The Economist – wrong on France
Take a look at this. It’s from a recent (March 2017) leader in The Economist on France:
It makes some very bold statements, among other things that:
- ‘its vast state, which absorbs 57% of GDP, has sapped the country’s vitality’
- ‘a quarter of French youths are unemployed’
- ‘living standards are stagnant’
- these problems have been built up over decades’
But none of these statements is true.
First, French productivity, even after adjusting for its higher unemployment, is the best in the world and has been so for decades.
Secondly, French youth unemployment is not 25% as a percentage of the age cohort: it’s 4% for 15–19 year olds and Chart 4 shows it’s 13% for 20–24 year olds
That’s higher than for some rich countries but it isn’t a quarter of the youth population. (It’s about the same as the UK for example).
Thirdly, living standards are not stagnant. In fact they’re been rising very sharply in the last decade:
We might add that: (fourthly) its age dependency ratio is in better shape that most other rich countries because it’s working age population is growing, (fifthly) its healthcare system rated the best in the world by King’s Fund and (sixthly) its education system is considered to be the best in Europe for science and technical education. Seventhly, its public debt and budget deficit is lower than in the US, UK, Italy, Japan etc, (eighth) household savings are very high, (ninth) the trade position is in balance and (tenth) life expectancy is among the highest in the world.
Of course it’s true that registered unemployment among prime age adults is high at 8% but its labour participation ratio at 88% also much higher than other countries. If you add prime age adults who are not in the labour force (19% in the US!) to the registered unemployed (who are) you can see that France’s true unemployment is actually lower than America’s and only 3% higher than in the UK or Japan for example.
We need to get the facts right – not because France is better than anywhere else – but because if we want to make sensible investments (and policy) we need to need to follow the evidence, and not our own preconceptions.