France And The Dawn Of The “Open Ended” Labor Stoppage

Strikes and labor stoppages around Europe have increased in number and intensity. The increase has occurred as workers protest the effects of pending austerity programs planned by several nations which have run high deficits and have massive national debt in relationship to their GDPs.

The workers on strike stand to have their wages cut, and their only way to combat these cuts is to shut down the government services and key industries in their countries. That may cause politicians to reconsider austerity plans and the effects they will have on worker compensation.

In France, the labor movement has come up with a novel program, which it calls an “open ended” strike. That appears to mean the labor stoppages will go on forever, or until the French government reconsiders what the long-term consequences that a closure of its critical industries would have on GDP. The French government, like others in Greece and Ireland, have to deal with the fall-out of their planned cuts in pensions and lay-offs in the public sector.  This is in addition to the taxes that will be levied on private citizens and companies.

The most immediate cause for strikes in France is a plan to raise the minimum retirement age from 60 to 62 and the age at which people get full pensions from 65 to 67. There is some sense to this government plan from an actuarial standpoint. Most people live longer. That puts a growing burden on the state.

Governments across Europe are increasingly faced with a dilemma that cannot be solved. Their deficits are unsustainable if they mean to raise money in the global capital markets to handle their nations debts. Germany, the largest economy in the eurozone, has begun to chafe under the financial pressure put on it to fund the “bail outs” of its neighbors.  Its irritation will only increase if austerity programs are not put into place quickly.

The strikes in nations like France have gone from sporadic to “open ended.” Unions and other labor movements now plan to nearly shutter the economies of their countries no matter what the economic cost – even if it means the collapse of the economies in those nations. It appears that they are happy to have the temple fall and crush them as it did Samson. The labor movements will jeopardize their futures in the name of saving them.

Douglas A. McIntyre