The Politics of Make-Believe; the Student Protesters in France Think That If They March Long Enough or Burn Enough Cars, They Can Make the Future Go Away. No Such Luck
Samuelson, Robert, Newsweek
Byline: Robert Samuelson
To anyone who cares about Europe's future, the French demonstrations and street riots protesting the government's new labor law must be profoundly disturbing. It's the French against France--a familiar ritual that mirrors Europe's larger predicament. Hardly anyone wants to surrender the benefits and protections of today's generous welfare state, but the fierce attachment to these costly and self-defeating programs prevents Europe from preparing for a future that, though it may be deplored, is inevitable. Actually, it's not the future; it's the present.
The dilemma of advanced democracies, including the United States, is that they've made more promises than they can realistically keep. Their political commitments outstrip the economy's capacity to deliver. Sometimes the commitments were made dishonestly. Sometimes they were made sincerely based on foolish assumptions. Sometimes they've been overtaken by new circumstances. No matter. The dilemma is the same. To disavow past promises incites public furor; not to disavow them worsens the country's future problems.
Look at France. Its needs are plain: to assimilate a large and restless Muslim population of immigrants and their children, to pay for the rising health and pension costs of an aging society and to compete in the world economy. But its economy is lackluster. From 2001 to 2005, annual growth averaged only 1.6 percent. By accident and design, the French have discouraged work. In a recent study, the Organization for Economic Cooperation and Development (OECD) in Paris reported the following:
^ From 1994 to 2003, unemployment among prime-age adults, from 25 to 54, averaged 9.9 percent; for those 15 to 25, the average was 24 percent.
^ In 2003, French workers spent an average of 1,431 hours on the job, the third lowest among 26 advanced countries. Italy (1,591 hours) was 11 percent higher, the United States (1,822 hours) 27 percent and South Korea (2,390 hours, the highest) 67 percent.
^ Among those 60 to 64, only about one in six have jobs. In the United States, the comparable figure is about one in two; for all OECD countries it's about four in 10.
This cannot continue indefinitely. In 2005, France's labor force was 2.7 times as large as its 65-and-over population; by 2020, it's projected to be only twice as large. France's policy is to have a shrinking share of its population, working short hours, pay for rising pension and health costs. In 2004, the average retirement age was 59. Average taxes are already about 50 percent of national income; effective marginal rates (the rates on additional income) can hit 60 percent. …