Wednesday, April 05, 2006

French Economics

My lesson plan for the day included showing part of a video on the Vietnam War to each of my five 20th century US History classes. I had to rewind the tape as each new group filed in. I watched the VCR’s on-screen display of footage while Fox News was on in the background. Watching over my shoulder, my students were fascinated by live coverage of French students throwing bricks and stones at riot police in downtown Paris. Fox’s correspondent was in the middle of the melee as demonstrators threw balloons filled with paint as police used Plexiglas shields to protect themselves and many were covered in yellow. Occasionally police would grab a hold of an unruly young man and subdue him as he writhed against their grip. Other police would surround the officers holding him down and it appeared they were stomping on him. We couldn’t be sure since the camera’s view was obscured. My students were quite interested so I let them watch a bit longer after finding the right place on the videotape.

“Are the police kicking him?” a student would ask in each class.

“I’m not sure,” I’d say. “What do you think?”

“It looks like they are,” some suggested. Others would nod, their brows wrinkled with concern. On the TV, the Fox correspondent said similar demonstrations taking place in over two hundred locations around France. Other unions were calling for strikes. Airports, trains, busses and subways were shut down in a transit workers strike. Students and labor unions were demonstrating because a new government policy would allow private companies who hired young people under twenty-six years old to fire them or lay them off during their first two years of employment. Previous government policy dictated that, once people were hired, their jobs would be almost guaranteed for life. Students and union members wanted to keep it that way.

After a few minutes, I pressed the “mute” button, turned to the class and asked: “Do you understand what the fuss is about?” Most continued to look at the now-silent television as a phalanx of helmeted police with shields moved forward against the mob, then retreated, over and over. Nobody answered my question though. “Muslim youths were rioting across France last fall,” I said. “but this is different. These are ethnic French kids, not immigrants.”

“Are they burning cars?” asked a student.

“Some are,” I said, “but not as much as the Muslim rioters did.”

We had been studying communism, socialism and capitalism in the context of the Cold War - hence the Vietnam film in the original lesson plan. Students knew that socialist countries closely regulated business compared to capitalist countries which favored a laissez-faire policy. “This is a good example of government regulation of business. France was moving toward socialism but is now trying to relax some of that regulation and demonstrators are resisting. French workers get thirteen weeks vacation per year. Government forces companies to give the new worker five weeks paid vacation after he’s worked only one year and it goes up from there. Companies are reluctant to take on new employees if forced to keep them for life. Businesses resist expanding and as a result, France’s unemployment rate is about 23 percent among young people.”

Then I explained how the unemployed get generous welfare benefits from government. That gets very expensive, so French workers must pay up to 68% of their salaries in taxes. “For every three dollars they get paid, two go to the government,” I said.

Policies the French government proposed for beginning workers are quite similar to policies for public school teachers here in the United States. I explained the provisions of my teaching contract for each class. Teachers get about 14 weeks vacation per year. In most American school districts, teachers may be let go after the first year and after the second year without explanation. However, if a teacher is hired for a third year, it becomes extremely difficult to ever get rid of him. Should a district want to fire him and the teachers’ union helps him fight it with legal help, the district can expect to spend an average of $200,000 in legal fees before it’s over.

If student enrollment goes down, American teachers can be laid off. But, if business slows down for French companies, they keep paying their workers because it’s usually cheaper than the legal costs of laying them off. Workers can request government help for legal fees to fight the layoff. Companies pay the legal fees themselves. Workers are almost guaranteed jobs for life, but companies are reluctant to expand if they have to assume all the risks. As a result, France’s economy stagnates and unemployment goes up. Government tries to ease regulation; unions and students riot.

Some students seemed to get it, but others were puzzled. Economics can be like that. It is the “dismal science” after all. Everyone, however, was interested in watching the riots. “What will happen next, Mr. McLaughlin?” one asked.

“Good question; I don’t know. We’ll just have to wait and see.”

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