I am looking for a good reference to something that outlines clearly
the reasoning used by students and unions to support their outrage at
the CPE.  Something like a op-ed or two against the law, in English,
would be good.  I've tried looking but I can only get accounts of the
protests and political conflict, but never a good argument as to why
oppose the law other than some vague reference to "fears about job
security".  However, such a general statement doesn't address the
counterpoints about reducing unemployment, competing in the global
marketplace etc.  In my view as an American, and proud capitalist, I
think the protesters are not very short of insane, but i'd very much
like to better understand their position.

Actually I'm surprised you have not twigged it, but maybe it has been
poorly reported in the USA.

There are two strands.

One is that there are immigrants and descendants of immigrants who
find it hard to get employment. I'll make no comment on that.

The other is that people who do not fall into the first category
/currently/ take low or unpaid 'internships' in the hope of either
landing a job or building a CV.

Look at the second case carefully.
People are /currently/ working for squat with no job security.

They do it in the hope of getting real employment.

If an employer can get someone for nothing, sack them at will, why
should they employ more people and pay them a living wage
- if they can sack them at will (as they currently can) ?

It just does not add up.

I can't figure out why the French Government reckon that this is a
good idea, normally they are pretty joined up, but in this case it
looks as if they are deliberately picking a fight with everyone under
26.

It makes little sense from the point of view of the 'employer', you
can already get people for peanuts - and sack them at will.

I smell a rat - possibly this is a diversionary tactic.

I read a good book not too long ago called "Sixty Million Frenchmen
Can't Be Wrong".  It explains the French mindset.

@Nelson
- on a trivial point the population is below 60 million
- and there are more Frenchwomen than men

Have you ever gone there ?
- it is an interesting place, being from the UK I've seen a bit,
initially as a kid and many years later as a visitor - heck, business
meetings with Air France were memorable - their planning was
formidable.

They run things differently, but things look efficient.
- as an aside, they were pretty bright on Iraq, but my view is that
the UK Foreign Office felt the same way, but did not mind letting
Bliar and Shrub walk into a bear trap.

Now the really interesting ones are the Germans, I've lived there,
they look to me as if they are playing the long game.

http://en.wikipedia.org/wiki/France says the pop. is higher.

here's an article on the issue in current issue of Newsweek.

http://www.msnbc.msn.com/id/12113766/site/newsweek/

Here's your answer to your question.
Being bilingual, and having been to France, I am able to solve your
question. The French, by nature are a highly stubborn, stressed out
society. They live in a world where getting a decent job is 5 times
harder than in North America. French are all trying to find a place in
society, and are hard-pressed to find something that pays more than 10
euros an hour...which by French standards is barely even liveable. The
co-op programs which French move on to, after University, or
apprenticeship or what have you, lasts for two years. The recent
protest in Paris was because these students were against the fact that
the employer can legally fire (and many do) the students from their
co-op program perhaps a day before their co-op program has finished.
Thus, they go through 6 years of schooling for absolutely nothing, and
employers have NO right to be fire the students. Do not mix this up
with the torchings in Paris a couple of months ago. That was because
the foreign immigrants of France did not feel themselves capable to
mix in with society. The French government, in these regards, is
corrupt. They think that if they allow students to be fired (and may I
add they can be fired for absolutely no reason), there will be more
workers. Perhaps, they are right, but they won't have workers who are
technically 'accredited' to follow out the work in which they have
dreamed, and studied to do. They are being screwed out of their
future, and the people who are rendering their futures useless most of
the time have no reason behind what they are doing. I, as a Canadian
am all for the students, and the French government is corrupt, and
poor members of French society for having done this.

I can't find a good reference in English, but the new law extends the
probation period for employees under 26 years to two years.  During
this period they could be fired without notice or grounds.  As
Mecguerrier points out, the employers could use them long enough for
them to be productive and then let them go.
I don't know what the previous probation period was  - probably 3 or 6
months -  but probably a realistic period to discover if a person was
fit for the job before s/he was really productive.
The government  -  at least the Premierminister Dominique de Villepin
-  intended that the longer probation period would allow companies to
hire more young people, a group with very high unemployment, perhaps
naively assuming that once they had a job they would stay employed; or
perhaps less naively, just hoped that the move would reduce
unemployment statistics for a while.
Those protesting are obviously not yet employed and take the negative view,
I would venture to say, without recognizing that eventually they must
accept responsibility for making a success of their future, perhaps
being blind to their individual chance of beating the high
unemployment statistics.

One of the complaints is justifiable, that de Villepin put the law
through without debate in parliament.  Yesterday, President Chirac
announced that the law would be amended to reduce the probation period
to one year and require that grounds for dismisal be given.

 ****
This is based on my hearing of the news and a view of the Süddeeutsche
Zeitung online.  I hope it helps.
Myoarin

I saw something similar in Spain

They had two years as 'temps' before the really heavy Employers'
Social Security kicked in, so they would take people on for two years
and kick them out at the 11th hour.

Somehow I don't think that the protesting Air Controllers were worried
about their tenure - the French seem to have an inbuilt tendency to
protest, which is not necessarily foolish.
If today they knock on your neighbour's door at midnight, tomorrow it
could be yours.