* Workers less mobile in euro zone than U.S., east Europe
* French, Italian jobless reluctant to move to seek work
* Housing costs, lack of retraining, family ties cited
By Ingrid Melander and Catherine Hornby
PARIS/ROME, June 27 The car plant where
46-year-old Agathe Martin works is shutting down, but when PSA
Peugeot offered her a job in another factory elsewhere in the
Paris region she said "Non".
After 17 years working in the same plant, taking the job
would have meant either a much longer commute or
losing her cheap social housing and uprooting her two daughters
in a move.
The single mother prefers to stay put and look for another
job even if that will be hard amid soaring unemployment and with
only factory work and small jobs on her CV. If all else fails,
she will still have more than 60,000 euros in severance pay.
"I am lucky enough to have a small house with a rather
modest rent and I would not find that elsewhere," Martin said,
huddled in a bicycle shed to escape the rain with colleagues who
had just cashed in their severance cheques.
More than 2,000 km (1,250 miles) away on the sunny Italian
island of Sicily, 47-year-old Calogero Cassia struggles with the
After losing his job nearly two years ago when the Fiat
plant near Palermo where he had worked for 25 years shut down,
the father of three would be happy to take any kind of job in
the area, where he has strong family ties.
But he worries that he does not have the skills to transfer
to other sectors.
"If you look around it is just desperation, you find
nothing, we can't manage," he said. The Termini Imerese plant,
the main local employer, shut because of its remote location on
an island south of mainland Italy, with 2,200 workers affected.
In both countries, hit by industrial decline and factory
shut-downs, the lack of mobility fuels raging unemployment,
adding to recession and lagging competitiveness.
Too many workers are unwilling or unable to move from one
sector to another or one region to another, due to a
debilitating mix of factors from high real estate prices to
deficient training and family dependency.
The immobility in wealthier "old Europe" is a contrast to
the hundreds of thousands of workers from poorer central and
eastern Europe who took advantage of the EU's free movement of
labour to flock westwards in the mid-2000s in search of jobs.
About 19.2 million people are now out of work in the
17-nation euro zone, a top priority for EU leaders who meet on
Thursday and Friday in Brussels, but with little concrete relief
The number of jobless is at a record high Italy, where it
reached 12 percent in April, and in France, where anlysts polled
by Reuters see it at 11.5 percent in the last quarter of 2013.
Among young people, the unemployment rate is more than double.
So greater movement across jobs and regions is an imperative
at a time when whole sectors are struggling and factories
closing, says Herve Boulhol, the lead economist for France at
the OECD think-tank.
"When a sector is in decline, restructuring and reallocation
of jobs takes too much time in France. Some of the labour rules,
including on collective redundancies, need to be trimmed, while
training and assistance to find jobs must be improved," he said.
People move eight times less among the EU's 27 member states
than between the 50 U.S. states, according to OECD 2010 data.
This is partly due to language barriers. But even between
regions of a same EU country, mobility is still nearly
two-and-a-half-times lower than among U.S. states, data on the
EU's 15 oldest states shows.
More people from crisis-hit southern EU now want to move to
the wealthier north, but mobility within countries is still low,
the European Commission said in a report on Tuesday.
A key obstacle in France is the jump in real estate prices
in the past decade, with 40 percent of French businesses blaming
housing problems for difficulties in recruiting staff or
transferring them to another location.
People who have rented the same home for years will lose out
if they move, especially if they have to give up subsidised
For Peugeot worker Martin, this was the main reason not to
accept the job offer in Poissy, west of Paris, when her plant in
Aulnay-sous-Bois in the northern suburbs shuts down next year as
the loss-making French group tackles production over-capacity by
cutting 8,000 jobs nationwide.
She pays just 320 euros per month for a modest house with a
garden south of Paris, thanks to a deal struck between Peugeot
and the local authority landlord. That is affordable on her
monthly salary of 1,200 euros ($1,600) and a bargain in a region
with the highest real estate prices in the country.
For those who own their home, high transaction costs, from
notary and registration fees to taxes, are a major obstacle to
moving, which the government plans to tackle with tax breaks.
France has the second-highest housing transaction costs
among 33 OECD countries in a study the think-tank based on 2009
data - nearly three times higher than in the United States.
Italy is a nation of home owners and many young Italians
live with their parents.
While younger people with fewer ties are more likely to move
abroad or to the wealthier north, they can be put off by the
types of work contract they are offered, said Raffaele Fabozzi,
professor of labour law at LUISS University of Rome.
"A young person who has to move to another region has to pay
for their rent ... so if they don't have a stable contract they
don't have any reason to leave their family home," he said.
Italy, like France, has a two-tier labour market that gives
protection and benefits to salaried workers and hardly any
rights to hundreds of thousands of mostly young people on
temporary contracts. In the current recession, employers have
become even more reluctant to hand out long-term contracts.
Unemployed people also face difficulties moving to new
sectors due to limited retraining and qualification services.
Welfare spending in Italy has traditionally focused on
pensions, while spending for labour policies has been more
limited, said Luca Paolazzi, head of the research unit at
employers' lobby Confindustria.
"We have few active policies to boost work. We have few
training, education and requalification capacities and ability
to move workers from one sector to another," he said.
In France, government officials acknowledge privately that
too much is spent on generous unemployment benefits and not
enough on training. But reforming the unemployment benefit fund,
is a matter for negotiation between labour unions and employers,
due to begin this autumn.
Rudy Tichy, who heads a public employment agency in Altkirch
in the eastern French region of Alsace, said the closure of big
plants in former industrial regions such as his triggered a
skills mismatch which requires people to either move or retrain.
"Half of the people registered here have industry sector
profiles but the jobs on offer are in the services sector,
personal assistance to people, trade," he said.
Beyond that experience mismatch and the practical
difficulties of moving a family and making sure both spouses
have a job, "French tradition means people simply don't have
geographic mobility in mind," said Tichy.
While France has an extensive network of childcare services
and subsidies, in Italy, many families rely on grandparents to
help look after children, which also makes it harder to move.
In Lazio, south of Rome, 57-year-old Guerino Ventre is
struggling to make ends meet with the roughly 1,000 euros a
month he earns for working about 10 days a month since Fiat's
Cassino plant in Lazio started running at reduced hours.
But the father of three grown children, who has been working
in the plant for 34 years, said he doesn't want to leave the
region, where most of his relatives live.
"I have my family here now, my things. And then there is the
question, where to and to do what? All plants are experiencing
the same situation, so moving does not make a difference."
($1 = 0.7461 euros)
(Writing by Ingrid Melander; Editing by Paul Taylor)