Under President Barack Obama, Americans have seen unprecedented spending, regulations and a constant call for higher taxes, combined with high unemployment for youth and the general population alike.
Is this high unemployment and lackluster economic growth the result of liberal policies, or is it the depth of the recession, where liberals like to direct the blame? The French experience suggests that it’s the former.
Young Americans should look to France as an example of what the United States could turn into, if left to liberal devices. The country’s tax burden and government spending as a percentage of GDP are among the highest in the world — the average single French taxpayer paid an average of 50.2 percent of their total income in taxes in 2012, and total government spending in France accounts for 56.3 percent of that nation’s total GDP.
It has created a situation where unemployment has not gone below 7 percent since 1996.
For French youth, it’s even worse. The unemployment rate for that group in October stood at 25.8 percent — 10 percentage points higher than where it was in the U.S. during the same month, when it stood at 15.9 percent.
“People always paying the price are young people and low-skilled,” said Mercatus Center economist Veronique de Rugy. “The cost of labor is so high that you need to have serious skills for an employer to want to hire you. People losing are young people and low-skill. The American Democrats still look at France or Europe as it was 25 or 30 years ago, not as it is today.”
That lines up with the experience of ordinary French people like my cousins, who have fallen victim to these crushing tax burdens and high unemployment. My young French cousin, for example, struggles to find work despite his certification as an electrician.
The French government provides generous entitlements such as paid leave for pregnant mothers, sickness benefits, disability benefits, old-age benefits and unemployment benefits, among others. DeRugy warns that should the U.S. adopt economic policies similar to those of France by expanding the welfare state, it would bode poorly for the lives of young Americans in the coming decades.
“It’s a vicious circle,” De Rugy said, noting the connection between high taxation, government spending and slow economic growth. “The economy is basically not growing and there are quarters where it is shrinking. [French President Francois] Hollande’s only response has been to raise taxes.”
France’s powerful unions also contribute to high youth unemployment by pushing for the same sorts of high minimum wages that Obama and the Democrats are currently pushing. The country’s minimum wage is among the highest in Europe.
An American Enterprise Institute study found, by contrast, that France would lower its youth unemployment rate were it to reduce its minimum wage to American levels.
Add up all of these shortcomings of French policy, and the country has had persistently anemic economic growth that has never exceeded 1.5 percent annually during the past couple of decades. Economic growth at that sort of level usually is seen as a warning of a recession and that the nation is incapable of lowering unemployment.
De Rugy warned that the economic troubles are going to cost for someone — and it’s likely those who have the weakest voice at the bargaining table.
“A moment is coming where they are going to have to cut something, and the cuts will be for the least powerful interest groups — the poor and the young,” de Rugy said of France.
And if our nation continues on the course prescribed by Obama and the Democrats, America won’t be far behind.
