...Employers say manufacturing has an image problem after decades of cheap competition from Asia and Eastern Europe shuttering factories across France. The industry has shrunk to 10 percent of the economy today from 25 percent in the 1960s. Recent factory closures at Ford, Alstom and Whirlpool have added to an image of woe.
Labor unions say the issue is not a shortage of workers, but that companies pay low wages and then complain about a lack of labor. If companies increased pay, unions argue, they would find employees.
...Others say France’s predicament is more complicated.
“The real problem is that French industry is still not as modernized as elsewhere in Europe,” said Patrick Artus, the chief economist of Natixis Bank, based in Paris. “That has lead to low productivity, which prevents companies from raising salaries,” he said. Manufacturers need to ramp up investments, he added.
...modernizing the national vocational system. Only around a third of French students pursue vocational training or apprenticeships, which are seen as leading to unprestigious work in a country that prizes academics and white-collar careers.
...French industry proved no match for globalization and did not adjust to competition from countries with lower labor costs and tax rates.
...“In France, employer taxes amount to 40 percent of a worker’s salary,” said Stéphane Vandenabeele, the managing director of UNT, which makes precision tools for eyewear and watches. He recently lost a skilled employee to a competitor in Switzerland that offered nearly twice the 2,800 euro after-tax salary he paid. With Swiss employer taxes of just 12 percent, he said, he couldn’t match the price.
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