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While the public debate was moving toward inequality and the tax shield of the same name, the diversion did not take long. Not surprisingly, no sooner had he established that Germany was much better than France in terms of growth (+2.2% in the second quarter 2010 for Germany against +0.6% for France), the MEDEF and the government swept into a voluntary unilateral explanation: the "cost of labor."
"Not seeing," said the president of MEDEF, the issue of working hours has had an effect on the competitiveness of our country and always has an effect on the competitiveness of our country is really refuse to see a reality in the face ". And the head of the parliamentary majority to bid by offering to lower payroll taxes and transfer taxes on the share of VAT. "This has been done in Germany and has very good market ". Except that the VAT tax is the most socially unjust.
Problem for the" model "German here that German unions demanding large wage increases after all these years of restraint. Volkswagen has signed an agreement providing 3.2% general increase and payment of a bonus of 500 euros. The union demanded an increase twice. In chemistry, construction and utilities, unions are demanding wage increases from May to July %. So, cheaper employees in Germany and until when?
Amnesia employers and government
Responsibility would be for the cost of labor thus far tell employees! But not to companies, not the French employers not to conduct economic policy, none of this, just a difference in performance due to labor costs. ...
Yet!
1.First history of the French economy. The French industry is highly polarized pathways dependent on the diplomatic intervention of the state (Areva, Alstom, EADS, etc..) Rather than more vulnerable sectors such as aluminum (the debacle of Pechiney) or steel ( Arcelor). It's the story of French capitalism, its management, its banks that among the twenty largest French there are only three that are of industrial nature, while in Germany eight industry groups are placed in the top 20. History, too, under-investment in the French economy which is initially detrimental to industries. This brings us back to two converging explanations: first banking practices in credit to SMEs and other attraction of French capitalism for activities requiring little capital to capital and promoting a faster return on investment, that is to say services. Whose fault?
2.A state obsessed with the notion of "... French multinational." The imperial ideology dominates the government intervention to economic sectors. This is the story of the biter bit. By dint of wanting to build global leaders in choosing "strategic sectors on which to focus our efforts" (Sarkozy's speech, Charleville-Mezieres 18/12/06) we are left with an industrial base too addicted to the global organization "our national champions." Since, engaged in its "multinationalization", a company dedicated solely to the laws of Competitiveness can only continue on this path. Then wishful thinking to try to bring the concerns of planning and employment. France and Germany have placed the cursor between different national industrial exporter and worldwide deployment of enterprises. Whose fault?
3.La issue of competitiveness through innovation and research. An information report of the National Assembly in July 2010 recalled that "if France is the leading OECD countries for public research effort with 1% of GDP, the French economy suffers delay important to the private research effort (1.1% of GDP) compared to many countries (...) The effort of French companies on a long stagnant period, while at the same time its intensity has increased in most other countries. "While France spends about 2% (in 2007) of its GDP in R & D (below the OECD average), Germany she spends 2.5% and France has 25% of researchers under (216,000 against 291,000) that its German neighbor. Whose fault?
Here are three basic problems carefully excluded from public debate to focus attention not only on the labor costs. Three points that refer to a long history, with structural data of French capitalism and not cyclically, would they labor.
The temptation to copy Germany
While wage costs in France was less than the German wage costs in the early 2000s, it is gradually close over the last seven years. Priority to exports to Germany has been offset by a freeze on private consumption.
Catching up in cost due to the slower growth in net revenues (2.5% annually in Germany, cons 2.8% in France), levies on wages (1.5% against 2.7%) and reduced the number of hours worked in France.
If Germany was able to conduct such a policy - except that this means defeat for social workers - is that the spring growth has long been export. While his French neighbor, less exporter for reasons relating to the history of his business, depends heavily on domestic consumption to GDP growth.
From simple point of view of the French economy, the temptation to copy Germany would be catastrophic. At least in addressing the direct wages, that is to say, the purchasing power immediately. In Germany, the share of wages in national income rose from 72% in 2000 to 66% in 2010!
Hence the proposal of an official of the parliamentary majority of "lower social contributions, which are paid only by a few, and to transfer the VAT which it is paid by everyone." Except that the VAT tax is the most socially unjust, and that its increase would have an impact on consumption, and that this would erode a little more our welfare.
Europe, still Europe
Today, the first customer in Germany remains by far France (10% of sales). Next come the United States, the Netherlands, Italy and the United Kingdom, China ranks only sixth place, tied with Austria. From 2000 to 2009 the average annual growth of German exports to Europe and exports to the rest of the world were approximately the same (8.2% and 8.5% Source: OECD, International Trade - Harmonised System). But the former are higher than the latter two-thirds! The conclusion is that the dynamism of German exports to the rest of the world can not compensate for the time to slow in Europe.
So the European market that is played first the "competition" between France and Germany. The model of German exports is primarily a "European model" rather consistent, partial specialization and has also allowed the French capitalism to indulge in his favorite sport, the world champions in "strategic sectors" ( dixit President of the Republic). Upon arrival, France achieves less than 3% of world production of machine tools, dominated by Japan and Germany and Europe, a machine tool in two is of German origin or Italian. Another dimension
specializations French and German concerns the positioning of the range of exporters. The German market share is on average twice that of France in the low end, in the upscale market share in Germany is threefold. Relative losses of market share does not differ fundamentally between France and Germany, a range to the other markets outside the EU. By cons on the Community market, Germany is winning market share in the upscale, while France regresses (Source: Export performance of France and Germany. Report. Lionel Fontagne and Guillaume Gaulier).
Ask Ms. Parisot and a few others: what relationship between these historical trends and the cost of labor that was until the mid-2000s in any case higher in Germany than in France? So
more expensive or not?
If it is certain that Germany has significantly tightened its wage policy, lowering its cost, must still specify a number of things. First, the gap can not be seriously competitive play in the branches where the wage bill weighs heavy in operating costs. Then is it the average hourly cost? Overall labor costs? Of gross annual earnings and employer contributions? The only industry, it and service jobs related to it, or even the whole economy?
The case is a little more complicated than the tall tales of Madame Parisot who first sought to relieve the French employers of its economic responsibilities. This is shown - it seriously - a note of the Commission on Social Security accounts in June 2010 (click here to access).
In many poor arguments
explain the weakening domestic production and export of its positions by the argument of wage costs relative to Germany is a lie. If this country could weather the crisis almost without losing jobs, despite a decline of 4.9 percentage points of GDP in 2009, partly because it has greatly reduced the working time of layoffs. France itself, laid off!
Medef tackles new working time, the contract of employment and wages. Ms. Parisot understands that in France we work 1 hour 12 fewer than in Germany a week ... wrong! By integrating the part-time (2% of jobs in Germany, against 13.3% in France) one worker works 164 hours more per year in France and with an hourly labor productivity (although decreasing since 2003) still greater than that of Germany. The employers
tackles new level of social contributions and seeks, as in Germany, to transfer some of this burden (especially those relating to health) on VAT. In absolve themselves of part of wages, it will transfer the tax burden on the more socially unfair.
The German model is exportable to France?
That in any case a good example of the way in which employers and liberal policies use of European construction. Even Germany is now playing its air of social dumping against its neighbors! But the idea of copy-pasted from a so-called German model is a dead end. The reduction of expenses through a tax like VAT erode the purchasing power and allow nothing to overcome, particularly in industry, the characteristics of French capitalism.
The original article: (Apex)
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