Moving ahead, falling behind

From Reuters today, with a headline “Best job market in 5 years for grads”:

U.S. college graduates are facing the best job market since 2001, with business, computer, engineering, education and health care grads in highest demand [...]

"We are approaching full employment and some employers are already dreaming up perks to attract the best talent," [...]

Graduates with economic or finance degrees will see the biggest gain with starting salaries up 11 percent to $45,191, while accounting salaries are up 6.2 percent, business management salaries up 3.9 percent and pay for civil engineers 4.3 percent higher.

Pretty remarkable for an economy that has endured Katrina and 9/11. That an economy should survive those things is historically notable. That it should thrive is simply historic.

A note of caution from the above, however.

[...] graduates should not assume the improved labor market will guarantee everyone a job.

"Even as demand and salaries rise, college students should not be lulled into thinking that the job search will be easy or that jobs will be handed to anyone with a degree," he warned.

True dat. Why do I point this out? To juxtapose it against a more tragic situation.

VIOLENCE flared at the end of a giant anti-government protest in France yesterday as youths fought running battles with riot police in Paris after burning a car and smashing several shop windows. [...]

Sébastien Lasau, 26, a railway worker, confirmed that many of the rioters were students. “They are daddy’s boys from the chic arrondissements. They came equipped with scarves and lemons to counter the effects of the tear gas, and many of them have ski goggles as well.”

Students have closed 16 universities and disrupted classes at 35 others in protest at the law, which is intended to encourage hiring in companies wary of taking on new staff. Chirac called ... it “an important element in the policy of fighting unemployment”.

French unemployment among young people is generally quoted in the 20-30% range, double the rate in the US and in freer European economies such as Britain’s. The source of this problem, to state the obvious, is a lack of job creation.

The tragedy is manifold. Not least is that the protesters are élite, educated, native French. They have been handed as much privilege as can be imagined. And yet, they persist in the belief that their government owes them jobs.

Their government cannot promise jobs, because it, like all governments, cannot actually produce wealth. The best it can do is to create circumstances in which jobs can be created. That these privileged kids are willing to do great damage, with such disregard for this fact, is astonishing to me.

I don’t know all the details of Mr. Villepin’s plan, but the heart of it is that employers are given greater latitude in hiring and firing. It is the latter part that is the rioters’ grievance.

What they must realize is that the freedom to hire and the freedom to fire are the same thing. Put another way, when we restrict the ability of companies to get rid of workers based on their needs, they become much less likely to hire in the first place.

Here’s an analogy. Let’s say it were government policy to increase the rate of marriage. We put the following law in place: if you have gone on three or more dates with a person, you must marry them. That will ensure that people stay in relationships, right?

Of course, the likely outcome would be that most people avoid the third date, or dating at all, or they work hard to keep the relationship under the table. Rational employers are doing the same thing.

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The second part of the tragedy is that France is a welfare state, with great promises to its older generations. This requires the younger generations to produce enough wealth to support themselves and their predecessors. The best and brightest of the younger generation, the ones with the highest earning potential, are refusing to work, and are violently trying to prevent laws that would require that their employment be tied to their employability.

This is very sad for the elder French who’ve spent their lives working to support the social safety net.

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The third part of this tragedy? The residents of the banlieues, who rioted over unemployment this past fall, will be the real victims, and the real source of danger, should the élites succeed in repressing economic liberalisation.

We in the US certainly don’t have everything right, but we do make the correct priority of wealth and job creation before all else. I hope our French cousins will focus their energies on their own future. We need them.

Cross-posted at California Conservative.

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Update: Brussels Journal has more:

They are, indeed, being reduced to serfdom but not, however, by Villepin’s [proposed law] – a sensible measure which can only be qualified as being too little too late – but by the so-called “social” policies of yesteryear and by the “latter day revolutionaries,” the trade union leaders and the Socialist politicians intent on continuing their self-defeating policies.

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Update: Claire Berlinski at the WaPo seconds my sentiment that the real losers here are not the rich kids rioting, but the poor immigrants in the suburbs.