NCPA - National Center for Policy Analysis

Unemployment Behind Victory Of French Socialists

June 4, 1997

Some political analysts contend that the high rate of unemployment in France handed the country's Socialists, Communists and allied parties their recent victories at the polls. Interestingly, unemployment in France has followed an upward course over the past 16 years, while in the U.S. it has trended downward over the same period -- to its lowest level in a quarter of a century.

  • In 1981, new governments took over in both countries -- the Socialists under the late Francois Mitterand in France; the Republicans under Ronald Reagan in the U.S.
  • At that time, unemployment in both countries was almost identical -- 7.4 percent in France and 7.6 percent in the U.S.
  • Although there have been fluctuations in unemployment rates in both countries since then, the overall trend has left the unemployment rate in the U.S. at only 4.9 percent -- while it has climbed above 12 percent in France.

Following the Reagan tax cuts, the U.S. economy moved into a long period of growth which pushed the unemployment rate down to 5.5 percent in 1988. Unemployment began to rise early in President George Bush's administration, reaching 7.5 percent in 1992, when Bill Clinton won the election.

In France, the left pursued contradictory economic policies in 1982. When growth slowed, unemployment shot up sharply -- to 9.7 percent in 1984. With unemployment racing toward 12 percent, voters elected an overwhelmingly conservative Parliament in 1993 and Jacques Chirac as president in 1995.

Chirac promised to reduce unemployment but became entangled in new austerity measures to meet targets for the euro -- the new European common currency. These policies led to even higher unemployment, which combined with resistance to curtailing France's cradle-to-grave social insurance undid the conservatives.

France's problems extend beyond contradictory policies, however. The French suffer exorbitant taxes on labor, and myriad regulations that restrict employment. Some of the leftists' proposals to reduce unemployment are, in one observer's words, bizarre. They may do little to advance people's right to earn a decent living, and could turn out the new government just as they turned out the old.

Source: Robert Eisner (Northwestern University), "A French Lesson," Wall Street Journal, June 4, 1997.


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