In early April, after weeks of massive student demonstrations, the French government backed down and withdrew its proposed changes in national labor law. Under French law, workers are protected from arbitrary firings by a system that requires employers to justify dismissals. The government, most notably Prime Minister Dominque de Villepin, wanted to allow employers the freedom to fire workers under age 26 without reason and with little or no notice or severance pay. The hope was that employers would respond by hiring more young workers.
After almost three decades of rising incomes, average real earnings have fallen relentlessly since 1973. In 1982 dollars, the weekly wage for full-time workers was $327 in 1973, $303 in 1979, $277 in 1982, and just $265 in 1990. During the same period, the income distribution became steadily more unequal. The most dramatic earnings collapse was for poorly educated men, a pattern that accelerated in the 1980s.
Despite the record economic expansion and near full employment, wages for the bottom fifth of the work force are still far below their 1979 levels. Well over one-fifth of the male work force earns poverty-level wages (22.5 percent in 1997), almost twice as high as in the early 1970s (12.8 percent in 1973). This wage collapse is a big part of the sharply rising inequality experienced by American workers over the past two decades.