France Labors at Folly

The Washington Times ^ | April 1, 2006 | Edward Hudgins

[Ed Hudgins]

by Edward Hudgins, Executive Director, The Objectivist Center & Atlas Society. ehudgins@objectivistcenter.org

We can always count on the French to show us how holding the wrong moral values and following the wrong economic policies will produce a comedie that becomes tres tragique.

Hundreds of thousands of students have been taking to the streets from Paris to Lyon demonstrating and rioting against a new labor law that will allow employers to dismiss without cause employees 26 years old or younger within the first two years of being hired. France has some of Europe's most stringent laws restricting the freedom of employers to manage their labor force. It's virtually impossible to get rid of workers who either aren't performing their jobs well or who employers simply can't afford to pay because demand drops for the goods and services produced by their enterprise. Not surprisingly, even when demand is high, employers will not hire costly workers because it would be extremely difficult to downsize if business is bad.

And costly they are. In France wages, labor rules and regulations are set by negotiations between the major unions, business groups and the government, that is, by corporatist collusion rather than voluntary contracts between employers and employees. The French government also mandates six weeks of paid vacation, lots of paid holidays and other benefits. Nice work if you can get it. The trouble is that 1 in 10 can't.

Not surprisingly, unemployment in France has averaged over 10 percent for the past 15 years, with the current rate at 9.6 percent. Private sector job creation has been almost non-existent. With France's population stagnant, you'd think the demand for labor would be high. By contrast, America's unemployment for the same period averaged just over 5 percent -- the current rate is 4.8 percent...

[proxy_user]

"And costly they are. In France wages, labor rules and regulations are set by negotiations between the major unions, business groups and the government, that is, by corporatist collusion rather than voluntary contracts between employers and employees.

Well, in that case, you'd have to be pretty dumb not to strike and riot to intimidate the opposing parties.

[Pittsburg Phil]

Te Frogs will go under in our lifetime.

[lexington minuteman 1775]

Socialism is a failed political system. Maybe one day France will realize that.

[Crispus Attucks Patriot]

Especially with a "military" like this!!!

[Ed Hudgins]

I love it!!!

[GSlob]

How French of them.

[Cicero]

Yes, very true. But to some extent, France is merely out ahead of us on the curve. We, too, have problems with labor regulation and unions. Our real unemployment rate is probably closer to 12% than 5%, when you factor in all those people who have "given up" looking for jobs or never looked in the first place. And we have an illegal immigrant problem too, although thank God not a Muslim illegal immigrant problem, so far.

How come our own system is encouraging millions of illegal immigrants to come in and do cheap labor, when we have millions of able-bodied people on welfare? (That's a rhetorical question; the obvious reason is that these two segments of the population can be relied on to vote Democrat.)

[Vicomte13]

You have touched on a truth tha makes people very angry, it seems.

France and America do not measure unemployment in the same ways, and have different social structures which skew the numbers severely.

For example: the incarceration rate, per capita, in the USA is 8 times the French rate. Which means, in a nutshell, that America IMPRISONS the bottom of its underclass for drug offenses and petty crimes which do not bring prison terms in France.

The result is more petty crime in France, to be sure.
But the result also is that the American unemployment figures are skewed. To compare with France, you would have to take about 1.9 million of the 2.1 million in American prisons, and put them on the streets where they would not have jobs, and THEN calculate the US unemployment rate. It would be several percentage points higher.

So, that "4.7% versus 9.6%" differential so often touted is not really comparing apples to apples.

[walford]

As members of a senile culture, the French have no understanding of basic economics. Most of their labor laws are geared toward RATIONING existing jobs. Just as they have no conception of wealth-creation, they cannot conceive of creating jobs either.

So they'd rather have no job at all than have one from which they can be dismissed.

And the welfare state creates a disincentive to work, so there is little motivation to contribute to the national economy. Every day those who do have jobs don't work in favor of attending these 'manifestations,' their goods and services become that much less competitive.

Thus the number of jobs available shrinks ever more.

[Vicomte13]

Not really.

French employment for 30 year olds and 40 year olds is practically full employment. The problem is bringing the young into the system: that's where the big bottleneck is.

There are many very competitive and profitable French companies on the world scene.

There are certainly problems in France, but the economy is not teetering on the edge of bankruptcy, or anything close to it.

[JasonC]

Horsefeathers. Our real unemployment rate when you factor in people who have stopped looking is the same as the headline unemployment rate - because the largely mythical category is a rounding error in the statistics, less than a tenth of one percent of the workforce. Gloom and doom mavens will seize on any quibble and lie about it shamelessly rather than admit for half a second that anything is going well, anywhere. The US economy is fine, best it has ever been, more jobs and higher wages, highest standard of living, the works. Stop whining like a crybaby - we are in the greatest boom in world history.

[Ed Hudgins]

Sorry folks, but the workforce participation rate -- percentage of working age population actually in the working or looking -- is, I believe, about 71 percent in the U.S. compared to only 62 percent in France. Long-term structural unemployment is far worse in France. And, as I mentioned in my article, America's population is growing rapidly and our job creation is keeping up with it.

Remember: the are no a infinite number of jobs that people compete for and immigrants don't on net throw others out of work. In a free market economy there are always things for individuals to produce or services that they can sell.

To the extent that the U.S. does have stupid labor laws, the labor markets suffer. And our welfare state is sending us down the moral as well as economic path of France. But we're still freer than France and thus are labor market is doing better.

[Cicero]

No need to get snippy about it.

The US has been fudging its employment statistics for a long time. It goes back at least to Lyndon Johnson, and probably further than that.

Probably France fudges its employment statistics as well. I was not saying that the American economy is as bad as the French, because I don't think it is. I was just pointing out the the figures cited in the article are questionable, and also that we may be headed in the same direction, if we don't watch out.

[Cicero]

P.S. There's a pretty good short article on fudging the numbers, "Shadow Statistics," at:

http://www.321gold.com/editorials/casey/casey033106.html

Note that the two chief culprits in fudging employment numbers appear to have been JFK and Billyjeff clinton.

As I said, I'm sure the French fudge their numbers too, probably worse than we do. I'm just not as familiar with their numbers.

[JasonC]

We aren't headed in the same direction. You are simply making up lies, trying to pretend there is some political crisis to be manufactured or imagined in the state of the US economy, which is utterly fine and has been for ages. Out of nothing more than in ingrained habit left over by a century of socialist drivel hyper-politicizing anything economic, as part of their insane desire to stir class conflict to serve their ambition.

The US economy is fine. It is the best in the world. It has made all of us fabulously well off by all historical standards, nearly effortlessly, and despite endless counterproductive meddling. Look up graditude in a dictionary sometime.

[JasonC]

(self directed)lol - or gratitude.