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A Tale of Two Countries |
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Written On: November 18, 2005 |
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As the smoke begins to clear over cities and towns throughout France, people across the globe are carefully studying what caused tens of thousands of young people to riot.
Since the rioting began October 27 in the banlieues, the poor and immigrant suburbs of more than 200 communities across that nation, at least a dozen schools and thousands of cars have been torched causing millions of dollars in damages. And although 1,500 have been arrested, remarkably only one has died in the violent disturbances.
The rioters, most of whom were young Muslim immigrants from North and West Africa, took to the streets to protest the deaths of two youths who were accidentally electrocuted while hiding from police they thought were chasing them. That incident was merely the spark which ignited the powder keg of discontent which was destined to blowup.
Muslims comprise roughly 10 percent of France’s population, and the unrest started an intense debate about how that nation treats its non-European minorities. French President Jacques Chirac talked about the need for diversity and announced a new civil service corps that would pay volunteers a minimum wage or stipend, as well as subsidies for transportation, housing and food.
The riots, said Chirac, were proof of a "profound malaise" in the country, and that France was in the mist of a "crisis of identity."
While that may be one way to look at it, Chirac’s views are akin to the Dutch boy trying to plug a leaky seawall with his fingers.
Muslim youth in France are not upset about religious differences and they don’t need sensitivity, subsidies or stipends. Like all of us, they need jobs. But France’s labor laws make it almost impossible for them to find work.
French labor law is based on the Continental model, which seeks to “temper” capitalism with worker protections. France has a high mandated minimum wage ($6.79 per hour) and costly work rules that make it almost impossible to fire someone. Consequently, employers hesitate to hire people – especially low skilled or undereducated applicants. They are too expensive to train and almost impossible to fire if they don’t work out.
Those government policies hit young people and immigrants the hardest, and that fact is reflected in the employment numbers. While France’s unemployment rate is 9.6 percent, almost double that of the U.S., the unemployment rate for young people is 21 percent. Among Muslims in the banlieues, it is a whopping 40 percent. To put that in perspective, the U.S. unemployment rate during the Great Depression was 25 percent.
In essence, France’s labor laws have created a permanent underclass whose members are without hope or opportunity.
Contrast that with the United States. According to a study by the Harvard Business School, large numbers of immigrants and their businesses often spark job growth and salaries in American inner cities—benefits that ripple throughout the broader economy.
In his study, Professor Michael Porter found that the 5.5 million immigrants who live in America’s inner cities are key catalysts to economic growth and urban investment. For example, job growth in ten U.S. inner cities with high immigrant populations—including Seattle—outpaced job growth in the surrounding metropolitan area. In fact, inner-city businesses in the 100 largest U.S. cities created 8.1 million jobs – 8% of the total U.S. private employment.
Small businesses are America’s job engine, creating the lion’s share of all new jobs. But small businesses are the most vulnerable to onerous and expensive work rules. And in the U.S., those regulatory costs are skyrocketing. In 2004, regulations cost American employers more than one trillion dollars – money that could have been used to increase salaries or hire more employees.
Make no mistake, immigrants and unskilled minorities face major challenges in the U.S. But unlike France, in America, it is still possible for immigrants to work hard, find opportunities and realize “the American dream.”
Legislators who think America needs more regulations to protect jobs and help workers should look at the columns of smoke rising over French towns, and think again.
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