Euro Crisis

Weird Euro Facts

Did you know that the average worker in 35-hour France worked longer than the average German? I didn't! But according to the OECD, it's so: 1,554 hours vs. 1,419 hours. I suppose the shorter German work year leaves the Germans more time free to lecture other Europeans about how lazy they are

Yet even the (marginally) longer French work year remains crazily structurally rigid. Result: those French who do work, must work crazy hard—even as one-fifth of the country is paid to do nothing at all.

Incoming President Francois Hollande seems determined to make the problem worse. Nicholas Sarkozy failed to end the 35-hour work week rule. But he did change the law so that overtime hours went untaxed—a huge incentive to all French to work longer. Hollande proposes to eliminate this dispensation. Worse is to come:

The move follows a number of other actions taken by the new government that have unsettled business leaders. The budget measures include scrapping a move by Mr Sarkozy to reduce employers’ heavy labour costs by shifting some of the financing of social welfare from employment charges to value added tax.

The supplementary budget includes €7.2bn in new taxes, including a big increase in wealth taxes, and €1.5bn in spending cuts. Mr Hollande has also reinstated the right of some workers to retire at 60, which Mr Sarkozy raised to 62, and given a small real-terms boost to the minimum wage, frozen by the former president.

Unemployed labor is usually modest in its pay requests. It ought to be easy enough to inspire France's many overstressed businesses to hire somebody extra to help out—unless the government almost doubles the cash price of labor by piling on payroll taxes. Which is what the French government has historically done—and what the new president seems intent on doing more of.

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David Frum

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