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Germany's business boom vs. France's baby boom

French President Nicolas Sarkozy salutes a baby during a visit of a farm in the eastern French village of Lerrain. France has been having something of a baby boom lately.

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Kai Ryssdal: There's yet another round of 'What the heck do we do about the European economy?' talks scheduled for this weekend. Everybody will be in Washington for the Spring meetings of the International Monetary Fund and the World Bank.

Back home, though, on the continent, the discussion generally breaks down like this: Germany thinks other European countries ought to be more like Germany -- cut their budgets and improve efficiency. French President Nicolas Sarkozy has promised to do at least some of that if he's re-elected later this spring.

But as Christopher Werth reports, Germany might have a couple of things to learn from France.


Christopher Werth: Germany's healthy economy sounds like this: The hum of a factory steadily churning out high-end, manufactured goods. The goods are shiny new BMWs rolling off an assembly line in Munich.

Germany is ticking along just fine, even as the rest of Europe struggles, says Christian Schultz an economist at Germany's Berenberg Bank.

Christian Schultz: Unemployment is at historical lows. Employment is at historical highs.

For Schultz, Germany's prosperity is no mystery. A decade ago, he says, the country enacted tough labor reforms that make it easier to hire and fire new workers -- something France has yet to do.

But while Germany is the economic engine of the eurozone, Schultz warns that the country is entering what he calls its "Last Golden Decade."

Schultz: Germany has a big demographic problem. After 2020, overall German economic growth will fade away because of the country's shrinking population.

In other words, German factories make more Beemers -- but French families make more babies.

In central Paris, I met Boris Najman, Stephanie Mahieu and their two sons, Stelio and Kostia, in their modest, middle-class apartment. France is enjoying something of a baby boom, an advantage as employers replace aging workers in the years ahead.

Why are the French so "productive"? Stephanie Mahieu:

Stephanie Mahieu: Having a child in France is relatively cheap compared to other countries. This is it. This is France.

That is, the French government spends more than countries like Germany on generous childcare policies that help parents raise their kids. At age 3, Stelio just learned his ABCs at a state-subsidized pre-school that only costs around $180 a month.

Three-month-old Kostia goes to daycare for free.

Mahieu: And in addition, he's provided with food, milk. So everything is provided.

Provided free. Mom and Dad don't pay a dime.

Monika Queisser is an expert on such family-friendly policies at the Organization for Economic Cooperation and Development in Paris. She says when you add in other perks, like flexible working hours for parents, it all appears to do the trick.

Monika Queisser: The availability of childcare, according to research, seems to be one of the major factors in encouraging couples, families to have more children and not fear the dichotomy between work and family.

Which is why Christian Schultz at Berenberg Bank says even though, economically, France would benefit by modeling itself after Germany.

Germany has to come up with the same type of reforms as France has in the past to change their demographic outlook.

But nearly everyone admits there's no quick fix. Even if Germany's population were to start growing today, it takes a long time before babies are ready for the workforce.

In Paris, I'm Christopher Werth for Marketplace.

socalgail's picture
socalgail - Apr 21, 2012

I agree with the comments of jimvsmij. Clearly, the comments by Dr. Schulz are absurd. Lower population means better living standards for all. Just look at how the Black Plague, which wiped out 1/3 of Europe's population, gave rise to the middle class and precipitated the end of feudalism. Also, consider how increases in productivity, which are accelerating in Germany, reduce the demand for labor. Germany is on the right path, at least for the 99%. Of course, if you are part of the 1%, you have no desire to raise living standards. Rather you want increased population, to create a large labor pool which drives the cost of labor down and the demand for cheap goods up. One wonders if Dr. Schultz' opinion is not part of the disinformation project by the 1% and its hired teams of professors and economists to plant memes in the public mind, hoping they will take root. A similar "debate" was aired on the NPR program "On Point" here http://onpoint.wbur.org/2007/07/25/population-shifts-in-the-west. There is no question that the 1% are trying to end women's options for reproductive choice in an effort to maintain a large population of serfs whom they can farm for their own benefit in the coming decades.

Raven's picture
Raven - Apr 22, 2012

I could not agree more. Less people would mean more power to said people. In order to keep Butlers, maids, bodyguards, cooks, chauffeurs, gardeners, ETC.... there would need to be an excess amount of people in order to have people to fill in the many roles that the super rich keep now. A lower population would be non advantages to their lifestyle.

Raven's picture
Raven - Apr 22, 2012

I know that Marketplace has many programs and thus may be unable to intertwine them. As you last stated in "Robots Ate My Job" robots are displacing may people from their jobs at the low and middle ends and creating fewer jobs that require more education for better jobs that are being created. Thus, While France faces a population boom the amount of work will fall, and they will have a problem to deal with. On the other hand as job creation slows, and people are replaced with technology as has been the case over the last 50 years Germany will have less of a problem getting its people ready for the future. This is the model for the rest of the world to follow. Maybe it can be a segment for the marketplace to follow.

jimvsmij's picture
jimvsmij - Apr 20, 2012

This story is trying to say that Germany will have a problem because they do not produce enough children. How can this possibly cause Germany to to have problems later?? Say, for example, California is a huge manufacturing state with very low unemployment and next door Nevada is having a huge population boom. Wouldn't we just see more Nevada people coming in to fill the employment needs of California? Same with the states in the European Union. All Germany needs to do is to look south to Greece and they will have all the workers they could possibly hire through the foreseeable future. It is France who will be in trouble in the coming years. Much money needs to be collected to pay for such luxurious benefits that the French enjoy. When the future adults move to Germany and tax money is no longer available how hard will it be for them to reduce the amount of benefits given to their citizens? We live in a world much too overcrowded as it is. We need to find better ways to use the people who are alive now rather than focusing on creating new ones.