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Macron’s false claim that laying off workers will boost the economy

Dean Baker

In her Washington Post column, Catherine Rampell recently repeated some ill-founded conventional wisdom in telling readers that French president Emmanuel Macron’s plans to weaken labour unions and reduce restrictions on laying off workers are the path to revitalizing France’s economy. In fact, this claim is not supported by the evidence. There is little evidence that the existence of strong unions or labour market protections are associated with high unemployment.

The most obvious reason that France has had high unemployment is the turn to austerity in 2010 following the economic crisis. As a result of the cutbacks in government spending, there was no source of demand for replacing the demand generated by asset bubbles prior to the crisis. For some reason, this fact is rarely mentioned in reporting on France’s economy

Source: Real World Econ Rev, 9 June 2017

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