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In China And India, IT Workers Fiddle While Paris And Rome Burn

Were I an Indian or Chinese IT worker or engineer, I'd be smiling after reading Monday's editions of Le Monde or Il Tempo. That's because I'd know that a job currently located in France or Italy is coming my way. I'd also be secure in the knowledge that after this week's events, there's almost zero chance that a multinational I might want to work for--say, IBM or Siemens--is going to choose Western Europe (with the possible exception of the U.K. or Ireland) over my country as the place for their next big round of job-creating investments. Here's why U.S. politicians and lobbyists need to pay attention to the two latest examples of European countries pressing their own delete buttons.

In France, thousands of youths have been swarming across Paris to protest a law that would make it easier for employers in the country to fire unsatisfactory new hires after a trial period. Predictably, the French government this week withdrew the law. In Italy, voters have refused to give either center-left leader Romano Prodi or center-right incumbent Silvio Berlusconi a clear mandate for desperately needed economic and labor reform. The Italian electorate appeared almost calculated in creating the one result most likely to stifle any real change at all.

Thus, citizens in two of Europe's biggest economies have again shown that they'd rather ride their outdated labor policies to the bottom, as is, than accept even modest reforms that would make them just slightly more competitive vis-a-vis workers in the rest of the world.

They will continue to enjoy 35-hour work weeks and two months of vacation. They will continue to revel in the knowledge that, short of emptying out an Uzi during lunch, there isn't much they can do to get fired. They should enjoy these "benefits" while they last. In Italy, unemployment stands at more than 8%. In France, where a book on how to keep your job while doing as little work as possible is a bestseller, it's more than 10%, and above 20% for youths.

These numbers will only rise as workers in both countries time and again reject changes that would acknowledge the reality of an era in which capital and production can move around the globe faster than you can go from Rome to Hyderabad--on Google Earth! Computer Sciences Corp. is set to pare 5,000 jobs in Europe while adding a similar number of positions in India. That's how Europe's labor laws "protect" workers. They also stifle innovation--quick, name a great Italian software company. A world-class French hardware maker? (Groupe Bull doesn't, uh, qualify.)

What's the takeaway here for American policy makers? It's simple. The more unreasonably burdensome it is for companies to operate in one location, the more likely it is they'll just pick up and move somewhere else. Most Washington lawmakers, with a few exceptions, understand this. It's part of the reason why the U.S. economy is at near full-employment. It's part of the reason why, for skilled IT pros, salaries in the United States are on the rise. France and Italy should be known for more than just great wine and cheese--but after the last few days, it's not looking real good.

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