Sunday, October 20, 2013

Down and Out in France



UK Telegraph - Down and out: the French flee a nation in despair
The failing economy and harsh taxes of François Hollande's beleaguered nation are sending thousands packing - to Britain's friendlier shores

High Taxes

More than 70 per cent of the French feel taxes are “excessive”, and 80 per cent believe the president’s economic policy is “misguided” and “inefficient”. This goes far beyond the tax exiles such as Gérard Depardieu, members of the Peugeot family or Chanel’s owners. Worse, after decades of living in one of the most redistributive systems in western Europe, 54 per cent of the French believe that taxes – of which there have been 84 new ones in the past two years, rising from 42 per cent of GDP in 2009 to 46.3 per cent this year – now widen social inequalities instead of reducing them.

Shorter Work Week

What went wrong, says Régniez, was a bill passed by the then socialist Lionel Jospin government reducing the working week to 35 hours. “Where our competitors, especially the Germans, saw the need to keep prices and costs down, France spent money she couldn’t afford.” The entire system, he explains, tilted fatally to the side of salary hikes, perks and a lowering of retirement age, in the face of every observable demographic trend. Investment slowed down in the private sector, and almost stopped in the public one. “Each year, France has missed out on four GDP points of capital investment. By now, after a decade-and-a-half, we are not only lagging behind, it’s not certain we can make up for it. It would cost a 4.5 per cent hike in VAT, and other significant hikes in payroll taxes. That, quite simply, is not realistic.”

Failed to Live Up to Promises

Problems with the short work week:
Lawrence Journal World - France set to abolish 35-hour work week


Employers Froze Salaries

But with unemployment at 10 percent, politicians of all stripes acknowledge that the country's unique 35-hour law has failed in its original ambition: to force employers to hire massively. What's more, there are strong signs that it hurt living standards as employers froze salaries to make up for lost labor.

Hurt the People it was Supposed to Help


Often touted as the working mother's godsend, the 35-hour week actually made life harder for poorer women and single parents, according to women's organization CLEF.
"The women that suffered were the lowest paid, who needed all the overtime they could get to make ends meet," said CLEF president Monique Halpern. "I think this is one of the reasons that Lionel Jospin lost the elections."
Hurt Investment
Clara Gaymard, the globe-trotting head of the French International Investment Agency, contends the 35-hour week has damaged investment in France, mainly because of its negative image in countries like the United States -- France's biggest source of investment.
Destroyed Jobs
In today's uncertain economic environment, though, the shorter work week is "destroying jobs because companies wonder whether it's worth taking people on for just 35 hours a week," Touati said



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