French President Emmanuel Macron calls for new EU labor policy

It’s not quite “Make France Great Again,” but immigration woes in the European Union have driven French President Emmanuel Macron to call for a new policy to protect his country from what he sees as economic exploitation.

Macron on Wednesday criticized European Union rules that allow cheap labor from eastern nations to flood more prosperous countries — but avoid paying their higher tax rates.

So-called “posted workers” continue to pay into the tax and social security systems of their home countries.

For employers in France and other Western nations, that means foreign hires can be paid less.

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Posted workers are common in construction industries and also home health care, especially among the elderly.

Macron discussed posted workers, also known by critics as “social dumping,” with Austrian Chancellor Christian Kern in Salzburg to kick-off a three-day tour of central and Eastern Europe.

While his tour is meant to rally EU unity after Britain’s recent defection, it’s also an opportunity for Macron to make his case that posted workers are bad for France.

After his sit down with Kern, he said the two countries “have the exact same views on this issue,” the Associated Press reported.

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The current EU rules that permit posted workers are “a betrayal of the European spirit,” Macron said, according to the AP.

Although posted workers comprise only a small fraction of the EU workforce, Macron has a valid point, according to Henry Holzer, professor of public policy at Georgetown University.

“Eastern European countries send workers abroad but retain the tax rights to keep them tied to the home country — that’s a win-win for the source country and not very good for the host country,” Holzer noted.

In general, he added, an immigrant workforce is necessary in most countries to help pay into the tax system to support social services.

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In the U.S., he said, immigrants are critical as taxpayers to support the baby boomers.

“I generally support immigration, but I can see this situation would be a mixed bag. It could reduce costs and prices in some industries, but the posted workers are competing with native-born workers and that can lower wages,” he said.

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“I generally support immigration, but I can see this situation would be a mixed bag. It could reduce costs and prices in some industries, but the posted workers are competing with native-born workers and that can lower wages,” Holzer said.

(DENIS CHARLET/AFP/Getty Images)

Fighting back against posted workers might also help Macron advance another part of his ambitious effort to overhaul France’s notoriously rigid employment system.

Macron’s popularity dropped as he has struggled to lay out a plan to update France’s labor laws, with new legislation to be published at the end of this month.

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Trade unions in France have threatened protests over Macron’s propositions, especially one that would let firms cap compensation for people who had been unfairly dismissed from work.

Macron’s new proposals would also give firms more control of pay for things like night shifts and overtime.

But Macron’s labor law adjustments are important changes, said Holzer, and could help France do more to fight against an invasion of posted workers.

“A country that makes it so hard to fire workers isn’t going to be a country to easily hire workers,” he said. “Such a highly-regulated labor market makes it hard for businesses to create new jobs.”

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It also creates the need for a less formal employment sector — essentially a freelance economy, he said.

But Macron faces a fight on both sides of his effort to modernize France’s work rules and limit exploitation of the EU economy by eastern nations.

While France’s powerful and far-left trade unions are lined up against him on one side, much of Eastern Europe — especially Poland — is against him on the other.

Out of the 11 EU countries that oppose Macron’s plan, Poland is the largest source and beneficiary of posted workers, sending some 300,000 to 400,000 to work abroad and then tax their earnings.

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Like Poland, the other countries that oppose Macron’s plan are formerly-communist nations. The 11th country is Denmark, which says Macron’s changes don’t do enough to protect Danish collective bargaining.

With News Wire Services

Tags:
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