Tuesday, December 11, 2018

Macron Increases the Minimum Wage: The Dumbest French Leadership Move Since Waterloo

Emmanuel Macron
French president Emmanuel Macron addressed the nation from the presidential Elysee Palace on Monday in a recorded TV speech and announced new economic measures in a desperate attempt to quell four weeks of violent protests across the country.

He announced that he would increase the minimum wage by 100 euros per month to take effect at the start of 2019. He also said that a tax hike for the poorest pensioners will be canceled at the start of the next year.

Well, three cheers for killing a tax hike on poor pensioners but what was striking about the yellow vests protest is that they occurred on weekends.

This suggests that many of the protesters were workers who couldn't protest during the week.

So what does Macron do to calm the protesters? He hikes the minimum wage, which will actually do nothing but put some of the protesters out of work---which means they will have nothing to do but protest 7 days a week.

French Labor Minister Muriel Penicaud knows better. He warned Macron about the minimum wage hike and told the Associated Press, "[the minimum wage] destroys jobs."

The current minimum wage in France is €1,498.47 per month, so the hike is approximately 6.7%. That's plenty to give a good boost to the unemployment rate, already high in France at 9.3% (France's neighbor, Germany has an unemployment rate of only 3.4%.)

It is estimated that the total number of people being now paid the current French minimum wage is around 1.7 million. The question is not if but when some of them will lose their jobs because of the hike.

Macron's presidential term doesn't end until May of 2022. This will provide a good deal of time for the minimum wage to do its dirty job killing tricks long before the expiration of his term (if he lasts that long).

The French people are inflamed because of the suffocating economy and Macron just threw a long burning log on the fire.

Someone should hand Macron a copy of Frédéric Bastiat's 1850 essay "Ce qu'on voit et ce qu'on ne voit pas."  Or perhaps Macron is already familiar with it and he is jammed by the French elitists who won't let him adopt a laissez-faire policy which would free the masses and cause the economy to boom. Or maybe he is just an economic illiterate or thinks he can pull a fast one

Whatever the case, more economic interventions are not the answer and not only is Macron tossing them out but the protesters are demanding greater interventions in the former of higher corporate taxes. The masses are certainly not ready for Bastiat's wisdom.

The country, thus, is likely to continue to decline regardless of who "wins" this battle. There appears to be no sound economic reasoning on either side.



  1. To paraphrase something George W. Bush once said, the French have no word for "laissez-faire."

  2. 100+ years have provided more than enough empirical evidence that democracy has been a huge failure. That includes democracy's variations---such as the Parliamentary system, and Constitutionally-limited Republics, and Constitutional Democracy, etc.---which still incorporate democracy to varying degrees, mostly to provide the imprimatur of legitimacy and validity to government authority.
    The privilege of voting must be drastically narrowed, or the dumb, mouth-breathing, government-indoctrinated masses will keep voting for populist inanity (or voting for "representatives" who will vote for inanity).