France’s primary problem is not worker productivity, writes Howard Davies
Maurice Taylor, chief executive of the Titan tyre company, first came to public attention in the US in 1996 when he ran, or rather stumbled, for the presidency
. He spent a lot of his own money to earn about 1 per cent of the vote in the Republican primaries he entered, and published a manifesto of sorts entitledKill All the Lawyers and Other Ways to Fix the Government
. It is clear that he has a 19th-hole ideology, and a sense of humour to match.
The French have, perhaps to their credit, failed to see the joke in his tirade against their workers, trade unions, government and pretty much everyone else in the hexagon. “Titan is going to buy a Chinese tyre company or an Indian one, pay less than one euro per hour and ship all the tyres France needs. You can keep the so-called workers,” he wrote in a letter, a copy of which was published this week in Les Echos
. “Outraged of Paris” has been loud in his condemnation. We may take it that Mr Taylor will not be a candidate for the Légion d’honneur in the Socialist Republic of Hollande.
The French are rather sensitive these days to what they see as “le French-bashing”. They think nobody loves them. They are inclined to see signs of an Anglo-Saxon conspiracy involving credit rating agencies
(why did they downgrade France but not, until Friday night, the UK?), the British press (led by The Economist
), prime minister David Cameron with his proffered red carpet for exiled entrepreneurs
, and now multinationals such as Titan and ArcelorMittal
. It may be tough to shoehorn Indian steel magnate Lakshmi Mittal into the Anglo-Saxon box, but needs must. Even their formerly reliable allies across the Rhine have been joining in. It just isn’t fair.
The lightning rod for these attacks, and addressee of Mr Taylor’s letter, is Arnaud Montebourg
, the minister for redressement productif
or industrial renewal – a grandiloquent title that might be thought to be asking for trouble in recessionary times. Mr Montebourg was a threat to President François Hollande in the Socialist party primaries, attacking him from the left. In an earlier manifestation, he was spokesman for Ségolène Royal’s presidential campaign in 2007, remarking that she had only one fault: her partner, at that time Mr Hollande. There may be quiet satisfaction in the Elysée that the chalice offered to Mr Montebourg has proved quite as poisoned as it has.
The notion, encouraged by Mr Montebourg, that the government is the victim of a co-ordinated attack by these disparate forces is absurd, but just because the French are paranoid doesn’t mean people are not out to get them. There is a narrative that says France is becoming the sick man of Europe, with a stagnant economy, stubbornly high unemployment, a persistent trade deficit and a budget deficit highly likely to exceed the 3 per cent target to which the government is committed through the Maastricht treaty, exposing it to the threat of EU criticism and possibly sanctions. That critique is not heard only in London or Washington: many French economists are anxious, too. There is no shortage of dissent in Paris itself.
Therefore, despite Mr Taylor’s eccentric phraseology
– “How stupid do you think we are?” – his letter to Mr Montebourg fell on fertile ground. The problem is that he has taken aim at the wrong target, and attacked the French at their strongest point. With enemies such as Mr Taylor, the French have no need of friends. Indeed, his attack on feckless workers suggests he may be a few treads short of a radial.
Because the truth is that the productivity of French workers is not at all bad. The French do work fewer hours than most comparable nations. They work, on average, 16 per cent fewer hours than the OECD average, and 25 per cent fewer than the industrialised Asian nations. Yet their output per hour compares very well. A UBS study from 2009
showed that annual French output was $36,500 per head, compared with $44,150 in the US. But on average the French work 1,453 hours a year, while their American counterparts are clocked in for 1,792 hours. So on a per hour basis the French produce $25, and the Americans $24.60. Not a huge difference, perhaps, but it certainly does not suggest that French workers – while they are on site – are on a permanent coffee break, or drinking a ballon de rouge
behind the bike sheds.Figures from the UK’s Office for National Statistics
tell a similar story. Productivity per hour in France is about 15 per cent higher than in the UK, and almost on a par with Germany’s. The French are able to produce a remarkable amount in their short working week. We should not be astonished by these numbers. They reflect, in part, higher investment per head in France, compared with the US and the UK. Last month’s report from the LSE Growth Commission
showed that in the past 35 years, investment in France has been higher than that in Anglo-Saxon economies by about 3-4 per cent of gross domestic product.
France’s primary problem is not the productivity of those in work. It is that restrictive labour laws penalise hiring, which leads in turn to higher unemployment. The “ins” are protected from the “outs”, which tends to increase labour costs. France’s costs have been rising more rapidly than Germany’s, so its competitiveness has deteriorated. Unemployment contributes to the budget problem through increased welfare payments, and makes cutting public-sector jobs more difficult.
Mr Taylor has, therefore, missed the point entirely in his intemperate diatribe. Guy Mollet, the former French trade union leader, once said that France had the most stupid rightwing politicians in the world. The recent comic opera antics
of François Fillon and Jean-François Copé, who both seek to succeed Nicolas Sarkozy as head of the centre-right UMP party, have lent support to his point of view. But Mr Taylor has shown that the French right have no monopoly on back-to-front arguments.The writer is a professor at Sciences Po in Paris and a former director of the London School of Economics