On Thursday, France announced 36 sweeping reforms to liberate its sclerotic labor market.
The changes, which have been approved by France's national assembly, are designed to stimulate the private sector and add new jobs to the economy. While President Macron has recently seen his approval ratings decline, the French leader recognizes that his presidency demands these reforms.
Speaking to Le Point magazine, Macron declared that "Our labor market reforms mark a profound transformation, and as I promised, must be ambitious and effective enough to continue bringing down mass unemployment."
Of course, not everyone is happy. Although some unions say they support the government's policy, other unions are planning massive street protests in an attempt to force the government to back down. And that matters because street protests have traditionally held outsized effect in influencing French government policies.
Yet Macron is right to push ahead. Today, too many French businesses refuse to hire new workers because they fear that doing so will tie up long term capital. Current labor laws require massive compensation for fired workers, and give industry-wide bargaining power to big unions rather than to each business at the local owner-employee level. That makes the cost of doing business and taking risks with capital in France unattractive. Indeed, as the country's recent email-ban regulation attests, French lawmakers have traditionally seen business owners as enemies of the state rather than the means to social goods.
Still, the data best proves why Macron's action is needed. At present, the French unemployment rate is 9.5 percent and the youth unemployment rate 23.4 percent. That compares with respective rates of 3.7 percent and 6.5 percent in Germany, and British rates of 4.4 percent and 12.1 percent.
If France is to escape its current economic malaise it must confront the source of that problem. Finally, a French president is now doing so.