And one that's worth considering.
Is Wal-Mart the Answer to France's Problems?: The Naked Economist - Yahoo! FinanceSounds good, doesn't it? However, there's a downside. The American 'McJobs", characterized by low wages and benefits are pretty well knocked in Europe. And there's not many of them, especially in France.I recently found myself asking a fairly bizarre economic question: Would the disaffected youth torching cars in France be happier if they could get jobs at Wal-Mart? If you think I'm kidding, I'm not.
France and the United States have two distinct "flavors" of capitalism. The U.S. has the more "Wild West" version. Our economy is relatively unregulated compared to a place like France. We promise our citizens fewer benefits than the French. We offer our workers and firms less protection. Our government meddles less in how businesses operate and our overall tax burden is significantly lower.
The French have the more coddling flavor of capitalism. Citizens receive more benefits from the state, such as guaranteed health care. Workers have far more expansive benefits: Longer maternity leave and vacations, higher minimum pay, and the government has capped the workweek at 35 hours. Perhaps most significant, French workers have extraordinary job protection. Once hired, they're hard to get rid of.
The French have effectively banned McJobs by requiring employers to be more generous. The unfortunate result is not middle class comfort for all. Often, it's no jobs.And so will overall jobs.Companies That Can't Fire Don't Hire
The reason has to do with an economic concept called "marginal product of labor", which is a fancy way of saying that firms will not voluntarily pay you more than you're worth. If Wal-Mart believes that you add $5.15 an hour to the bottom line by stocking shelves, and you demand $8, the manager will politely point to the exit. If you don't have any skills that are worth more than $5.15 an hour to some other employer, you won't use that exit. You'll take what Wal-Mart is offering. McJobs tend to pay workers what they're worth, which, sad though it may be, is not always a living wage.
The French alternative -- admittedly oversimplified -- is to require that firms pay low-skilled workers more, whether their productivity justifies it or not. If an employee adds $5.15 an hour worth of value to a firm, the government might require the firm to pay him $10. As you can imagine, firms are not keen on paying someone $10 an hour for $5.15 worth of work, not even in France. The best business decision in that case is to hire no one at all.
French policies compound the problem by making it hard to get rid of workers once they're hired. The result, to stick with the retailing theme of the column, is like a department store that doesn't allow returns. True, no merchandise will come back. But consumers will be much more cautious about what they buy in the first place. Overall sales may well be lower.
The wierd thing about the two systems - once you get into a job in France, you've darn near got it for life. Very much like a union-supported job in an auto or aircraft plant - doesn't much matter how badly you perform, you'll have the job for life... juntil your plant closes because it's not competitive.) The unions approach the French system - yet industries which have tried implementing the French methods (like the steel industry - my father in law worked for a steel mill near Sharpsville, PA, and one year had a 3-month vacation with pay... and another two years later... and then the plant closed because it wasn't economical...) tend to have problems. The pay's great, for a few, until the business folds.
Wallmart doesn't pay well - yet it pays a lot of people. A LOT of people. And if you dont' like working at WallMart, you can either learn and move up in it (my brother said he's had opportunities, but turned them down) or take the skills you've learned and go elsewhere that pays more.
Funny thing is - nobody's locked into a minimum wage job. There's no government agency that comes along and slaps you on the head and forces you to keep a job that doesn't pay well if you want to boogie onto something a bit more fiscally rewarding. (Used to work in a bookstore for near minimum wage - enjoyed the people and the job but I finally looked at where I was and how much I was getting paid, and thought that this just didn't cut it. So I found a better paying job.)
If you've got the skills, and the drive, you can end up doing pretty well in the job market. If you've got the drive and aptitude, you can learn the skills. If you've got the drive, but no aptitude, you can find something you're good at. If you've got no drive - you end up at WallMart cleaning toilets.
The unemployed in France don't need handouts, they need jobs. But it'll take a major revision of the French capitalist philosophy (as well as their labor laws) to get them those jobs. As it is, in France there's apparently no bottom rung to the ladder of success. And you can't climb that ladder without getting on it.
J.