France boasts the sixth largest economy by nominal GDP. It is the fourth largest importer and fifth largest exporter of manufactured products and the leading agricultural importer and exporter. It is the second most important outward direct investor in the OECD [Organization for Economic Co-Operation and Development]. And it is the most energy independent Western nation. They must all be pretty well off, right? No poverty there? If only it were so.
The French GDP per capita is 30% below the U.S. and smaller than most other European countries. The major problem is unemployment. France has one of the lowest employment rates of the OECD countries. In 2004, only 68.8% of the French population aged 15-64 years were employed. During that same time period, the rate in Japan was 80.0%, 78.9% in the UK, 77.2% in the US, and 71.0% in Germany. The employment rate of people aged 55-64 was 38.3% in 2007, and for the 15-24 years old, the employment rate was 31.5%.
These sub-par statistics are in part due to the too high minimum wages. They especially prevent young people from easily entering the workforce. Preparation at the university level is inadequate. As far as the older demographic, restrictive legislation and incentives for premature retirement are to blame. It has actually decreased 1.8% over the past two years but still holds to top spot in Europe.8 "Both the low employment rate (people at work are the more productive of the society) and the short working duration explain the artificially high productivity." Shorter working hours [one of the lowest of developing nations] and the reluctance to reform the broken labor market are the major shortcomings of the French economy, says the right. Many liberal economists believe that the main issue is structural reforms. The size of the workforce needs to be increased, and taxes need reducing. Keynesian economists, however, were behind 35-hour workweek legislation passed in the early 2000s, which failed to lower unemployment. [Wikipedia]
The youth, in the past couple of years, have lashed out. In November of 2005, the immigrant suburbs reached a breaking point. Gangs clashed with riot police forces, while the government called for peace. For three weeks France was ablaze with fury. Electrocution deaths in a Paris suburb two teenagers running from police sent the suburbs into a frenzy. Frustration and fury with their unemployed, uneducated plight fueled the flames. Then-President Jacques Chirac quelled the masses with promises of extra funding for housing, schools and neighborhood associations, as well as counseling and job training. The plans never got off the ground. The violence re-emerged in November of last year, sparked by the death of two teens whose minibike collided with police. This time, however, rioters had taken up shotguns and turned on police. It was a guerrilla war in the streets of the Val d’Oise area. The same frustration and anger with their economic state fueled these flames too. Add on the broken promises of President Chirac, and you have an inferno ready to consume everything in its path. It would die rather quickly however, under the increased police levels sent in by President Sarkozy. [NYT]
France's impoverished are running out of patience. These two minor incidents should have woken Europe up. Something needs to be changed. A powerful nation such as France should not have such an abysmal labor market and unacceptable unemployment rate.
[Sorry to cut off short, I must watch what's left of the debates!]
