How France and Sweden Are Coping With the Changing Workplace

How should countries cope with the effects of the globalization of business and labor?

Two articles relevant to this question appeared in consecutive issues of the New York Times this week. They highlight some of the workplace policies and practices of Sweden and France respectively.

"4 Hours a Day, 3 Days a Week" examines the growth of temporary workers in France. It presents a different perspective on the French workplace than what we've seen lately as students and unions forced the government to back down from implementing a new law making it easier to fire entry-level workers.

Apparently temporary working is growing at a rapid clip in France. Some of this trend is driven by the fact that it is so hard to fire people so company's are extremely reluctant to hire anyone on a permanent basis. Instead, many rely on temporary workers. But in some industries this is not such a bad thing. The article describes one temporary worker who has turned down offers of full time work because she'd rather work for multiple "clients" than a single employer. "You lose your edge."

"An Economy With Safety Features, Sort of Like a Volvo" discusses how Sweden deals with the social impacts of downsizing and corporate restructuring.

Both articles highlight aspects of each of these countries that go against each countries national stereotypes. Sweden is viewed as a crade-to-grave welfare state with high taxes on business, but it turns out to be one of the more dynamic and resilient economies in Europe. According to the article, the Swedish economy is set to grow by 3.7 percent this year — almost twice the rate forecast even for Germany, the only one of the big Continental European economies showing signs of confidence.

Sweden's official unemployment rate of is only 4.8 percent, but many economists say, is distorted by the omission of people in government-financed retraining programs. This may actually be a good thing, especially if they are being trained to take on tomorrow's high value, good paying jobs. After all what wrong with making investments in developing a country's human capital?

Behind its economic prosperity is Sweden's collective toward dealing with disrupiton and change.

Says a labor union leader, "Our job is to create a society where people are protected and suffer as little as possible and get new chances in society with education and training. There's a social charter, a social contract. There's a general peace contract in Sweden. There's a general culture of problem-solving instead of fighting."

Why such a cooperative attitude about dealing with problems instead of shifting them to the other guy?

Joakim Palme, a leading expert on Nordic welfare systems is quoted in the article as saying, "I think the fundamental aspect of the Scandinavian model is trust.....the Scandinavian experience has been to be positive to this change, because it is producing more wealth in the end."

This is obviously a contrast from the "every man (and woman) for themselves" mentality that's prevalent in the States.

Sweden and France - two countries grappling with the downside of competing in a world of global business. Sweden seems to be coping better it's not nearly as difficult to fire people there than in France, but employers and the government work in partnership to provide generous benefits and training to displaced workers. France is struggling more with this problem, but temporary work seems to be a default, albeit imperfect solution.

The situations each of these countries is facing highlights the need to rework the employer-employee 'deal' or contract to one that apportions risk more fairly and allows people to be more agile in dealing with changes in industries and the demand for skills.

According to Raymond Torres, a top labor economist at the O.E.C.D., "The best way would be to reform the permanent labor contract...The more rigid the requirements are for a permanent contract, the more employers tend to recruit temporary workers....It's not just a social issue, it's a waste of human capital, a waste of productivity, and it divides the labor market."

I agree with Mr. Torres that change is needed, but perhaps moving to a system that allows individuals employers to negotiate contracts on relatively level playing field based on individual needs and the tradeoffs each side is willing to make would be better than any one-size-fits-all laws or regulations. It won't be easy to do this, but we'll certainly never get there unless we try.