France: Unions, jobs and outsourcing

This week I will be citing a few recent papers on outsourcing. The first, by senior INSEE researcher Francis Kramarz, examines the French experience. The paper shows that French unions who flex their muscles in the face of greater trade competition make things worse, by encouraging firms to oursource more jobs. Here is the abstract for Outsourcing, Unions, and Wages: Evidence from data matching imports, firms, and workers (PDF), delivered at the University of Nottingham's recent conference on The Impact of International Competition on Firms and Workers:

How are wages and employment of manufacturing workers affected by trade competition? In particular, how are wages and employment affected by the sourcing strategies of their employing firm and those of their competitors? What is the role of unions in this process? I attempt to answer these questions using unique French data that matches firm-level information on imports, value-added, employment, firm-level data on unions and negotiations, with individual worker data; at a unique moment - the first years of implementation of the Single Market Program (SMP) within the European Community.

A simple bargaining model, particularly well-suited to the French institutional setup, allows me to capture the mechanisms by which changes in competition can directly affect wages: changes in the firm's ability to pay (as measured by the quasi-rent, the total pie shared between the workers and the firm) as well as changes in trade competition and sourcing strategies that potentially affect the bargaining process by altering both the firm's and the workers' threat points. I use an IV strategy where export prices of American firms act as instruments for trade competition and outsourcing. First, trade competition affected the size of the quasi-rents, most particularly in large firms where these rents were large. Because workers received in average 20% of the quasi-rent but also because wages declined with competitive pressure induced outsourcing, trade competition has negatively impacted wages.

To see how unions potentially entered the process, I re- examine my results when information on firm-level negotiations between firms and unions is added. As expected, in firms with strong unions (those able to impose bargaining on both employment and wages) workers were able to capture a large share of the declining quasi-rent (about 50%). However, the presence of strong unions has apparently led these, mostly large, firms to increase outsourcing with an associated decline in employment. As a result, unions' fight for workers' wages and employment appears to have backfired.

Comments

[Lafayette]

NE: "he finds that international outsourcing, when narrowly defined, has "a marked impact on individual employment security"

Oh, wow. He found the obvious ... which is not difficult when you go looking for it.

But, did he investigate the cost of products (of German outsourcing manufacturers) that (1) either came back to Germany at cheaper prices thereby enhancing purchasing-power-parity for all (both consumers and companies) or (2) earn export revenues for the company thereby contributing to corporate profits?

The fact that this happens means that workers should be freed from manufacturing jobs that produce products at prices that are not competitive in order to build products that are competitive.

Why doesn't this happen? Because German labor laws prevent easily firing people to free them onto the labor market for the substitution to take place. So, companies keep them on hoping to obtain more productivity from the work force (by lengthening the work week) and therefore at least breaking even on domestic production.

In France, 80% of French companies this year had obtained their profit because of operations abroad. Meaning, on French operations they made little or no profit whatsoever. But, they did manage to keep 90% of the working population employed. This means that stockholders paid the cost in foregone dividends to maintain French employment levels.

(This idiocy is called the unique and exclusive French Social Model. The Germans do the same, but they refrain from calling it pompously a great social achievement.)

Now, the wonder of all this is: Why does the European EuroStoxx index keep straining to new heights? What on earth can possibly be propelling it if domestic profits are non existent?

My answer: Petrodollars and other earned foreign income (namely Chinese) is coming into the Euro (via equities), which has earned the reputation of a bona fide reserve currency. It is presently at a handsome premium to the dollar.

What does this mean? Heaven help the dollar when the Chinese decide that they've had enough of it.

Why wont this happen any time soon? If the Chinese do not buy T-notes, then it cannot finance America's binge on Chinese products. Selling the dollar would be shooting themselves in the foot. So, they are squirreling their reserves into both currencies and, as may please them, they will transfer from one to the other, thereby manipulating the exchange rate between the Euro and the dollar.

The Chinese (central bank) authorities know this, thier American counterparts know this and the Europeans know it as well. We live in a knowledgeable world.

[Lafayette]

NE: "The paper shows that French unions who flex their muscles in the face of greater trade competition make things worse, by encouraging firms to oursource more jobs."

Ah, ha! Yet another paper that demonstrates the obvious! But, this time in French, so maybe the lesson will sink in?

Maybe, maybe not. With the "belle au bois dormant" elected yesterday as Socialist candidate for the presidency, anything can happen ...

Still, there is some hope. Meaning this: The mammoths of the Socialist Party (including her husband who runs it) have taken a clanging. Segolen Royale is one of "them", meaning she is a graduate of the political trampoline Ecole Nationale d'Administration (which teaches people how to administrate but not necessarily how to think).

Where's the hope? Segolene actually said that she "admired" Tony Blair. Cherie must have swooned ...

If this is the case, then Segolene, if disastrously elected to the post, will likely not adhere religiously to the Socialist line that has divided the world into black and white. (NB: Those who wear white hats are the evil capitalists and those who wear black hats are do-good socialists. That way, the masses understand better the difference between good and evil.)

[travesti video]

istanbul hotel conrad istanbul/taksim startravestiler This article is very beautiful, I really get very beyendım text files manually to your health as you travesti very beautiful and I wish you continued success with all respect ..

Thanks for helpful information travesti siteleri you catch up us with your sagol instructional çok explanation.
en iyi travestiler en guzel travesti

travesti
istanbul travestileri
ankara travestileri
izmir travestileri
travestiler
trv
travesti siteleri
travesti video
travesti sex
travesti porno
travesti
travesti
travestiler
travesti
travestiler
sohbet
chat
organik
güncel blog

[Maria]

Çilek sex shop Mağzamızda En Kaliteli sex ürünleri, sex oyuncakları şişme bebek ve erotic shop erotik giyim Ürünlerini Bulabileceğiniz Gibi Ayrıca, penis büyütücü, geciktirici, Bayan Uyarıcı, Ürünlerde Temin Edebilirsiniz. 1994 ten Bu Yana En Kaliteli Orjinal Erotik Ürünlerini Sağlamakta Olan Çilek Erotik Shop ta Tüm Cinsel Ürünleri Bulabilirsiniz

[VimaX]

I am thoroughly convinced in this said post. I am currently searching for ways in which I could enhance my knowledge in this said topic you have posted here. It does help me a lot knowing that you have shared this information here freely. I love the way the people here interact and shared their opinions too. I would love to track your future posts pertaining to the said topic we are able to read.