It's A Jungle Out There

At times like these it is odd to speak of one "Western world," so wide are our differences. Mounting layoffs in the United States have aroused barely a whimper at home, yet inflamed the passions of protesters in France last week, where unions were staging their largest demonstrations in years. They marched in 25 cities--80,000 strong in Paris--against a plan to raise the retirement age by five years to 65, the same age as in the United States. Carrying slogans that read we want time to live before we die, they blasted songs of solidarity from sound trucks, and accused business leaders of trying to impose on France the rough rules of the American workplace. "For us, the American job market is a jungle," said SUD union founder and leader Annick Coupe. "The U.S. is not a model to be followed."

The pace of "creative destruction" is accelerating in the United States, which only reinforces Europe's view of America as a Darwinian survival test for workers. In the 1990s Americans saw the first wave of layoffs ever to strike in good times, as companies pressed for advantage in an ever more cutthroat economy. Now the pace of layoffs is quickening in anticipation of a downturn, and Europe is increasingly wary of the trends. "Even a year ago, the mood in Europe was, 'We're doing everything wrong. We better follow the American model'," says Eileen Appelbaum of the Economic Policy Institute in Washington. "Now I'm struck by the sense of optimism. Job growth is back, particularly in the European 'Tiger' economies. In the face of pre-emptive layoffs in America, Europe is almost relieved to have another model to follow."

It's become fashionable in London and Berlin to trash as a "myth" the image of a "sclerotic" European labor market, choked by regulations. Europe now looks to its Tigers--Austria, Denmark, Ireland and the Netherlands--to show the way. The Tigers have achieved American levels of unemployment--4 to 5 percent--with very different methods. They've persuaded unions to restrain wage demands in a spirit of cooperation inconceivable in the United States. And they are leading a variety of European experiments with ways to boost the employment rolls by sharing jobs. French economist Dominique Foray dismisses the idea that Europe is "converging toward a U.S. style of capitalism," and predicts the emergence of many models on the continent.

Europe is showing surprising signs of flexibility. The high-tech boom is widely believed to have created a surplus army of freelancers and temps in America. The truth: part-time labor is falling in the United States, and is more common in Europe. In a development recently cited by the European Union as a model, Volkswagen avoided layoffs in the mid-' 90s by introducing a flexible 28-hour work week that allows management to vary hours to meet demand. Last year the Netherlands passed a law that requires companies to meet worker demands for fewer (or more) hours, unless there is a valid business reason to refuse. Many companies are working harder to retain staff, on the grounds that a high-tech economy requires "lifelong education." Job "tenure" is actually increasing, says International Labor Organization economist Duncan Campbell. "The workplace is becoming more and more like a university setting."

Worldwide, unemployment has risen by 20 million to 160 million since the financial crises of 1998--but Europe is well off compared with Asia and Latin America. In France unemployment has fallen from 12 to 9 percent since 1997. With the picture improving, France sees no reason to rethink new steps like the (inflexible) 35-hour work week. In Paris angry strikers weren't about to back down. "Our bosses are trying to impose the American way of life on us," said union member Dominique Campagna. "The little Gaulois are still fighting. We will never accept what American unions have accepted." Perhaps. But the European way will be harder to defend if an American recession crosses the Atlantic.