The NYT wants its readers to believe that the 35 hour work week has made France less competitive, reporting that "even some leading Socialists have acknowledged that the policy has hurt French competitiveness." It's not clear what factual or theoretical basis for this assertion is. In the competitiveness category France seems to be doing substantially better than the United States, with nearly balanced trade, compared to a U.S. trade deficit that exceeds $700 billion a year, more than 5 percent of GDP. On a theoretical level, the article implies that the law increased labor costs, telling readers that law reduced the workweek "to 35 hours from 39, with no loss of pay." In fact the reduction in the workweek was phased in over time. Furthermore, it has been a decade since the law took effect. This means that even if the law may have originally led to some increase in hourly wages, employers would have had ample opportunity to adjust wage rates over the last decade so that wages should again reflect productivity (insofar as they ever do). While restrictions on the workweek can impose some cost on employers, it is not obvious that these costs are large. Furthermore, given the public response to efforts to lengthen the workweek, it appears that the benefits to workers of shorter workweeks are substantial.
--Dean Baker
