Friday, October 22, 2010

Don't be like French Students!

As you may be aware, France is being brought to a standstill by industrial action at the moment. The beef is that the retirement age is being increased from 60 to 62. In case you thought you might have misread that, you didn't. Even after the increase, the French will be retiring at least three years before Brits. And of course, they limit working weeks to 35 hours also, so while they are working for that shorter timespan, they put in less hours.

Of course, that's a very general argument and doesn't take into account how hard the French work in that more limited time - it may be they are more productive because they get more rest.

Nonetheless, students are rioting too about this! What is their rationale? Apparently they fear that because old people will be retiring later, there will be less jobs for them when they (eventually) finish their studies.

This highlights a mistake that as keen economics students Martin and I would like you to never make: The economy isn't a zero-sum game. I.e. there isn't a fixed number (say 40m) jobs to go around meaning that if one job is taken by one person, that's one job less left in the economy. The economy is a dynamic place where opportunities are constantly arising to set-up business and provide a product/service. Hence the potential number of jobs is always changing and so the economy is not a zero-sum game in economist speak.

So these students are perhaps even more deluded than the students that speak out on behalf of the NUS in the UK.

No comments:

Post a Comment