FRANCE IN CRISIS: WELFARE, INEQUALITY, AND GLOBALIZATION SINCE 1980 by Smith PERSISTING INEQUALITIES Studies neglected to consider where the money comes from in the first place. Neglected to examine who was receiving the bulk of benefits SOCIAL WELFARE SPENDING = ECONOMIC REDISTRIBUTION? Welfare state misleading = implies social justice France equated commitment of high spending to equality and solidarity BUT French social spending financed with mix of regressive payroll taxes and regressive sales taxes From 1950-1980 France leader in income inequality Highly stratified society ?perpetually torn between its dreams of a more just society and its reluctance to give up its old comfortable but inequitable ways? France last western country to introduce income tax in 1965 4% of GDP Chief source of public revenues = payroll tax = disincentive to job creation French tax system hurts low-income and younger workers the most PRIVATE VICE, PUBLIC VICES: THE HIDDEN WELFARE STATE Tax evasion super common Income tax is not an important source of government revenue because of tax evasion High consumption tax ? burden France remains a ?low trust? society, in which people feel the weight of the state every time they make a purchase THE ABSENCE OF TRUST Low levels of social trust hinder efforts to reform ?social relationships marked by suspicion, bitterness ?? Citizens do not fully trust the state/politicians + attempt to escape its claim BUT potential source of generous benefits If more social trust = reform Society seems unjust and unfair, not a land of opportunity Rise of the FN = opposed tenets of Republic French only 24% ?high level of financial satisfaction? = more paid vacations and best health care in the world Tax system breeds distrust, but social welfare system does not A veil of ideology upheld by intellectual class and politicians of all parties, continues to ensure the public?s ignorance of and to obscure stark inequalities of income, of access to ?social rights? Birth/social privilege remains powerful INCOME INEQUALITY 1980s no major reform of taxation system The French does not get a good redistribution return on their social spending 1990s slightly more progressive LIMITED MOBILITY AS A FORM OF GOVERNMENT High inflation Low mobility to travel (cars) French workers have more job security but keep less of their income More security / less freedom Who would dare quit an unpleasant job to look for a new one? Long term unemployment, less freedom, less mobility of unemployment THE WELFARE STATE AND SOCIAL MOBILITY The French political and economic elite is chosen from an unusually shallow talent pool. The ENA and other grandes ecoles perpetuate a tiny, caste-like aristocracy of wealth and brains SOLIDARITY IN SICKNESS BUT NOT IN WEALTH Since the 1980s, class division in the realm of medical health care have increased in the UK with the private sector competing with the public for the care of the wealthy France has escaped this trend by continuing to spend a great deal of money and by accumulating annual deficits of billions of euros on its health system The way in which the French have coped with medical inflation had ensured that the wealthy have not broken away from the main system In france the manual worker?s pay roll deductions (as well as tax revenues) subsidize the private clinics frequented by the cadre Young, unskilled workers on short term contracts rarely receive complementary coverage Chief form of inequality in the French health care system OVER CONSUMPTION More prescription = more bonuses for doctors Low consultation fees. Encouraged self diagnosis, hypochondria and wasteful spending THE HANDICAPPED Loses out of the system 1975 handicapped integrated into the welfare system Hard to get around old towns French did not make tolerance of difference a key priority
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