Hollande and Youth Unemployment

After recent riots, French President François Hollande promises ’s to allow certain tax exemptions on companies that hired young workers from suburbs with high unemployment. What in effect such a policy acknowledges is that high payroll taxes on French companies discourages them from taking on new workers. This must be because the cost of their labor is, thanks to the taxes, higher than its economic value. Only by lowering the taxes can their labor be made economically worthwhile for an employer.