8 Jul 2017
Is France Prosperous?
Debate 6
The question “Is France prosperous?” is interesting because it can be answered in two completely opposite ways. On the one hand, France offers a majority of its population a standard of living coveted by citizens of many other countries. More than three-quarters of French people have permanent, highly-protected work contracts and a very low chance of becoming unemployed. The social safety net (health, retirement, family, unemployment benefits) is among the most generous; the educational system is essentially free; inequality levels are not extremely high.
But on the other hand, a minority of the population (25% of “outsiders”, as opposed to “insiders”) find themselves in a very difficult situation: shorter and shorter fixed-term contracts, frequent unemployment, and an inadequate professional training system. Some 17% of young people aged 15 to 29 are school dropouts, unemployed and untrained. The country also has several severe obstacles: business capital modernisation is considerably behindhand compared to other countries; the average skills of the active population are low; maths skills among young people are very poor. The cost competitiveness of businesses is lower than in countries with the same range level, and this is aggravated by a high tax burden, required to finance a generous welfare system.
One can take an optimistic or a pessimistic view.
The optimistic view is that France’s structural issues will be corrected: educational reform, dynamic start-ups and the removal of burdens (e.g., regulations, taxes, etc.) will help maintain the well-being of most of the population.
The pessimistic view is that the abovementioned structural problems will take considerable time to fix, and as a result, low growth and reduced public revenues will mean less generous welfare benefits.