Friday, October 4, 2013

Dirigiste et absurde: France and its labor unions

France and its labor unions are taking extraordinary measures to stay mired in recession.  They have a raft of regulatory rules that deter wealth creating voluntary transactions, like:

...strict limits on opening and closing hours, the rules only allow sales during certain periods of the year, price promotions are circumscribed, loss leaders are illegal, store sizes are limited and even the types of shops allowed to open up are regulated. 

But now the labor unions have won a case against Sephora to prevent the retailer from staying open late, protect workers from unscrupulous owners who force them to work antisocial hours. ...The cosmetics chain reckons it does about 20 percent of its business after 9 p.m., and the 50 sales staff who work the late shift do so voluntarily — and are paid an hourly rate that is 25 percent higher than the day shift. Many of them are students or part-time workers, and they have publicly expressed their indignation about being put out of work by labor unions.


  1. Ha! Nice to know the U.S. isn't the only country with business having labor union problems during a recession. Reminds me of Hostess' union conflict last year. Weird case where it seemed like there are almost 3 separate party interests: the company, the workers, and the union. The union is supposed to represent the workers' interests but in Hostess' case, the bakers union held everyone hostage and the company had to fold. Obviously, the biggest losers in that case were the workers (well, and maybe creditors too)! I wonder if employment at Sephora is contingent on union membership like many industries in the U.S.?

  2. Go figure, LVMH's 3rd qtr earnings report that Sephora's growth in Europe is the lowest among all key regions. LVMH missed on earnings and now has to look forward to being hamstrung by more government regulation in a country that accounts for 11% of its revenue.

  3. RE: Hostess, I believe the issue was the union representing the non-bakers.

    Bakers felt that the bakeries ran well, that Hostess union distribution was inefficient and would not be addressed short of bankruptcy. That the bakers were simply "giving" to allow distribution to remain inefficient (example, Twinkies and WonderBread were FORBIDDEN to share a truck, so two trucks to each store. Drivers were FORBIDDEN from displaying product, a separate worker drove to each store for that task), while they believed they added real value to the product.