French Bread and Circuses
I'm far from the only American to be mildly astonished at the massive rallies and protests in France right now over the proposed new labor law. One news report claimed that three million people turned out in the streets--that's 5% of the entire population of the country, and equivalent to 25 million people protesting in the U.S. The object of their collective derision is a reform of French labor laws which would make it relatively easy for companies to fire young employees during the first two years of their job. After that time, existing laws would kick in which make it nearly impossible to fire anyone.
France's labor laws have long been the equivalent of Rome's infamous bread and circuses [supposedly the old Roman Republic bankrupted itself because politicians kept promising free bread and circuses to all citizens without levying enough taxes to pay for it all]. The French government, after all, doesn't have to pay the salaries of people who are nearly impossible to fire even if they are incompetent or unneeded. So, if you are a French citizen living in France, once you find a job you are pretty much guaranteed employment until you retire, die, or quit (you'd be foolish to quit, though), or the company goes out of business. In addition, you can't be forced to work more than 35 hours/week (in fact, it may be illegal to even voluntarily work more than 35 hours/week--I'm not entirely clear on the details).
Compare that to the U.S., where nearly all employees are "at will" meaning they can be fired for almost any reason at almost any time. I say "almost" because there are some limits: you can't be fired for being black, a woman, or a religious minority, for example; and under some circumstances (massive layoffs) companies may have to give notice. In the U.S. you can even be fired for refusing to work overtime (as long as the company pays you appropriately). There may also be some contractual limits, such as the CEO who gets a multi-year guarantee.
What that means is that where an American company can afford to make hiring mistakes (you can always fire excess or incompetent employees), a French company will have to think long and hard before bringing someone on. A mistake will be very expensive for a very long time.
In practice it isn't quite so extreme. American companies are often reluctant to fire even very incompetent people just because firing people is difficult, expensive, and emotionally draining for the managers. And I strongly suspect that some of the French labor laws are routinely ignored (when I was in investment banking, we hired a French banker and I asked her how French investment banks worked within the 35-hour workweek when us Americans had a hard time in the business with less than 60 hours/week. She shrugged and said that "nobody asks how many hours I work, and I don't tell."). There are also ways for companies which can't fire someone to "encourage" them to "quit" (I saw this, too, when I was working as an investment banker and my company had a manager who lost an internal power struggle after we were acquired. He couldn't be fired, since he had a multi-year multi-million dollar contract, but he was given a desk in a closet and made to do menial paperwork--for $3 million/year--until his contract finally expired and he quit).
The net result is fairly predictable: in America, where the inherent risk of hiring someone is low, companies hire and fire people constantly. The unemployment rate is relatively low, and if you lose your job you can probably find something (maybe not what you want) within a few months. In France, where there's tons of risk in bringing on a new employee, companies are extremely reluctant to hire, and the unemployment rate--especially among young people--is very high. But once (if!) you get a job, you can pretty much hang on to it forever.
Which system is "better" is largely a philosophical question (i.e. what's more important: stability or growth?). But the two systems are fundamentally incompatible in a global economy.
As an American, the idea that someone might have to spend a whole two years of her career at risk of being fired is pure culture shock. I'm on my third career already, and I don't think I've ever had a job I considered secure.
"You want security, get a burglar alarm."