

THIS idea is being ac-cepted because people see that the old solutions are no longer credible,'' says Pierre Larrouturou, a guru of work time reduction. ``Under current conditions we would need a growth rate of 5-6 percent to bring down our unemployment rate, and we can't count on that.''

A generalized reduction to a four-day week, Mr. Larrouturou says, could create up to 2 million new jobs - provided the state worked with companies to assume some of their costs, such as unemployment insurance, and also compensated the salary cuts of the lowest wage earners.

The plan is an indication of a new ``flexibility'' that economists say the French and European labor markets need. But the number of French companies already working with such flexible-time plans indicates that the private initiative is already there.

What worries some analysts is the important government role in Larrouturou's plan, which leaves the impression that France still looks to the state as the primary economic problem solver. ``It's another bureaucratic idea that works for the technocrat on paper,'' says Mr. Crozier. Adds Horne, ``It's back to the taxpayer for job creation.''

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