NCPA - National Center for Policy Analysis

AMERICAN ADVANTAGE

March 22, 2006

While French youths are rioting over a proposal that would actually help them get work, U.S. college graduates are about to enter a hot job market. Could it be, asks Investor's Business Daily (IBD), that the French system is a failure?

An anti-market, welfare state has not served France-- or any other nation for that matter -- well. The French economy has grown a paltry 1.6 percent a year since 2001. That's stagnation, says IBD.

Being unencumbered by the grip of cold, unfeeling capitalism, the French have been able fabricate rights, among them the lifetime right to a job. As a result, firing incompetents and underperformers in France is nearly impossible.

That restriction, of course, puts French companies at a disadvantage, says IBD:

  • Their incentive to hire is undercut because they know that if they hire the wrong person, they cannot fire him or her and replace that worker with someone better.
  • So rather than take a chance at being stuck with a poor worker, they don't hire at all.
  • The inevitable effect of a private sector that can't meet its employment needs is an economy that is chained to the deck.

Consequently:

  • The jobless rate in France is 10 percent, more than twice as high as America's 4.8 percent.
  • It's even higher among workers younger than 26, an unbelievable 23 percent.
  • In the industrial suburbs of Paris and other cities, filled with disaffected Muslim youths, joblessness soars to 50 percent or more.

Give credit to French Prime Minister Dominique de Villepin for proposing a change in the law that would let employers fire workers who are younger than 26 without reason during the first two years of their employment. That would break the logjam and give employers an incentive to hire the young, says IBD.

Source: Editorial, "American Advantage," Investor's Business Daily, March 21, 2006.

 

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