NCPA - National Center for Policy Analysis


November 8, 2005

The French political response to the continuing riots has focused most on the need for more multicultural "understanding" of, and public spending on, the disenchanted masses in the country's grim banlieues (suburbs). What has been largely ignored has been the role of France's economic system in contributing to the current crisis, says author Joel Kotkin.

State-directed capitalism has limited opportunities for immigrants and their children. In a country where short workweeks and early retirement are sacred, there is little emphasis on creating new jobs and even less on grass-roots entrepreneurial activity:

  • Since the 1970s, America has created 57 million new jobs, compared with just four million in Europe -- most of which were jobs in government.
  • In France and much of Western Europe, the economic system is weighted toward the already employed (the overwhelming majority native-born whites) and the growing mass of retirees.
  • Those ensconced in state and corporate employment enjoy short weeks, early and well-funded retirement and first dibs on the public purse.

So although the retirement of large numbers of workers should be opening up new job opportunities, unemployment among the young has been rising:

  • In France, joblessness among workers in their 20s exceeds 20 percent, twice the overall national rate.
  • In immigrant banlieues, where the population is much younger, average unemployment reaches 40 percent, and higher among the young.

To make matters worse, the elaborate French welfare state -- government spending accounts for roughly half of gross domestic product (GDP) compared with 36 percent in the United States -- also forces high tax burdens on younger workers lucky enough to have a job, largely to pay for an escalating number of pensioners and benefit recipients.

In this system, the incentives are to take it easy, live well and then retire. The bloat of privileged aging blocks out opportunity for the young, says Kotkin.

Source: Joel Kotkin, "Our Immigrants, Their Immigrants," Wall Street Journal, November 8, 2005.

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