NCPA - National Center for Policy Analysis

France Suffers From Old Economics

August 7, 1997

While Britain under Margaret Thatcher adopted free-market principles and collects its economic rewards today, France stubbornly clings to out-moded socialist policies and suffers one of the highest unemployment rates in Europe -- 12.5 percent and rising. In industrial Lille, textile mills have closed and the unemployment rate is 14.6 percent.

Consider the burdens France continues to inflict on its stumbling private sector:

  • Employers must guarantee workers long maternity leaves and five weeks vacation, minimum.
  • Workers even get subsidized child care and subsidized lunches.
  • The new Socialist government has raised the minimum wage 4 percent -- to the equivalent of $6.20 an hour -- and is promising to add new controls to make it even more difficult to lay off employees.
  • Moreover, the government is talking of cutting the 39-hour work week to 35 hours, without any loss in worker pay -- even though this will surely send unemployment even higher.

Meanwhile, businesses are closing or moving to neighboring countries and office towers stand vacant. The mayor of the city of Lille, a former Socialist prime minister, says that French people "wouldn't stand for what Mrs. Thatcher did in Great Britain. It's inconceivable."

In Britain, the unemployment rate is 5.8 percent.

Source: Douglas Lavin, "The French Recipe: Perks, Opera, Art, 14.6 Percent Jobless Rate," Wall Street Journal, August 7, 1997.


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