NCPA - National Center for Policy Analysis

MEN NOT AT WORK

October 30, 2006

No longer able to withstand the rigors of a normal schedule, the French had to cut back to a 35-hour workweek.  Six years later and it is costing the country hundreds of billions of dollars in lost output, says Investor's Business Daily.

The idea was peddled as a solution for France's high unemployment rate. With employees working fewer hours, businesses would be forced to hire more people. The problem, says IBD, is that with fewer hours worked, the state has been collecting fewer taxes. 

And in addition to a shortage of tax revenues, the measure has hurt productivity and economic growth, and worse, it has done next to nothing for employment, says IBD:

  • France's jobless rate continues to stagnate in the 9 percent area -- just modestly better than the 5 1/2-year high of 10.2 percent between March and May of last year, but not much.
  • And 9 percent is about where the unemployment rate was when President Jacques Chirac took office more than 10 years ago.

However, if France were serious about its jobs problem, says IBD, there are several measures it could take:

  • Slash unemployment benefits; the jobless in France are eligible for monthly checks worth as much as 75 percent of their former salaries -- and sometimes stay on for as long as three years.
  • Cut back on payroll taxes; at 28 percent of average salary, they're the highest among the 30 nations of the Organization for Economic Co-operation and Development.
  • Lastly, make it easier to fire underperforming workers -- it can take up to 100 days to get rid of an employee, which makes businesses hesitant about hiring because they fear they can't fire a worker for not doing his or her job.

Source: Editorial, "Men Not At Work," Investor's Business Daily, October 27, 2006.

 

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