France Burns for Its Sins


By Carol Matlack

in Clichy-sous-Bois Abdel Karim spent the afternoon of Nov. 7 as he spends most days -- loitering on a street corner in this drab Paris suburb. Karim, 26, was born in France, but economically and socially, he lives in a different world from most French people. Apart from a temporary chaffeuring job he once held, he hasn't worked since graduating from high school. He lives on public assistance, which covers his basic living expenses, including his rent in a high-rise housing project.

Like Karim, most of his friends and relatives are children or grandchildren of North African immigrants, and most are unemployed, too.

RAMPANT UNEMPLOYMENT. Good jobs "are reserved for certain people, and usually it's white French people," he says. Low-paying dead-end jobs are available, but Karim shuns them, figuring he's better off staying on welfare.

Listen to Karim, and it becomes easier to understand how Clichy-sous-Bois became the epicenter of a wave of rioting that has rocked France for the past 10 days. Years of misguided economic and social policies have created a deeply alienated underclass in the land of "liberté, égalité, and fraternité." Now, it is starting to explode.

While discrimination has fanned the flames, the underlying problem is the French economy. Growth has hovered at around 2% for several years, and this year it's only about 1.5% -- far too low to create jobs for young people entering the labor market. Indeed, 23% of French people under 25 are unemployed, vs. 15% in Germany and 12% in Britain. In immigrant neighborhoods, the unemployment rate by some estimates tops 50%.

HIGH TAXES, LOW GROWTH. True, France's generous welfare state cushions some of the pain. But it doesn't ease the bitterness of people like Karim, who laments that "the good life" is permanently beyond his reach. Moreover, the welfare state contributes to the slow-growth economy.

A bloated public sector consumes nearly 50% of France's economy, and businesses are saddled with heavy taxes to pay for welfare, unemployment, and other benefits. Strict antilayoff rules and other labor regulations make employers even more reluctant to hire.

France has compounded the economic problem with a curiously passive approach to integrating racial and ethnic minorities, particularly Muslims and Africans who make up an estimated 10% of the population. Under French law, they are to be treated equally with other French people.

But France - ostensibly to promote equality and integration - also has made it illegal to collect data on peoples' racial and ethnic backgrounds. That makes it extremely difficult to document the discrimination and other problems that many French minorities complain about. Nor have there been major efforts to draw minorities into government or into high-level jobs in business and the news media.

EXPLOSIVE SPARK. Abdel Karim hasn't taken part in the rioting -- but he says he knows people who did, and he understands their anger. "It has been years since young people have found work," he says. "We don't have confidence."

At the same time, young people in the neighborhood are routinely stopped by police for questioning. Indeed, the rioting was touched off on Oct. 27 when two teenagers were electrocuted when they hid in an electrical substation in Clichy-sous-Bois to avoid a police sweep through the neighborhood. Now the police are back, and their work is anything but routine.

Matlack is Paris bureau chief for BusinessWeek

with Esha Bhandari


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