France, California Differences Show Why European Startups Lag U.S. Rivals

Bloomberg ^ | 08/06 | Gregory Viscusi

[Jordi]

Mathieu Nouzareth and his brother Romain, founders of French online-video startup Cineticvision, are eager to hire more software writers.

Why don't they? Because 23 percent of what each employee costs them goes to the French government in taxes to pay for unemployment, retirement and health care.

[Jordi]

This article is the third of a serie that compares different economic,business,work enviroments picking states in the Eurozone and the USA, showing differences and performances. See also

Germany, State of Georgia Comparison Shows Why Europe Lags in Job Creation

Italy, Maryland Comparison Shows Why Europe Lags the U.S. in Productivity

[Prodigal Son]

Exellent series of articles. Bravo for posting them. Bump.

[jodorowsky]

Very interesting!

[Drango]

Wow, I can just see Gray Davis's next campaign ad...

"WE'RE BETTER THAN THE FROGS"

[liberallarry]

2nd bravo for posting these articles. My French friends tell me that Le Pen, of all people, is aware of this stuff and would like to do something about it.

[Dialup Llama]

Lets examine US conditions as well. One reason why US jobs are being exported to Asia is the high level of taxation here.

[LS]

"Each of the 380 million residents of the 15-nation EU produced $25,200 in goods and services last year, while 287 million Americans produced $35,500 apiece, according to the Paris- based Organization for Economic Cooperation and Development."

This says it all. I have been the most vocal proponent of PRODUCTIVITY as the MAIN economic indicator of a nation/region's health. Here 'tis again.

[Jordi]

Searching for statistics I have found a lot of areas with pro-capita GDP above 30.000$ (Bavaria of Germany, Inner London, Luxembourg...). I also found regions with values between 10,000 and 15,000, that are quite low (large areas in Spain,Portugal,Greece,Southern Italy,Eastern Germany...). Such differences are astonishing, considering that rich areas have unemployment firmly below 5%, while the poorest usually have more than 15% (and sometimes 21%) of their workforce unemployed. First, Europe must enhance mobility A LOT.

I have found a lot of papers on the argument but no detailed statistic , by now.

[zefrog]

Freaking propagandist francophobe bullshit.

I'm a French entrepreneur as well, and my point of view is very different. First, what is called "taxes" in this article are not "taxes" but "social charges", in the sense that they don't go to the government as the article pretends, but to other organisations in charge of pensions, health insurance, etc. which include fully private for-profit insurance companies. In most cases, it is the company or the employee who choses which organism or company will be the benificiary of these charges. The fact that these points have not been mentioned in the article pretty much tells you how biased it is.

Also, this system is no more costly, actually less by my own experience, than its American counterpart. I've had many occasions to compare: in the US these "social charges" are not paid directly by the employee (this is not so true since an american company often pays directly for health insurance and sometimes other costly benefits) but since your employee must be able to invest in his pension fund, its life insurance, etc., at the end of the day these expenses must be "provisioned" in the salary paid to the employee. Which means that in France, a direct salary is lower than in America, but all the benefits and "social" expenses have already been taken on its paycheck.

The other point on the difficulties to fire someone, however, is much more valid.

[Lancey Howard]

Higher payroll costs, legal barriers to laying off workers and complex regulation in France and elsewhere in Europe help explain why Europe's gross domestic product per capita has been stuck at two-thirds of the U.S. level for more than 20 years, economists say.

``The European economies have poor incentives for job- creation because of job-protection laws and wage regulations,'' said Gary Burtless, a Brookings Institution economist who has studied the U.S. and European economic systems.

Okay, could somebody help me out here?
The scumbag Democrats' primary goal is to take the US in the direction described above.
The Brookings Institution is an arm of the scumbag Democrat Party.
So why does the Brookings Institution allow one of their economists to say the things he says above?
Is this guy toast?

[Lancey Howard]

First, what is called "taxes" in this article are not "taxes" but "social charges", in the sense that they don't go to the government as the article pretends, but to other organisations in charge of pensions, health insurance, etc. which include fully private for-profit insurance companies

Ah, so these "social charges" are optional and voluntary, and are not mandated by ze government.
Well, then this story certainly is inaccurate.

[zefrog]

Pay slips must also list entries for money set aside for company training as well as a ``13th month'' of salary that all French employees must receive.

Mouahahah. Absolutely not true. Really, this article belongs to the trashcan.

[zefrog]

Nouzareth said he's never heard of night classes on starting your own business.

Reeeaaaaaaalllly? If so, he's a moron. There are night classes everywhere on this in France and I've attended several. What kind of "source of information" is this guy?

And French entrepreneurs complain that the efforts are splintered among hundreds of different local agencies and it's very difficult to find out what aid you can qualify for.

Oh, come on! It takes TWO hours to find all the aids you can qualify for. And even if that's still too much for your poor little head, there are specialists who are here to help you, often for free. If this guy thinks this is still too difficult, I really wonder if it's such a good idea for him to become an entrepreneur.

[zefrog]

There's quite a difference between saying that these social charges are taxes which go directly to the government and saying that these expenses are made mandatory by legal regulations, don't you think so? After all, when a foreigner enters US soil, the US government makes it mandatory for him to take a health insurance which will cover him in the US. Whant would you say if some french journalist pretended that the money he will have to spend for this is a tax which goes directly in the pocket of the US governement?

[Lancey Howard]

"There's quite a difference between saying that these social charges are taxes which go directly to the government and saying that these expenses are made mandatory by legal regulations, don't you think so?"

I think I am beginning to see how France became a socialist sewer.
No offense.

[MrB]

There was an excellent article in the Wall Street Journal today. I bet Troutstalker will post it.

Basically, it says that the Euros love their leisure time more than they like to be productive.

Some of the countries (France) has a government (ie- gun to the head) mandated 35 hour work week, and 6+ wks vacation.
Get this - their reasoning is that companies will hire more people to get the work done if the existing workers are not allowed to work longer hours. The opposite has become true - companies are opening branches in foreign countries to hire workers who actually want to work.

[zefrog]

I think I am beginning to see how France became a socialist sewer.

Why? I never said that I approved these regulations. But the content of this article is _wrong_. It's as simple as this.

[Lizavetta]

There's quite a difference between saying that these social charges are taxes which go directly to the government and saying that these expenses are made mandatory by legal regulations, don't you think so?

Are you on drugs?

[LS]

Go here for more on German unemployment.

http://www.freerepublic.com/focus/news/729735/posts

[kidd]

Interesting criticism of the article. I find it interesting that this article chose California as a comparison. The California power supply is completely unreliable, whereas the power supply in France in quite reliable. I would never start a business in California simply because of this fact.