President Barack Obama thinks the United States should be more like France. He made the comment recently while pushing for mandatory paid family leave. “France has worked this out, why can’t we?”
Really! Look a little deeper and let’s see if the French have worked it out.
France requires employers to provide an array of benefits, including a $13 an hour minimum wage, four months of maternity leave, two weeks of paternity leave, a 35-hour work week, subsidized lunches, subsidized transit passes, subsidized health care and generous vacation time—like one month a year. In some cases, companies are required by their union contracts to pay 13 months of salary for 12 month’s work.
But there’s a catch. To get that pay and benefits, you must have a job. And in France, that can be a problem.
France’s unemployment rate has been above 9 percent for 18 years. Currently, it’s 10.1 percent — 23 percent for young people. One-third of those have been jobless for more than a year. France’s anemic job market isn’t surprising when you consider the economy has averaged a pathetic 0.8 percent annual growth rate over the last five years.
But that’s not all.
According to Numbeo.com, a global database of reported consumer prices, high prices in France make it hard to make ends meet. The average resident has almost 45 percent less local purchasing power than U.S. consumers. Grocery prices are 17 percent higher, restaurant prices are almost 34 percent higher, a gallon of gas costs nearly $8, and consumer prices including rent are 18 percent higher.
The truth is worker benefits are not free. They cost money and someone has to pay. Initially, the employer foots the bill, but those costs must be offset through higher prices or fewer jobs.
Too many American politicians today lack an understanding of this basic law of economics, which isn’t going to change. Perhaps, it is because they have never run a business, never had to make payroll.
That lack of understanding is why America is mired in the worst economic “recovery” since the Great Depression. Our moribund economy, shackled by a growing roster of costly government regulations and expanded federal entitlements is now in the fifth year of a non-recovery.
Five years after the end of the recession, the U.S. has still not regained the jobs it lost, when you factor in population growth. The Commerce Department reports that in May, just over 2 million workers found jobs, but 2.3 million left the labor force. That’s the 48th time in the past 49 months that job seekers were more likely to quit looking than to find work.
Hopefully, Obama will realize that heaping more costs onto the backs of struggling employers will only make matters worse.
It’s something Governor Inslee should keep in mind, as well.
According to the Washington Department of Employment Security, in May 75 percent of the counties in our state had unemployment rates above the national average.
Nevertheless, Gov. Inslee has signaled his support for a veritable smorgasbord of expensive programs, including raising the minimum wage, pay raises for public employees and a climate change agenda that could increase construction costs and send energy prices skyrocketing.
This is not the time to pile more costs on struggling families, employers and taxpayers. As we see in France, when the government burdens employers and families with added costs, everyone pays — in higher prices, lost jobs and a weakened economy.
As leaders in both Washingtons seek a cure for our ailing economy, they should remember the doctors’ Hippocratic Oath: “First, do no harm.”
Don Brunell, retired as president of the Association of Washington Business, is a business analyst, writer, and columnist. He lives in Vancouver and can be reached at TheBrunells@msn.com.