Opinion

The Great Debate

With unemployment high, France forces stores to close early

By Peter Gumbel
September 25, 2013

The French like to refer to the Champs Elysées in Paris as “the most beautiful avenue in the world,” and 300,000 people stroll up and down it every day to see for themselves, many of them tourists looking to shop. No surprise, then, to find that retailers from Nike to LVMH are willing to pay premium rents for space on the avenue, which runs in a straight line from the Place de la Concorde up to the triumphal arch at Etoile.

Just don’t try to buy anything in the evening. This week a Paris court of appeal ordered the cosmetics chain Sephora to close its flagship store on the avenue at 9 p.m., rather than staying open until midnight during the week and until 1 a.m. on Fridays and Saturdays. It was the latest ruling over store-closing hours that has already forced several other big name retailers in Paris both on and off the avenue to close early, including Apple, France’s Monoprix and the Japanese clothing retailer Uniqlo. Two other stores on the Champs Elysées, Abercrombie and Fitch and perfumer Marionnaud, are also facing legal action.

France has a raft of regulations governing shopping, and its labor unions ensure that they are strictly enforced. As well as 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. The Swedish clothing retailer H&M fought a long legal battle against the Paris city authorities before it won permission in 2008 to open on the Champs Elysées; City Hall vetoed the plan on the grounds that it was one clothing store too many, and would change the character of the avenue. The issue was finally decided in H&M’s favor by the Conseil d’Etat, the nation’s highest administrative court.

For the most part, these rules just provoke a Gallic shrug in France itself. But at a time when the national economy remains stuck in a rut and unemployment continues to rise, this latest ruling on Sephora has struck a raw nerve. The case was brought by a consortium of labor unions, which has been zealous in its attempts to have the store-closing hour law enforced, arguing that it needs to protect workers from unscrupulous owners who force them to work antisocial hours. But that logic is patently untrue in this case.

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. The judge refused to take into consideration a petition they presented to the court, saying the case was a matter of public order, so now they are taking their campaign online, including with a Facebook page. Sephora says it will appeal the decision.

Political reaction has been swift. Pierre Lellouche, a member of parliament for Paris whose constituency includes the Champs Elysées, called the regulations “suicidal,” and said it was “scandalous in our country, where the unemployment rate is above 10 percent of the active population, that unions should fight against jobs, and even more worrying that the law should be on their side.” The national employers association has called for the laws to be changed. And an association of store owners on the Champs Elysées has worried publicly about wealthy tourists going elsewhere to shop, including London, where there are far fewer barriers to their ability to spend money.

It’s not clear whether this case might turn out to be a tipping point in favor of consumers. What is certain, however, is that France remains wedded to highly regimented forms of business that are hard to change, and which place protection of the status quo far ahead of the interests of consumers and the economy as a whole. While there is a French anti-trust commission charged with promoting greater competition, it is relatively weak and overshadowed by a more powerful and much larger sister agency that enforces the regulations. And France’s code of labor legislation, with its 981 articles, is about four times the volume of that of neighboring Germany, itself no slouch when it comes to protecting workers’ rights.

Two big department stores near the Paris Opera, Galeries Lafayette and Printemps, both very popular with tourists, have calculated that they could increase their revenues by at least $200 million per year and employ an additional 1,000 full-time staff if they were allowed to open more often on Sunday. Unlike the Champs Elysées stores, which have a legal exemption to open on Sundays because they are in zones classified as highly touristic, the two department stores are only allowed to open on five Sundays per year.

Retailing regulation is the most visible, but many other consumer-oriented businesses are also subject to rigidly-enforced rules. Taxis, hairdressers, public notaries and many others are governed by “obsolete regulation,” according to an official 2008 report on ways to open up the French economy, written by Jacques Attali, a writer, consultant and former top government official, who argued that it was time to blow up the rules and liberate producers and consumers alike in order to create jobs and give a boost to the economy. Among other things, he recommended eliminating a 1973 rule that limits the numbers of bars with alcohol licenses; enabling hairdressers with five years experience to open a salon without having to pass a special exam; dumping a quota system that limits the number of pharmacies, and breaking a taxi monopoly in Paris that restricts the number of cabs in the French capital and can make it hard to find one at peak hours or when it’s raining.

