May 07, 2017
The Washington Post has long pushed the view that a dollar (or euro) that is in the pocket of a middle-class person is a dollar that should be in the pockets of the rich. (They are okay with crumbs for the poor.) In keeping with this position, in its lead editorial today the Post complained about the “sclerotic statism” of the French economy. It then called for increasing employment, “through reforms of the labor code, not by protectionism or restriction of immigration.”
It is worth bringing a little bit of data to the fact free zone of the Washington Post opinion pages. France actually has consistently had a higher employment rate for its prime-age workers (ages 25 to 54) than the United States.
As can be seen, the employment rate for prime-age workers in France was roughly 2 percentage points higher in 2003. The gap expanded to almost 7 percentage points following the downturn, but it has in more recent years narrowed again to just under 2 percentage points.
France does have much lower employment rates among younger and older workers than the United States, but this is due to policy choices. College is largely free in France and students get stipends from the government. Therefore, many fewer young people work. France also makes it much easier for people to retire in their early sixties than in the United States, with largely free health care and earlier pensions. The merits of these policies can be debated, but they are not evidence of a sclerotic economy.
It is also not clear that the Washington Post’s desire to weaken protections for workers (euphemistically described as “reforms of the labor code”) will have a significant effect in reducing unemployment or raising employment. Extensive research has shown there is little relationship between worker protections and employment. It is also worth noting that the Post denounced protectionism in this editorial, but it is fine with protectionism in the form of ever longer and stronger copyright and patent protection, which benefit people it likes.
The most obvious reason that France’s employment rates have not returned to pre-recession levels is the austerity demanded by Germany, which it is able to impose on France through its control of the euro. There is little reason to believe that if France were able to spend another 1–2 percent of its GDP on infrastructure, training, and other forms of public investment, its economy and employment would not expand.
The Post is of course a big fan of austerity. Rather than acknowledging that a lack of demand is the main factor keeping workers from being employed, it would rather blame the workers for lacking the right skills.
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