As France goes through another day of protests, the coverage in the US press is so appallingly bad that I thought I’d take advantage today of my posting rights to give you another version, to explain what’s described as irrational behavior by the French.
Let me say it as directly as I can: most of the coverage I have seen is either wilfully ignorant or purposedly lying, and they repeat a number of falsehoods about the French labor market that are, quite simply, shocking.
Let me try to correct the record.
Again, this should preoccupy you guys, because the underlying message is: progressive economic policies are failures, and only further “reforms” (read pay workers less and give them fewer rights, bust unions and cut taxes to corporates) will work. If even Us progressives buy that (as evidenced by a number of comments on my threads at the Orange place), what hope is there to change things?
Today’s culprits:
The LA Times (Rift Emerges Among Young Haves and Have-Nots in France)
The NYT (Four Ways to fire a Frenchman)
The Guardian (De Villepin stands firm on law as France heads out on strike)
Here are some of the lies they are spewing:
Riots are ongoing
It would seem, reading the US press, that Paris is burning (again). It wasn’t last October, and it isn’t now. Most demonstrations are peaceful, family affairs – people exercising their democratic right to free speech and demonstration.
These rallies have been marred, on the sidelines, by very small groups of criminals that take advantage of the crowds to steal form people and to attack the police form the safety of the crowds. These are still isolated incidents, despite all the images you may see – and they have very little to do with the protests themselves.
The protests are not violent, and they can in no way be described as riots. Go and read Alex at Toulouse‘s diary over at eurotrib: he was in one of the protests himself and took pictures. See for yourselves what most demonstrations look like.
The youth unemployment rate is extravagantly high
I’ve already written about this, but would like to be even more explicit about this. The unemployment rate for the under 24s in France is indeed 23%. But you have to remember that the unemployment rate is the ratio of unemployed to active population (i.e. those working or seeking work). Counted as a ratio to the overall youth population, unemployment is only 8%, just like in the UK or the US.
The right column id the proportion of youth that are unemployed (as a fraction of the whole age class). The left column is the employment rate: the proportion of youth that work. It is much lower in France, but this is explained to a large extent by the fact that a lot of the youth are students, and they do not need to work to pay for their studies.
See this graph: that’s the portion of youth that have to work while being students.
Students are not “active” in France, and thus the active population is higher, and thus the unemployment rate appears correspondingly higher even though the number of youth unemployed is no higher than, say, in the UK.
That makes the whole “France is in crisis” much less convincing when you start comparing 8.1% to 7.6%, right?
Note, US numbers can be found here:
Employment rate: 66.2% (as comapred to France’s 30.4%)
Unemployment rate: 11.3% (as compared to France’s 23%)
Unemployed: 7.6% of the total number of under-25s (as compared to France’s 8.1%)
It’s impossible to fire people in France
The biggest lie that’s been spouted is that it’s impossible to fire people in France. That’s simply untrue.
The NYT article is shamefully wrong on substance, and I encourage you to read the thorough debunking done by afew here
Here are a few more facts.
From Jean-François Couvrat, a labor market expert
(my translation)
Eurostat indicates that the main indicator to assess the flexibility of a labor market and the mobility of workers is the proportion of workers who have been in their job for less than 3 months. That proportion is 6.7% in France, higher than in the UK and than the 4.9% EU average…
From Blanchard (a well known MIT economist)(pdf):
The labor market is characterized by large flows–high rates of separations from firms, and high rates of hires by firms. In France for example, 1.5% of all jobs are destroyed each month and roughly as many are created– interestingly, this is about the same percentage as in the United States. As there are many reasons other than job destruction why a worker may separate from a firm, the flows of workers are typically much higher. In France, they are of the order of 4% per month (Pierre Cahuc and André Zylberberg 2004).
So France churns jobs just as fast as the USA. How’s that for “flexible”?
France does not create jobs
This is simply untrue, again. From the above Couvrat article:
French companies never stop creating jobs. In 1993, the worst recession year in a long time, they hired 3.6 million people; the number was 4.8 million in 2003, a year with weak growth, and 5.4 million in 2000, a boom year.
More striking, according to the OECD, France has actually created more jobs than the supposedly flexible UK and UK economies! (click for bigger – “Royaume-Uni” = UK, “Etats-Unis” = USA))
or this:
The full line is the total number of jobs; the other is the total number of hours worked. They both grew at a record pace precisely during the 3 years when the 35-hour week law was put in place (it is widely credited (pdf, in French, with abstract in English) with having created 300-500 thousand jobs) and the socialist government put in place a jobs programme for the youth – both measures have been since cancelled by the right wing government which, strangely enough, came to power in 2002.
So France actually created more jobs than the USA in the private sector, and more jobs both overall and in the private sector than the UK – precisely at the time when supposedly irrational measures like the 35-hour week were in force.
So, please, be extremely careful when you read article about the “rigidity” of the labor market, the “jobs for life”, and the unwillingness of French companies to create jobs. Most of it is, quite simply, untrue.
This is not to say that everything is perfect, far from it, but the problem is much smaller than everybody (including in France!) is led to believe.
Students are “privileged activists”
One of the nastiest narratives in that context is that presenting students as “privileged” people trying to keep their “lifetime employment” away from the banlieue immigrants (see the LAT article for that line). Nothing could be further form the truth. University students are low or middle class (the privileged go to the separate – and really elite – Grandes Ecoles system), and they are the main victims of today’s existing labor flexibility.
The real problem in France is that you do have an insider/outsider system. Students (like older people thrown out of companies when they lay off) are outside, and the new law keeps them even more on the outside. They already have the temp jobs, the short term jobs, they are already the first ones to be fired when companies get rid of workers. They already provide all the flexibility the system needs (and has, as pointed out above).
One solution would be to make everybody bear the flexibility, i.e. make it as easy to hire and fire middle aged males as it is for youth. That’s where everybody is pushing, and IT DOES NOT WORK in practise. The other solution is to bring back the youth into the fold, by giving them more stable prospects, like the Socialist Prime Minister Jospin did with the youth jobs programme in 1997 (5-year contracts to work in the social sector, i.e. help in schools, associations, NGOs, libraries, etc..) – it demonstrably worked.
The new jobs contract will help immigrants
The flip side of the argument about the “privileged” students is that they are keeping jobs away from the poor oppressed immigrants. No. They are in the same situation, and the banlieue youth are even more against the new contract, because it will make it even easier to discriminate against them. No restrictions to firing in the first two years means including for reasons of race, opinion, gender, etc…. Be fully compliant or you can be fired at any time, and get fired anyway after 2 years because who will give you a fully protected status then when they can fire you and get a new compliant kid instead. Lots of jobs don’t require such skills that you cannot be replaced easily by an equally well trained kid.
So please, please do not believe all these articles that say that French students are fighting a pointless battle against reality and globalisation, that France is hopelessly rigid (and violent) and its workers shamefully protected and that this reform is “necessary and useful”. It is neither.
This is an ideological fight. It’s a fight of the progressives against the relentless march of the logic of focusing only on short term corporate profits.
