Labor Market Reform in France would Help Ease Muslim – non-Muslim Tension
(Photo by malachybrowne via Wikimedia Commons: “Bird’s eye view of the Calais Jungle”)*
Many European countries are experiencing a surge in Muslim immigrants from Middle Eastern countries such as Syria due to the ongoing armed conflict in the region. This, along with recent large scale terrorist attacks in France and Belgium, has resulted in new and sometimes renewed tension between Muslim immigrants and their native neighbors.[i]
Concerns about the appropriate level of assimilation, or the lack of it, are on many people’s minds across the continent. Reforms that liberalize labor markets in France and other European countries would address these concerns by providing more economic opportunity for immigrants, which would make it easier for them to adjust to their new surroundings. In the long-run such reforms would also improve France’s economy and make it easier to absorb additional immigrants in the future.
Assimilation takes a long time, and can fail to occur altogether; this is due to community segregation, the degree of cultural differences, and the remnants of historical colonialism, the latter being particularly important in France.[ii] Rigid labor markets also hinder assimilation and are contributing to the current unrest in France.
France and other European countries’ labor market policies tend to favor older, established workers and make it difficult for lower skilled, younger workers to find employment. Since immigrants tend to be younger, less skilled, and new to the labor market, it is more difficult for them to find work.
According to Pew Research Center, the Muslim population in European countries is younger than the general population, with the median ages being 32 and 40 respectively in 2010.[iii] Muslim and other immigrants may also face language and cultural barriers when they first arrive. These factors, in addition to their status as new entrants to the labor market, makes it difficult for them to find employment in France.
France is home to 4.7 million Muslims—which is 7.5% of the country’s total population—according to a recent estimate from Pew.[iv] The country’s Muslims are struggling economically: according to a recent report in the International Business Times, in 2013 the unemployment rate for immigrants in France was 17.3%, almost double the non-immigrant rate of 9.7%.[v] The Times also reports that many Muslims are frustrated by the lack of employment opportunities and upward mobility for them in France.
These results are not surprising in light of the different labor market policies that exist across countries. Data from the Organization for Economic Co-operation and Development (OECD), published in Cornell economist Lawrence M. Kahn’s 2011 paper on national labor market policies, show that the Scandinavian countries (Denmark, Finland, Norway and Sweden) and Central European counties (France, Germany, Italy and Spain) have more strict employment regulations than Canada, the UK and the US.[vi] For example, on a 0 – 6 scale (6 is the most restrictive) France’s regulation strictness is 2.5 for regular employment and 3.6 for temporary employment while America’s is 0.2 and 0.3 respectively.
Strict employment regulations include mandated severance pay, limits on temporary hires and other policies that generally make it costly to hire and fire workers. The benefits and costs of these policies accrue to different groups of people; the employed benefit through greater job security but the unemployed bear the costs. The greater hiring costs encourage firms to economize on labor and firms are less likely to take a chance on less qualified people since it’s difficult to replace them if things don’t work out.
France also has a relatively high minimum wage, which is another employment hurdle for low-skilled workers.[vii] According to Kahn, France’s minimum wage was 54% of its median wage in 2004, compared to 41% in Canada and 31% in the US. Firms only hire workers who can provide value that is commensurate with their cost. A high minimum wage means that many lower skilled workers who are unable to provide sufficient value will be unemployable. Due to their relatively low skills, immigrants and younger workers are affected the most.
In his conclusion, Kahn remarks that “[C]ollective bargaining and employment protection appear to cause lower levels of wage inequality and higher levels of job security to incumbent workers” but “in some cases lead to the relegation of new entrants (disproportionately women, youth and immigrants) as well as the less skilled to temporary jobs or unemployment.” The economic realities of France’s Muslim population are evidence of the latter.
This is not just an issue in France. Other European countries also have a high proportion of Muslims, including the Netherlands (6%), Belgium (5.9%) and Germany (5.8%), and in the aforementioned Times report Alan Cooperman of Pew notes that “In Western Europe, Muslims tend to lag the overall population in socioeconomic status.”
