World Economy

Labor Force Flexibility Crucial for Competitive Economies

Labor Force Flexibility Crucial for Competitive Economies Labor Force Flexibility Crucial for Competitive Economies

Policies promoting labor force flexibility, like those pushed through by French President Emmanuel Macron, are key to fostering a competitive economy, the World Economic Forum said in its flagship report on Wednesday.

The forum’s annual Global Competitiveness Report studies a dozen indicators from nations across the globe to assess their growth prospects, AFP reported.

Forum economists told reporters that a key finding this year was that labor force flexibility, combined with worker protection, were vital, arguing that both can be achieved simultaneously.

“Competitiveness is enhanced, not weakened by combining degrees of flexibility within the labor force with adequate protection of workers rights,” the forum said in a statement.

The report’s launch comes as French labor unions and leftist leaders mobilize for what they say will be a lengthy battle against Macron’s labor law changes.

Macron’s signature reforms aim to give businesses more freedom to negotiate conditions with workers, while also making it easier to fire people and giving higher payouts to those made redundant.

“I think in the case of France, what we have seen ... is too much rigidity in the labor market, which in these times of rapid change prevent the evolution of the economy,” Thierry Geiger, the head of research in the Future of Economic Progress department at the Forum told AFP. “We advocate for flexibility but combined with a safety net,” he added.

Geiger argued that countries like Switzerland and Denmark had proven there was “no tradeoff” between labor force flexibility and worker protection.

Investing in retraining and unemployment benefits should be a part of the policy mix, the report said.


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