Today, I came across this interesting article in The Guardian:
The short version is that a lingerie factory near Auvergne is shutting down and outsourcing production to Tunisia. This makes sense economically since the wages and benefits French workers demand are too high to justify production in France, when Tunisian workers are able to do the same work for significantly less.
Since many of the workers belong to communist or socialist parties, their first inclination is to protest the closing of the factory to the government in dramatic fashion and demand their jobs stay in France. It’s not clear how they would achieve this as the only two options involve either physical force of special breaks for the manufacturer.
Sarkozy’s reaction does not appear to be much better. He calls in a personal favor from a friend, who will make Louis Vitton purses at the factory instead. The article goes on to say Sarkozy believes the key to maintaining French industry is to lower wages. Another politician, whom the article labels as a “centrist” suggests the only way to stop the tide of industrial jobs out of France is to only buy products with a “Made in France” tag on them.
Three dimwitted solutions from three different political ideologies. And even the economist quoted in the article seems to be overtaken by the same industrial-mania. They seem to believe the problem is ‘not focusing on industry enough’, rather than the completely flawed economic policies that France has put into place over the past several decades.
Sarkozy’s idea that the French workers should simply ‘take lower wages to stay competitive’ may seem realistic on the face of it, but it also doesn’t seem like much of a productive solution. The reason the jobs are migrating out of France is because French workers demand higher market wages than other nations. In order to earn those wages, French workers must create more value. Yet, it’s difficult to see how they can achieve this when the French government’s philosophy is that there need to be more jobs in low-wage, low-skill industries.