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Get out of the ocean of ignorance and into the flying saucer of wisdom...

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I've chosen the "lump of labor" fallacy, which is the mistaken notion that the world has a fixed number of jobs and that therefore the best way to make workers better off is by protecting those jobs. The French are not the only people who subscribe to this erroneous view of a modern economy, but they seem to cling to it more tenaciously than most.
In short, the architects of the policy reckoned that if I cut my work week from 39 hours to 35, and others are required to do the same, then new folks will be hired to do the other four hours of work.
The French policy assumes that the amount of work to be done in a modern economy is fixed, like a pie, and that cutting that work into smaller pieces -- fewer hours per week -- will provide slices for more people. If you've got six pieces of maple pecan pie to feed 12 people at Thanksgiving, then just cut each slice in half, right?
Requiring 39 hours of pay for 35 hours on the job makes workers more expensive relative to what they produce -- not unlike raising the minimum wage in the U.S. If workers become more expensive, firms will hire fewer of them, not more. French unemployment remains near 10%, roughly twice the rate in the U.S.
Once again, the supposed logic was rooted in the idea of a "lump of labor" -- if you've got an unemployment problem, why make it easier to fire people?
Productivity: The Key to Job Creation
The number of jobs to be done in a modern economy is not fixed. The entire software industry didn't exist 25 years ago. Where did those jobs come from?
As productivity goes up, as it has steadily in the U.S. for 200 years, we're able to make more and better things as a society. In other words, we get richer.
To get your mind around the concept of productivity, imagine a small, insular farming village in which all of the good land is being farmed and every household grows or makes whatever it uses -- from food to the house itself. Further suppose that a stranger walks into town looking for work.
If you subscribe to the "lump of labor" theory, then this guy is out of luck. The only way he could go to work would be by farming part of someone else's land. If he eats more, someone else must eat less.
But that's not how the world works. Suppose the guy who walks into town has figured out how to build a more effective plow. He can sell his plows to farmers, who will pay for them with a share of their more bountiful harvests. Not only will our stranger have a job, but the farmers will be growing and eating more -- even after paying for their new plows.
We can do it again: A second stranger walks into town and offers to set up a school -- or make clothes, or build houses, or design irrigation ditches, or do anything that frees up the farmers to spend more time cultivating their crops. Again, crop yields go up. And again, we've created another job.
specialization, sensible tax and regulatory policies, and so on. The problem with the French policies I described -- and most other labor policies rooted in the lump of labor fallacy -- is that they discourage innovation and productivity. Firms are less likely to take a risk on an employee -- or expansion in general -- if they can't fire their mistakes. Meanwhile, requiring employers to pay 39 hours worth of wages for 35 hours of work makes automation or outsourcing that much more attractive.
There's a crucial caveat to all this, illustrated best by going back to our fictitious farming village. Suppose the stranger walking into town has no high school diploma and no other skills to speak of. In that case, there really is no job for him. Therein lies the most important policy lesson: The key to growing the economy is making potential workers more productive, not trying to ration the amount of work that gets done.