Unemployment in France

When one looks at any aspect of society in France, one sentiment immediately rises to the surface, France will be France. The French just do things differently. And the issue of its chronically high unemployment rates is a case in point. The issue is not rooted in the whims of the French national and world markets or the political realities of the moment. It is, instead, rooted in French culture itself.

With the French Revolution, France, following the lead of the United States, became a pioneer of democracy. However, in that time the political structure has never been stable for very long. Indeed, since the French Revolution of 1789, France has had five republics with 15 constitutions. (Maqstadt 128) That being said, from Robespierre to Napoleon to Charles De Gaulle, the French have never left behind, at least never for very long, the public reliance on a strong central executive authority in a government that would constantly intervene and play a big part in the economy. The French call this dirigisme and despite brief departures from this tradition, it continues to this day in varying degrees throughout the French economy. (Maqstadt, pg.137, The Economist 2009) So much so “that the French idea of ‘national solidarity’ is tied to this dirigiste policy.” (MacArthur, 2006). The result is a large welfare capitalist state funded by high tax revenues and heavy social-security contributions making the public very dependent on the government in their daily lives.

An unfortunate side effect to this is the issue of French labor and chronically high unemployment figures. Indeed, over the years France has been plagued with high persistent unemployment to such a degree that the percentage of unemployment rarely dips below 8% even in good times (The Economist, 2009) In light of the current economic outlook, the numbers look even more troubling despite attempts to say otherwise (The Economist 2009). In the first quarter of 2009, 187, 800 jobs were lost. And this was after a troublesome year in 2008 where 30, 600 jobs were lost in the fourth quarter and 14, 500 in the third quarter. Young workers have been particularly hit hard with unemployment for workers under 25 at 21%. In heavily Muslim communities the rate is double that.

Plus, over the long term, these high unemployment rates are taking their toll on the economy. Over the 20 years, the number of jobs in industry has dropped by about ¼ %, going from 4.6 million to 3.5 million. (Barroux & Rey-Lefevre, 2009)

Further, the usual government method of taxing employers and employees with such heavy social-security contributions deters firms from creating jobs. This makes the funding of the welfare capitalist state increasingly difficult if not impossible as the demands of their much touted health care system, unemployment benefits and other public services increase draining the coffers and tax and contribution revenues needed to refill the coffers increasingly decrease.

In sum, the French government has two choices, cut benefits in the welfare state or raise taxes even higher for those who are still working. Both solutions are unwanted by French voters. But the French cannot have it both ways.

Sources:

1. Magstadt, Thomas M. Nations and Governments. Belmont: Thomson/Wadsworth, 2003

2. MacArthur, John R. “In Defense of French Dirigisme.” Harper’s Magazine 10 April 2006

http://www.harpers.org/archive/2006/04/InDefenseOfFrenchDirigisme. Accessed 9 April 2009

3. The Economist. “The French Model: Vive la Difference.” The Economist 7 May 2009

http://www.economist.com/world/europe/displaystory.cfm?story_id=13610197.

Accessed June 9, 2009

4. Barroux Remi and Rey-Lefevre Isabelle. “L'emploi salarié s'est effondré au premier trimestre 2009.” Le Monde June 11, 2009

http://www.lemonde.fr/economie/article/2009/06/11/l-emploi-salarie-s-est-effondre-au-premier-trimestre-2009_1205472_3234.html#ens_id=1115932. Accessed on June 11, 2009