OECD Pits Active Workers Against Retirees

Youth is the big loser. Youth has been hurt most by the economic crisis that has raged since 2008, according to an OECD report published on March 18. In France, child poverty (11% in 2010) and poverty among young people aged 18 to 25 (11.8%) “has risen again, since the beginning of the economic crisis.” No fewer than 13.2% of young people are neither in school, in job training, nor have a job, as against 10.6% in 2007. More generally, the OECD, made up of the world’s 34 “richest” countries, notes that “workers, jobseekers and their families continue to be exposed to the consequences of a weak recovery and depressed income levels.” Nearly one in six (15.4%) working - age people lives in a “jobless household” “where no one is working, higher than the EU average (13.8%), and significantly worse than in the United States (12.8%),” the OECD states.

But the OECD does not limit itself to this picture. It questions France’s social policy in the context of economic crisis. The report emphasizes the burden of social spending: “France spends roughly 1/3 of GDP on public social protection – a higher share than any other country in the OECD area, where the average is 22% of GDP.” And yet, the report admits, “social policies have played a key role in protecting household incomes.” Of course, “The long-term policy commitment to family/work reconciliation measures has also helped to keep fertility rates at 2 children per woman, while most other OECD countries have seen a decline since the onset of the crisis.”

The OECD – watch-dog of free-trade dogma

But, having paid this compliment, the bad news comes. Indeed, the OECD thinks that in a context of severe budgetary pressure, France cannot maintain its social policies. To back up its prescriptions, the OECD uses the familiar strategy of playing off one generation against another. In France, “overall social expenditures remain heavily tilted towards the elderly,” whereas “the share of public spending supporting working-age people and their families is below the OECD average,” the report underlines. It also insists that the poverty rate among children and young people is higher than the poverty rate among the elderly (5.4%), the gap being one of the biggest found in the OECD countries. As a result, “with the government’s commitment to future consolidation,” “there is increasingly a trade-off between maintaining generous [sic] pension provisions, and ensuring effective support for those most affected by labor-market difficulties.” More generally, for the OECD, which more than ever is the watchdog of free-trade dogma, “France needs to consider carefully how to target its social spending,” and to carry out “a review of benefits for higher-income groups.” The OECD cites as an example the the recent measures to reduce family-related tax concessions for high-income earners, before recommending measures to reduce benefit ceilings in the unemployment insurance program.”