France needs less red tape and more jobs.

France needs less red tape and more jobs.

France needs less red tape and more jobs.

Events beyond our borders.
Nov. 9 2005 3:08 PM

The French Eat Their Young

Paris needs less red tape and a lot more jobs.

In France, an economic system that eats its young
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In France, an economic system that eats its young

PARIS—In the two weeks of nightly rioting around France, some American pundits see an incipient religious war, while France's favorite celebrity philosopher, Bernard-Henri Lévy, sees a "suicidal, unprecedented tarantella."

In fact, those looking for root causes, beyond the death-by-electrocution of two teenagers fleeing the police, would do better to focus on a more mundane concern, namely employment.

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This may come as a disappointment to those who await the "clash of civilizations" as ardently as doomsday cultists await the apocalypse. But the fact that many of the rioters are from Muslim families is about as relevant as the fact that many of 1992's Los Angeles rioters had Baptist grannies.

Hormonal, alienated kids need good reasons not to set cars on fire, such as opportunities to lose. They have few: Among the young, immigrant men who live in satellite slums, unemployment reaches 40 percent.

While that's considerably higher than the still-dismal figure of 10 percent nationwide, there's more to this discrepancy than just racism and isolation. Among all twentysomethings, unemployment is a whopping 20 percent. And many of the jobs that do exist are sinecures, because French labor laws make it difficult and expensive to fire workers.

As a result, it's not just Arab and African boys who see little point in trying. The book Bonjour Paresse, by a young, white Parisian woman, was a runaway best seller last year. The title means "Hello Laziness" (it was published in the States as Bonjour, Laziness: Jumping Off the Corporate Ladder), and it's one long argument in favor of slacking off at work. Author Corinne Maier became an icon to fellow cubicle-dwellers, who recognized a principled point behind her tongue-in-cheek exhortations to "actively disengage" and "spread gangrene from within": The book is a protest against an ossified corporate culture in which people try to look busy while waiting out their jobs-for-life. Needless to say, Maier's company could not fire her even after she publicly detailed her total refusal to make an effort at work.

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The French riots should be a wake-up call, but not for pouring billions of euros into the banlieues, as measures announced today by Prime Minister Dominique de Villepin would do. A visionary leader would seize the chance to dismantle an economic system that is eating its young.

An obvious place to start would be to overturn labor laws that strangle private enterprise. The minimum wage is so high that it often exceeds the potential productivity gains of hiring a new worker, according to the Organization for Economic Co-operation and Development's 2005 Economic Survey of France. In other words, even if a prospective employee would increase your company's income by only, say, 1,000 euros a month, you would have to pay him more than that. (The minimum wage is 1,197 euros a month. Spread over four 35-hour weeks, that works out to 8.55 euros, or $10, an hour.)

Enterprise is hampered in other ways too. Companies that can't fire people are ultracautious about hiring. A complicated tax structure means that even the smallest firms must devote resources to tax accounting. Excessive licensing requirements in many professions keep out competition.

Red tape doesn't just hamstring economic growth. It also lends itself to racist implementation. The more bureaucratic gatekeepers job-seekers have to appease, the more likely it is that someone will sooner or later reject Mohammed in favor of Pierre. While French politicians lament the harshness of capitalism, the so-called Anglo-Saxon model is what allows American immigrant families to leap from corner grocery store to the Ivy League in a single generation.

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Removing the government's stranglehold on the economy, though, would eventually threaten France's elaborate social welfare system, which is not so much a safety net as a downy mattress complete with breakfast in bed. The portion of the French electorate that benefits from guaranteed short hours, six-week summer holidays, and early retirement has shown time and again that it is willing to vote against mathematics. These people would choose to keep paying themselves benefits until the ambitious have all left for London and the rioters have reached the Arc de Triomphe.

It's times like this that strong leaders need to step in and do unpopular things. Among his new measures, de Villepin announced tax breaks for businesses that locate in a "ZUS"—a "sensitive urban zone." That sounds like a good idea, but without fundamental labor reform, I doubt it will go far enough.

Mostly, de Villepin has announced things that will cost the government lots of money. Among the more curious is a promise that every ZUS inhabitant under 25 will undergo a personal "in-depth interview" at an employment agency, in which a "specific solution," such as an internship or training program, will be proposed. Bonjour Paresse author Maier, who holds degrees in economics and psychotherapy, is underemployed in a 20-hour-a-week job. Perhaps the state should hire her to work in a Clichy-sous-Bois employment center. I'd love to hear what she would tell her young charges about the future that awaits them, should they ever make it to the workforce.

The future is not entirely bleak. Traveling from the middle of Paris to the land beyond the périphérique, or ring road, has always presented stark differences. White people leave the train long before it arrives in all-minority burgs like St. Denis and Bobigny. But between calcified central Paris and the distant concrete towers, the city's truly multicultural arrondissements defy all attempts at ethnic categorization. On Rue du Faubourg du Temple, which divides the 10th and 11th wards, for example, Chinese, Sri Lankan, Arab, European, and Turkish shopkeepers have their businesses jammed up against one another. The neighborhood is pleasantly hectic and entrepreneurial, with buckets of cheap shoes and barking restaurateurs. It's an area where a Londoner or New Yorker could feel right at home.

Ironically, France has done a far better job than America of educating its underclass, thanks to a school system paid for with national rather than local funds. But the state has failed on employment, leaving students with skills and aspirations twisting in the wind. If the government would back away from its stranglehold on the economy, it wouldn't have to resort to barricades and curfews to keep the have-nots under control. Instead, they could get jobs, and their future would look less like a high rise slum and more like Rue du Faubourg du Temple.