miércoles, febrero 21, 2007

Segolene Royal II

Johnny Munkhammar explica con detalle como las propuestas de Royal serían la puntilla del ya de por sí esclerótico mercado laboral francés.

The Socialist candidate for President of France, Ségolène Royal, recently presented her Election Manifesto with 100 proposals. It includes an increase in the minimum wage, higher taxes, more regulations in the labor market, expanded public welfare contributions, subsidised jobs for the young and nationalisation of companies. She promises to fight globalisation and free-market reform.

This is a candidate for President - who might very well win - in a country that experienced weeks of riots in its capital little more than a year ago. The current President concluded that France suffered from a profound "malaise." In short, they have many great economic problems, which they share with several countries in Western Europe. And Ms Royal promises not only to protect the current model, but also to do more of the same.

It is true that unemployment is down a bit in the EU, and in the euro area, at the moment. At 7.5 per cent, it is the lowest in a long time.

That said, these employment figures would be worrisome in other western countries, such as the United States. And the figures for unemployment don't show the whole picture. There are at least as many people of working age as the formally unemployed that don't work, but they are called something else, like early retired. The total number of people who are excluded is very high, and they are so for a long time. This is especially true for young workers and immigrants.

What's more, a comparison between the more free-market US, and the EU, is revealing. The share of the working-age population employed in EU countries is only 64 per cent; in the US, it is 72 per cent. In 2004, only 13 percent of unemployed workers in the US were unable to find a new job within 12 months; in the EU, the figure was 44 percent. In the EU, average youth unemployment is 17 percent. In the US, it is 10 percent.

And some of the most interesting comparisons can be made within Europe itself. Youth unemployment is above 20 percent in Greece, Italy, Sweden, France, Belgium, and Finland; but it is below 8 percent in Ireland, the Netherlands, and Denmark.

In the EU's 15 member states, between 1995 and 2004, the change in employment rates was also very different among countries. In Ireland, the Netherlands, and Spain, the increase in employment was the highest; in Germany and Austria, it was almost zero.

What yielded these differences? Labor markets are substantially freer in the countries that succeeded in creating new jobs. Payroll and income taxes were more than 10 percentage points lower in the five best economies (in terms of job creation) compared to the five worst. And the levels of contribution from the state for unemployment and sick leave were lower in the best economies.

This should not be a surprise. In recent years, the OECD has published a number of studies that confirm these correlations in its member countries. Government interventions in the labor market produce serious negative effects in terms of unemployment, especially among young people and immigrants. There are numerous academic studies that confirm this.

In the newly published "2007 Index of Economic Freedom" (Heritage/Wall Street Journal), there is a new category called Labor Freedom. It measures the degree of a number of regulations in the labor market on a scale from 1 to 100, and the 41 European countries score between 45.4 and 99.9. The differences are substantial. Countries with a high score, and a relatively free labor market, tend to be more successful in terms of employment.

Combined with the other factors of economic freedom, the correlation is even stronger. The freer a country's economy is, the wealthier it is - and unemployment is lower. When Ms. Royal gambles with populist policies that do in the opposite direction, she is playing with fire - literally.

Johnny Munkhammar is Program Director of Timbro in Sweden. He is the author of "The Urgent Need for Labor Freedom in Europe - and the World" in the "2007 Index of Economic Freedom."


Blogger Demócrito said...

La pregunta es: ¿realmente impondrá este programa o es el medio que va a utilizar para llegar al poder? No olvidemos que las elecciones a la presidencia de la república en Francia son a dos vueltas, lo primero por tanto es conseguir vencer a candidatos como Le Pen y que no se repita el fiasco Jospin. Lo sensato sería actuar como el PSOE en sus dos primeras legislaturas, donde trataba de dar una imagen socialista y mientras tanto procedía a flexibilizar el mercado de trabajo (acuérdense de la ruptura UGT-PSOE)
Si no es así, creo que Royal va a intentar apagar el fuego con gasolina. Veremos.

11:35 a. m.  
Blogger Mislata said...

Buena aportación Democrito.

Obviamente no quiere que le pase lo mismo que a Jospin, con votos yendose a partidos trostkistas que acabaron con LePen en la 2º vuelta y Chirac de Presidente por goleada.

El problema es que mandas mensajes equivocados a la ciudadania, la cual especialmente en Francia necesita que alguien le hable con franqueza, le diga lo que no quieren oir, y le ponga el espejo delante de la cara. Ademas de que se refuerce la idea de que los politicos incumplen siempre sus promesas

Mas al respecto:

1:04 p. m.  

Publicar un comentario

<< Home