Unemployment strikes back. Horrendous figures have been released from Germany: More than 5 million people are jobless there. The European Constitution is jeopardized by the French Referendum where the No seems to be stronger and stronger. At the same time, the President of the European Commission, José Manuel Barroso, pushes his newly polished plan for the so-called Lisbon Strategy: "Working Together for Growth and Jobs" .
The Lisbon Strategy for economic, social and environmental renewal agenda is rather ambitious:
The Lisbon Strategy is a commitment to bring about economic, social and environmental renewal in the EU. In March 2000, the European Council in Lisbon set out a ten-year strategy to make the EU the world's most dynamic and competitive economy. Under the strategy, a stronger economy will drive job creation alongside social and environmental policies that ensure sustainable development and social inclusion.
However, the recently released unemployment figures raise doubts about the probability of a successful completion of the agenda. Moreover, it makes a victory of the No at the French Referendum on the European Constitution more likely. To be fair the issues at stake are far from easy especially when you think of the complex social fabric the European Union is made of. A lot of details have to be taken care of.
Talking about details, Anglo-Saxons are used to say that the Devil lies in the details. Interestingly enough, Jews from XVIth century Amsterdam were used to say that God lies in the details. This is obviously quite different. I would assume that you prefer God visiting you and have the Devil stay quiet. Question of perspective you may say. I have nonetheless the feeling that the Anglo-Saxons are closer to the truth. Their legendary pragmatism has taught them that when you miss a detail, even a tiny one, God does not pay you a visit but a rather angry Devil. You don't bother the Devil inadvertently: Any negligence is paid cash!
Talking again about details, I recently read a short note in a magazine (can't remember where it was though). nothing deep or fancy in appearance. The author observed that American people are keen on books like "How to Get Hired", "How to Make your First Million", "How to make it big in the Corporate Arena" etc... while French people are more attracted by titles like "How to Protect Yourself from Being Fired", "How to Successfully Implement the 35 Hours week", not to mention the all too famous "Hello Laziness" (Bonjour Paresse).
So what? After all, "de gustibus non est disputandum", especially when it comes to reading choices!. However, in my opinion, this note is deeper than it seems. It is like the tree that hides the forest, the detail that you should look at twice. Tell me what you read and I'll let you know who you are.
Let me explain. We, the Europeans (mainland) have the bad habit of being quite condescending toward American people. To almighty Uncle Sam, we object the US of cheap labor, small jobs, the so-called McDonald jobs. American capitalism is viewed as merciless, some kind of monstruous machine yielding massive wealth inequalities. Interestingly enough, economists have their own shortcut way to describe what differentiates America from Europe: Moneyless America, Jobless Europe. Indeed, talking about France vs. the US, the Centre of Economic Policy Research (CEPR) says:
"The ‘moneyless America, jobless Europe’ description of transatlantic labour market differences is well-known and well documented: while US inequalities rose dramatically during the 1980s, the average unemployment rate remained fairly stable. Over the same period, exactly the opposite happened in France: wage dispersion remained fairly stable while unemployment rates almost quadrupled."
In a not so recent paper by Daniel Cohen, Arnaud Lefranc and Gilles propose some explanations to the unemployment gap between the US and France.
Let me submit an additional one which, in a sense, is inspired by this news on what people read on both sides of the ocean. It seems to me that in Moneyless America people accept less-paid jobs (on top of the obvious reason that they need to get by) to remain in the flow, to avoid being excluded from it. Being in the flow means staying tune with what's happening and seizing opportunities when they come by. To use a financial jargon, these people hold a call option on future events that may turn out to be favourable to them. Some will argue that this is what America is made of: Land of opportunities built by people who left Old Europe...
In Europe, and especially in France, it seems that we have institutionalized a reverse order. We insist a lot on the social safety net and unemployed people receive unemployment indemnities far more generous than their US counterparts. In other words, to use the same financial analogy, people on this side of the option are long a put option (insurance) that mitigates the financial pain of not having an income anymore. Everything goes as if the emphasis was put more on the insurance aspect of things rather than making sure that people don't stay away for too long from the flow. And, indeed, empirical evidence shows that French unemployed stay 5 times longer from the flow that their US counterpart. Being "kept" away from the flow means losing the opportunity of seizing timely options. This is sad and current French unemployment figures are not encouraging from that standpoint. Note that the European Constitution itself has to insist on the "social market economy" concept, a concept that Deng Xia Ping truly mastered!
Hence it is not so surprising to see French people so skeptical when asked to support the European Constitution. This is simply not their current mood. That's bad . What is even worse is that some shrewd French politicians (rightists and leftists by the way) have seized the opportunity to spread anxiety, fear to, among other personal objectives, regain audience in the media. Listening to tem, I am sure that Frédéric Bastiat must be turning in his grave.
So, does what you read tell others what you are? Should French people change their reading habits? Do these reading habits convey interesting information that European politicians should take into considerarion?
Well, to be frank I am still investigating the case. More homework is for sure needed. I am currently reading Barbara Ehrenreich's Nickel and Dimed: On (Not) Getting by in America (Owl Books, also available in French as L'Amérique Pauvre). Very reminiscent of Jack's London The People of the Abyss (read it, this is London at his best!) by the way. Ehrenreich's book is a valuable first-hand account of Moneyless America. A journalist, Ehrenreich decided to give up her cozy comfort for a while to become a low-wage earner. The book is her diary and analysis of the experiment. As such it should be an interesting check of my "flow hypothesis".
In any case, I'd be glad to get your comments!