The consequences of high youth unemployment

The economics fueling the French riots: System fostering sky-high youth unemployment proving unsustainable By Michael Mandel

...the outbursts were supercharged by an economic system that not only tolerates but actually fosters sky-high youth unemployment. In September, an incredible 21.7 percent of 15- to 24-year-olds in France were unemployed, compared to only 11 percent in the U.S. and 12.6 percent in Britain. France isn't alone — other European countries, such as Belgium, Spain, Greece, Italy, and Finland — also have persistent youth unemployment rates above 20 percent.

Such sky-high levels of idle youth are a by-product of the welfare-state mentality that's still pervasive across much of Europe. The idea is that government's main role is to provide a safety net for the population, in terms of jobless and health benefits. Generating growth and creating jobs takes a distinctly lower priority, resulting in high unemployment, especially among the young.

But what can the French government do? If they propose loosening restrictions on hiring and firing and letting the market set wages, and reducing social security costs, the leftists will come out in force. What's the alternative? Special (low-wage) jobs for unemployed minorities? They're not going to like that.

Then again, there are plenty of jobs available off the books. That's how many members of the extensive 温州 community in Paris work. We met some in a Paris restaurant a few years ago--they even had money to eat out!