In recent weeks, France's new President Francois Hollande has sought to show his Socialist-led government is working to reduce France's 10-percent jobless rate and rein in state spending. He made often-combative labor and employers' unions sit down together last week, ordering them to devise reforms to underpin new legislation to be passed by year-end. He's also commissioned a report — to be published next month — on ways of making French business more competitive.
Lurking behind Hollande's push is concern that France could slide into a crisis like the ones faced by other European Union partners, including Greece, Italy, Ireland and Spain.
The French economy, Europe's second-largest after Germany, is in a rut. In an analysis in May, BNP Paribas economist Helene Baudchon noted that France's growth rate averaged 1 percent a year from 2001 to 2011 — a full percentage point less than in the previous decade, and down from the long-term average of 3.3 percent since 1950.
One of Hollande's top job-creation ideas is a "generations contract" to encourage older workers to pass on knowhow to younger hires, and adding 60,000 jobs in the public education sector over five years. He also wants to create a state-backed investment bank to help firms start up and grow.
Last month, Hollande unveiled a plan for the government to pay most of the salaries of tens of thousands of young people hired next year — part of his war on unemployment. Under the idea, companies that hire a person aged between 16 and 25 for at least a year will pay as little as 25 percent of the salary, in the plan to create 100,000 "contracts for the future" in 2013.
More recently, he suggested another solution to encourage job creation: shifting some of what companies pay in labor fees to households. In other words, income taxes might go up so that often-onerous payroll taxes could come down.
Yet while Hollande acknowledges that employers need more flexibility, he also says any reforms should include greater job security for workers.
"It's an accord that must be win-win, give-and-take," Hollande told TF1 TV. "If this historical accord can be worked out, it will be very important for our country."
Some economists say "win-win" is simply an impossible task — and something has to give.
THE STATE: A HELP, AND A HINDRANCE
Complicating the picture for Joutard is the fact that the helping hand of the ever-present state in France can be spotted even among start-ups — especially those that prove they are true innovators.
"We are less competitive because of payroll taxes, for example, which are very burdensome ... which is another factor that limits our hiring," said Joutard. "On the other hand, because we're an innovator, we get more help (from the state) than others."
In his small, state-subsidized office and research lab in Paris, Joutard says he would never think of uprooting from France and going to where labor laws are more flexible. He says he owes the country a lot: He received a top-flight business-school degree here, and has received zero-interest loans and cut-rate rent from the Paris regional government, which has rewarded his entrepreneurial drive.
But he also groans that roughly 45 percent of the gross salaries he pays are swallowed up by payroll taxes. French paychecks often come with a long list of such taxes — including fees for healthcare, pensions, unemployment insurance, disability insurance, worker training and fees for a fund aiding the elderly or the disabled.
LOW MARKS ON LABOR FLEXIBILITY
The World Economic Forum, in its Global Competitiveness Report published this month, ranked France 141 out of 144 countries in terms of "hiring and firing practices."
Overall, France fell three spots from last year to 21st in the WEF's Global Competitiveness Index ranking. It generally fared well on gauges of infrastructure, health and education, and was 10th in innovation.