The new law would encourage employers to hire a young person by exempting that hire from some of the laws that make it almost impossible to fire anyone. When no one can be fired, no one will be hired either unless the employer is sure: 1) the job needs to be filled forever; and 2) the potential employee is low risk for "on the job retirement." People with no experience or skills are the most hurt by this "protection," and France has had double digit unemployment for over a decade now.
Not that we're ever sorry to see a situation blow up in the face of PM Dominique de Villepin, but this modest reform was at least a small step in the right direction. France desperately needs to deregulate its markets for labor, goods, and services. Unfortunately, prospects are dim, as reported in this (subscription link) article at WSJ.com:
According to a recent poll, France is the only country among 20 surveyed where those who don't have faith in the free market outnumber those who do. Only 36% of those polled in France agreed with the proposition that the free market is the "best system on which to base the future of the world" -- compared with 71% in the U.S., 66% in Britain and 65% in Germany. In nominally communist China, 74% said they favored the free market, according to the University of Maryland's Program on International Policy Attitudes.Pres. Chirac and PM de Villepin have certainly done their best to make electoral hay by stirring up fear of capitalism (especially foreign companies), so there's a certain irony in this coming back to bite them. Still the economy is not going to improve while the only potential cure is mistaken for the cause of the problem.
It's a shame to see a country that was once as great as France thinks it is, marching defiantly down the path to economic ruin.