France is undergoing another social convulsion, as hundreds of thousands of students and young people – now joined by the children of immigrants from the deprived banlieues – protest against a new law designed to increase the flexibility of the labour market. Some, like Naima Bouteldja, see the demonstrators as resisting the "flexploitation" characteristic of "the authoritarian market society France has become"; others, like the veteran of the 1968 protests (and current Green member of the European parliament) Danny Cohn-Bendit, portray their actions as "defensive, based on fear of insecurity and change".

These contrasting perspectives reflect the fractures at the heart of current French social experience. Every country has its "haves" and "have-nots", but in France the have-nots are a particularly desperate lot. With 10% of the workforce without a job it is one of the few rich countries with mass unemployment. The problem affects mostly the young (22% of whom are without a job), older workers (only 37% of the 55-64 are in work), and the black and brown (the level of unemployment in the immigrant estates of the banlieues that exploded in the riots of October-November 2005 is typically 40%).

The problem is accentuated by the fact that in France, those without work tend to remain so for much longer than in any comparable country. Almost half of the 2.5 million unemployed have been jobless for a year or more; the typical time between jobs in Britain, the United States, and many Eurozone countries – a hard core of long-term unemployed aside – is a few short weeks.

Henri Astier is a French journalist.

Also by Henri Astier in openDemocracy:

"'We want to be French!'"
(November 2005)

Moreover, unemployment is only part of the story. Millions more are caught on a treadmill of short-term schemes – mostly subsidised by the government – that lead either nowhere or to another dead-end job. Add those living off various welfare benefits, and the number of people relegated to the margins of French society has been variously estimated at a staggering 7-12 million.

The real fracture sociale Jacques Chirac referred to when he was elected president in 1995 – and has gone on to do nothing about – is between "insiders" with well-paid, secure positions, and "outsiders" who find it extremely difficult to get on the career path many take for granted in other countries.

It is the desperation of the outsiders that drives the current wave of protests against the new government scheme – the contrat première embauche (CPE, or "first employment contract") – that gives employers the right to dismiss workers under 26 years of age during their first two years in the job; only two weeks' notice is necessary, and no reason is required for the sacking. In effect, the security afforded by the country's highly protective Code du travail (labour code) is denied, or at least postponed, where young workers are concerned.

Those who are already shut out from the workforce feel targeted by a measure that reduces their already slim chances of getting a decent job to nothing. One protesting student told me: "I simply disagree that it is okay to fire someone who has worked less than two years. This is going to be a big problem for French youths who are joining the job market. It will cause inequality between young and old."

Another student said the new law gives employers the power "to abuse the labour market". The government, he says, "is simply protecting capitalist interests and selling out the youth of this country."

Too regulated or too free?

One can only sympathise with France's young outcasts – but one has to ask what the cause of their current plight is. The truth is, it can hardly be blamed on a system that "protects capitalist interests".

France is not a neo-liberal country buffeted by the rough winds of global markets: it is by far the most heavily administered country in the developed world.

The French state spends 55% of the country's gross domestic product (GDP) every year – against less than 40% for the Organisation of Economic Cooperation and Development (OECD) zone as a whole, and a Eurozone average of 49%. France's unreconstructed public sector accounts for a quarter of the workforce.

French governments of all political hue have historically played a major role in every aspect of economic life. Despite half-hearted privatisations in the past twenty years, the state still has a controlling stake in more than 1,000 companies, resisting a worldwide trend towards private enterprise.

The French state is particularly active in the area of employment. The Code du travail – which runs 3,000 pages, with more regulations added every year – gives private-sector workers virtually the same protection as civil servants. To try to oil the wheels of such a rigid system, French governments over the years have set up a bewildering number of subsidised initiatives. The new law is better seen as the latest of these than as a radical departure.

Also on France's social problems in openDemocracy:

Johannes Willms, "France unveiled: making Muslims into citizens? "
(February 2004)

Patrick Weil, "A nation in diversity: France, Muslims, and the headscarf"
(March 2004)

Patrice de Beer, "Paris in flames: the limits of repression"
(November 2005)

Patrice de Beer, "Law and disorder in France" (March 2006)

France's outsiders, in short, are not victims of capitalism. As numerous official reports have pointed out – notably one written by Michel Camdessus (former director of the international Monetary Fund) in 2004, and promptly shelved by the government – they are the victims of a social system that punishes the very people it is designed to protect.

To pay for short-term job schemes the government taxes companies heavily, discouraging them from creating proper jobs and swelling the ranks of the jobless who need subsidising. And most crucially, the ironclad guarantees contained in the Code du travail are a strong disincentive for employers to take on more staff.

"The problem in France is that we have too many constraints", says Sylvain Fievet, head of SOS PC Assistance, a computer-service company near Paris. Because firing anyone is so difficult, Fievet says he thinks "ten times about creating a new position".

Jean-François Roubaud, president of the French federation of small and medium companies (CGPME), regards fears that the new CPE will lead to widespread exploitation as misplaced: "An employer does not hire people because he wants to get rid of them. It costs money to take people on and train them. The employer hopes to make every job a success. But he also want to be able to dismiss staff if a project turns out not to be viable. If he cannot dismiss people, he will prefer not to take the chance."

Critics of the CPE warn against France adopting the dreaded "Anglo-Saxon" model. But such criticism is wrongheaded, on two counts:

• the lot of the average worker in the United States or Britain is not nearly as bad as the French make out. The average spell in employment in Anglo-Saxon countries is no shorter than it is in France, and workers there do have legal and contractual rights. Most importantly they enjoy the best social protection of all: the knowledge that in a healthy economy, someone who loses his job is likely to find another one soon.
• job flexibility is not an Anglo-Saxon preserve. Countries with impeccable social-democratic credentials – notably Denmark, the Netherlands, and Sweden – have greatly reduced unemployment by making labour more fluid.

A flexible workforce is not inconsistent with a decent welfare system – it may in fact be the only way to make social democracy work, as sustainable benefits need to be supported by an economy that generates revenue.

True, the CPE is not ideal. Many rightly question the rationale behind making labour more flexible for the under-26's only. One of the sceptics is Laurence Parisot, president of le Mouvement des Entreprises de France (Medef, the main employers' federation). She says: "There is always a risk in singling out a section of the population for separate treatment – especially the young."

At the same time, this particular government measure – if it survives the protest wave, the compromises suggested by its chief architect Dominique de Villepin, and the counter-suggestion of his rival Nicolas Sarkozy that the CPE is initially applied for six months on an "experimental" basis – in no way represents root-and-branch reform. There is no sign of such reform happening, certainly not at this stage of the French electoral cycle – and whatever the protestors are calling for (as opposed to denouncing) it is certainly not that.

Indeed, when students demonstrate by waving the (red-covered) copies of the Code du travail, the distance from their predecessors (and in many cases parents) who marched in 1968 waving copies of Mao Tse-tung's "Little Red Book" can be measured in spirit and ideology as well as decades. The current generation is speaking the language of security not freedom, of entrenchment not creativity – of a longing for the safe "inside" not the subversive "outside".

In saying, in effect, "do not touch existing labour law", they are not campaigning for change, but are seeking to preserve the status quo that treats them and millions of French citizens so shamefully.