Endo

As we near Labor Day, expect the unions to step up street actions clamoring for an unrealistic policy on contractual labor.

Their demands are more doctrinal than practical. They basically want companies to guarantee lifetime employment for their workers. They want our labor laws to be more rigid and inflexible.

Over the longer term, rigid labor laws are more harmful to workers. They make hiring a more difficult decision to make for companies since they will, in effect, be “married” to those they recruit. There will be less risk for companies to automate than to recruit workers.

In the end, the risk for higher unemployment rises when labor laws become more rigid. There will be less incentive for start-ups and for entrepreneurship. This, in turn, will take a toll on the ease of doing business in the country. It will be a disincentive for investments. The end result is economic stagnation and a high poverty rate.

Observe what happened in France.

After years of Socialist Party rule, France’s labor laws became more and more rigid. As a result, innovation and entrepreneurship declined. A quarter of young French workers could not find work. Many talented new entrants to the labor force discovered they had to migrate to find employment.

Several French administrations have been trying very hard to liberalize labor laws in order to encourage companies to hire as well as encourage start-ups to make the French economy more competitive. They have ben met with waves of sometimes violent demonstrations mounted by the militant trade unions.

Policy reform has been politically costly for a string of French presidents. It drains their political capital. It inhibits their ability to make a mature economy more nimble and more competitive. The whole country suffers because of that.

Over the last few weeks, the government of Emmanuel Macron has been stymied in its effort to reform the inefficient national railways system by rolling strikes that paralyze transport throughout the country. Employees of the national railways company, parts of which are due to be privatized, belong to a militant union affiliated with the Communist Party. That makes reforming this business a major political headache.

It is always easier to move from a fairly liberal labor laws regime to one that is rigid and inflexible. It is always impossible to move back from an over-regulated labor regime. It is nearly impossible to do the reverse. Once constituencies are bred by impractical policies, liberalization is faced by strong political deterrents.

In our context, there is definitely reason for government to crack down on large companies that adopt labor-unfriendly hiring policies that use “endo” (for “end of contract”) policies to bring down their operating costs. Large malls and fastfood outlets hire their sales crews for five-month contracts to evade regularization of workers. That is oppressive, without question.

But it is quite another thing to dogmatically ban contractual labor across the board. That will harm start-up enterprises and businesses that require seasonal hiring. It will make it very difficult for small businesses to make hiring decisions.

A dogmatic ban on contractual labor will harm the unemployed first and foremost. For the unemployed, short-term jobs are preferable to no jobs at all.

That might be easy for the large industrial unions, established during the period of high protectionism in our economy, to understand. Under the cover of protectionism, our unionized industries could afford to give in to union demands by passing all costs to captive consumers.

The New Economy, by contrast, requires high amounts of nimbleness and large doses of competitiveness. Our labor policies must be flexible enough to allow new businesses to grow under these circumstances. Our consumers will no longer tolerate expensive but poor quality goods from companies that harbor unreasonable unions.

Changing economic and business conditions explain why union membership has dwindled to less than a tenth of wage-workers. Unions represent the interests of  those already employed (presumably in businesses that can well afford to host them). They do not represent those who wish to be employed and would therefore accept a more flexible, more practical labor regime.

Barbara

Barbara Bush is an icon in her own right. She was a dedicated wife and devoted mother, matriarch to a political dynasty.

Witty and down-to-earth, she counts among the best loved First Ladies the US ever had. Wife to George H. W. Bush and mother to George W. Bush, she had incomparable access to the corridors of power. But she did not let that diminish her earthiness, her authenticity and her sense of humor.

To the end, she had a clear idea of who she was and what she wanted. In her last days, she rejected aggressive medical intervention and preferred palliative care at home. She died peacefully, with her husband of 72 years holding her hand.

It is not hard to imagine Barbara Bush had strong opinions about things. But she scrupulously kept from interfering in policy.

She was not, by any measure, a raging feminist demanding her share of the limelight. Her advocacies were quiet ones. She crusaded for literacy and, by the power of her example, the belief in the fundamental importance of strong, loving families.

One might say she was old-fashioned – whatever that means. But she represented the values that made America what it is: responsible parents and adoring children, strong communities and loving bonds, a commitment to hard work and personal integrity.

In the banality of the Trump era, we will miss Barbara Bush all the more.