;)
EuroSlumber?
Monday, November 13, 2006 at 2:17PM 
China's growing like crazy. India's doing great, thank you. Even the US is keeping its head above water with a 3% GDP growth rate (for now -- but keep an eye on real estate in the US).
But Europe? Pretty anemic. France, in particular, has been underperforming with a GDP half of that of the United States. Its recent quarterly economic numbers were far under expectations. What's going on?
In the past, I've dreamed of living in France where work weeks are short and vacations are long. But I'm beginning to believe that the labor market does need to be more fluid, to add more jobs at the bottom, where underemployment is high, and to give businesses more flexibility in shedding costs. This is not to say I think France -- and by extension, the EU -- should shed its pro-worker mindset. Instead, I propose that it SHIFT its mindset. Invest in workers to allow them more employability. Get training: get a tax break. Switch jobs: get a tax break.
This amounts to shifting revenues from the state to the companies whose capital is being freed up, but in the classic economist's point of view, the capital is better when held privately than when held by the state. And to an extent, that is true. Certainly it is better, in my view, to invest in worker so they can grow and have more freedom of choice, than to structure a society where people hate to leave their jobs -- in fact, would be punished by a sluggish job market if they DID leave their jobs -- and where the majority of young people aspire to work for the state. Public service is good, don't get me wrong, but I read this trend more as job risk aversion.
Europe's safety net is far better than America's in most regards. I hope the conversation about job security in France changes so it can take advantage of that safety net even as people embrace change, look for new careers and take advantage of the business nimbleness that comes from a fluid jobs market.
What do you think?
Reader Comments (1)
Fascinating discussion amongst economics junkies on the issue of the recent housing boom in the United States. A lot of commentary on a report from the Fed that concludes (?) the boom was not primarily caused by low interest rates. Check it out http://economistsview.typepad.com/economistsview/2006/09/what_caused_the.html" REL="nofollow">here.