Socialist traditionalists in France, who have in the past generally gotten their way with government subsidized theater tickets, a mandated work-week of no more than 35 hours, and national Chateau Lafite-Rothschild care for every citizen unable to afford their own vineyard, must be weeping in their fromage today:
Nicolas Sarkozy scored an early victory for his bold reform programme on Thursday after French legislators approved a measure that would make overtime pay tax-free.
The measure, approved early Thursday morning by the National Assembly, or lower house of parliament, after seven hours of heated debate, is part of a sweeping package of bills proposed by Mr SarkozyÃ¢â‚¬â„¢s centre-right government to stimulate growth and employment.
Other proposals include lowering inheritance taxes, tax credits for mortgage loans and limiting a householdÃ¢â‚¬â„¢s total tax payments from 60 percent to 50 percent. Tell me this hasn’t put some Parisian berets in a French twist.
Eventually, if Sarkozy keeps the reforms coming, France and the U.S. will intersect on the economic chart — France on the way up, and the U.S. on the way down, provided we stay on course with the mindset that the only way we can create jobs and save our lives is by raising taxes and working less.
By the way, Sarkozy realizes that tax breaks will actually fill government coffers at a greater rate than tax increases and nobody working more than 35 hours a week. It’s very Reagan in approach. Sarkozy’s opponents, like Reagan’s in the 80′s, say the overtime bill will cost the coffers billions, but Sarkozy, like Reagan in the 80′s, says that will be made up with by economic growth.
Ironically, France originally limited the work week to 35 hours in an attempt to lower the unemployment rate. Any overtime, it was thought, would force an employer to hire more staff instead of just pay fewer people to work longer. You have to appreciate the mindset there, which is not unlike that of the American left, meaning that it doesn’t hold water.
If a mandated 35-hour maximum work week sounds like a good idea, consider this. If lowering the number of hours worked per person per week lowers the unemployment rate, at what point does that become a stupid idea (hint: at any point).
If 35 hours a week doesn’t lower the unemployment rate enough, assume that the next great idea in socialist theory will be to have a 20 hour per week maximum…then ten hours…then five hours. The decline in working hours will continue until nobody is working at all — Somehow, in their minds, this will achieve full employment?
This type of genius economic thinking is catching on in the U.S., but in France, specifically Sarkozy, has realized the error of their ways and, if unimpeded, will turn things around in France.