In contrast to France, the US has largely been able to absorb immigrants from all over the world—including Muslim immigrants—due to its flexible labor market that allows workers and firms to easily separate from one another to pursue new opportunities or adjust to macroeconomic forces. The relative ease of finding employment is likely a factor in Muslims’ positive opinion of economic opportunity in America: according to a Pew survey, 74% of Muslims in America believe that most people can get ahead if they work hard, which is a greater percentage than even the general public (62%).[viii]
Shahed Amanullah, a former senior adviser at the US Department of State on issues concerning Muslim youth around the world, has echoed this sentiment:
“If you look at the [working-class Muslims immigrants] in America, the cab drivers, store workers seem to have more hope in economic mobility in the US than they do in Europe. In America, maybe the parents come as laborers, but their kids go up the ladder. There’s some upward mobility. In Europe, the feeling is often that ‘my fate is the same as my parents’ fate.’ That’s where the frustration sets in.”[ix]
France is in the midst of an election and one of the candidates, François Fillon, has pledged to reform the country’s economy by streamlining labor regulation, cutting corporate taxes and shrinking the size of government.[x] These policies would help economic growth and increase opportunities for unemployed workers but remove some of the labor market protections employed workers currently enjoy.
This cost will likely be viewed as too high by some, but the people of France should remember that an additional benefit of economic liberalization would be a boost in optimism within the country’s Muslim community. Over time this could help ease the tension between Muslims and non-Muslims in the country and contribute to the long-term prosperity of France.
Adam Millsap is a Research Fellow for the State and Local Policy Project at the Mercatus Center at George Mason University. He conducts research on urban development and growth, population trends, labor markets, and federal and local urban public policy. He earned his master’s and PhD in economics from Clemson University and a BS in economics and a BA in comparative religion from Miami University in Oxford, Ohio.
Licensed for use under Creative Commons Attribution 2.0 Generic license: https://creativecommons.org/licenses/by/2.0/legalcode
[i] Peter Foster, “Anti-Muslim sentiment on rise in Europe due to migration and Isil as continent rejects multi-cultural society,” The Telegraph, July 12, 2016, accessed December 5, 2016, http://www.telegraph.co.uk/news/2016/07/12/europe-rejects-multi-cultural-society-says-survey/
[ii] Nabih Bulos, “Why France has a more fraught relationship with its Muslim communities than the US,” Los Angeles Times, July 16, 2016, accessed December 1, 2016, http://www.latimes.com/world/europe/la-fg-france-threat-history-20160716-snap-story.html
[iii] Conrad Hackett, “5 facts about the Muslim population in Europe,” Pew Research Center, July 19, 2016, accessed November 30, 2016, http://www.pewresearch.org/fact-tank/2016/07/19/5-facts-about-the-muslim-population-in-europe/
[v] Ismat Sarah Mangla, “Why do American Muslims fare better than their French counterparts?” International Business Times, November 18, 2015, accessed November 30, 2016 http://www.ibtimes.com/why-do-american-muslims-fare-better-their-french-counterparts-2189449
[vi] Lawrence M. Kahn, “Labor market policy: A comparative view on the costs and benefits of labor market flexibility,” Journal of Policy Analysis and Management 31 (2012): 94 – 110.
[vii] Adam A. Millsap, “All $15 minimum wages are not equal,” Forbes, July 5, 2016, accessed December 1, 2016, http://www.forbes.com/sites/adammillsap/2016/07/05/all-15-minimum-wages-are-not-equal/#baf04c5635ff
[viii] “Muslim Americans: No signs of growth in alienation or support for extremism,” Pew Research Center, August 30, 2011 accessed November 30, 2016, http://www.people-press.org/2011/08/30/muslim-americans-no-signs-of-growth-in-alienation-or-support-for-extremism/
[ix] Mangla, “Why do American Muslims fare better than their French counterparts?”
[x] Liz Alderman, “With presidency in play, can France embrace economic change?,” The New York Times, December 1, 2016, accessed December 2, 2016, http://www.nytimes.com/2016/12/01/business/international/francois-fillon-marine-le-pen-economy-france-election.html?_r=2