Cab drivers immediately staged a protest that blocked streets for hours, and the government responded by shelving any reform plans. That sounded the death knell for the Attali report more generally.

So far, President François Hollande and his socialist government have shown no signs of wanting to change the status quo. To do so would mean taking on the labor unions, a core constituency. But when jobs and growth are so obviously at stake, letting people buy lipstick at midnight seems a small price to pay.

PHOTO: People walk near the Virgin Megastore building on the Champs Elysees in Paris May 14, 2013. Picture taken May 14, 2013. REUTERS/Benoit Tessie

Comments
11 comments so far | RSS Comments RSS

If French labor unions are anything like American labor unions, be careful.

Three weeks ago the leader of the AFL-CIO, America’s largest labor union, went on TV in support of the so-called immigration reform act of the Gang of Eight senators, endorsing the plan to allow amnesty to 11 million illegal immigrants, and, greatly increasing the number of H1B Visa’s issued for foreign engineers, mostly from India, to be brought to America to take American jobs.

The lesson is, while there are some good labor unions, the big ones are totally corrupt. Rather than defending the American workers, the AFL-CIO leaders stab the workers in the back.

I hope the French labor unions are not so treacherous to their members.

Posted by AdamSmith | Report as abusive
 

Que c’est triste la France,
que c’est ridicule,
que c’est sans avenir

Posted by reality-again | Report as abusive
 

This article seems to attempt to frame the debate as labor unions versus employees and consumers – if it were legislation, one might call it a ‘right to work’ argument. In fact, this is an effort to export the ‘unions are bad’ disinformation campaign so successful in the US to Europe. Global corporations will use all their might to dismantle unions to further exert downward pressure on wages worldwide, and their spokesmen become more numerous by the day.

Posted by brianpforbes | Report as abusive
 

@AdamSmith – French labor unions make the American unions look like sleeping pussycats.

Posted by euro-yank | Report as abusive
 

Unions are a joke.

Posted by keebo | Report as abusive
 

@brianpforbes, if unions are supposed to help the workers why did the AFL-CIO recently go on TV endorsing and supporting amnesty for the 11 million illegal immigrants in the US?

And the AFL-CIO endorsed and is currently promoting the current Senate plan to expand the issuing of H1B Visas, currently at 85,000 per year, to allow American corporations to bring in foreign engineers, mostly from India, into American facilities? All the while there are millions of excellent American engineers out of work, and wage rates for engineers in America are going downward.

Both these actions drive down wage rates for American citizens, yet the union leaders are actively promoting these actions, apparently feeling that the more members they have, the more powerful will be their own positions as union leaders.

They don’t care about their own members, whom they stab in the back.

I’ve seen other unions do good things, but this action by the AFL-CIO makes me realize how utterly corrupt the biggest ones can be.

How do you otherwise explain these current actions by the AFL-CIO leadership?

Posted by AdamSmith | Report as abusive
 

The labor unions of France are clearly responsible that increasing economic difficulty and increasing unemployment for everyone else will be that country’s future.

A “consumers be damned” attitude is really a “citizens convenience” and “tourist’s money” be damned one. Obviously it IS “scandalous in a country, where the unemployment rate is above 10 percent of the active population, that unions should fight against jobs, and even more worrying that the law should be on their side.

The interests of consumers and the economy as a whole will ultimately prevail,, that much is cetain. The only question is how long it will take, and whether President François Hollande and his socialist government will survive the inevitable and increasing economic and societal turbulence of such fundamental and necessary change.

Posted by OneOfTheSheep | Report as abusive
 

Generally speaking, I really like French attitude towards slavery.

Posted by satori23 | Report as abusive
 

I’ve not been to France in many years.

But just from what I read it seems to me that this complaint about the stores closing early is a red herring as @brianpforbes suggests.

The stores closing a 9 pm in this shopping area, that is not a big deal. What if Disney World in Orlando, Florida USA decides to start closing at 9:00pm instead of 10:00pm. Is that a big deal to be debated nationally? No, it is a red herring, something to distract the attention from the real issues.

THE REAL ISSUE
And the real issue in France, Britain, Germany and the USA, all the advanced economies, is the same: immigration exploding and has had a gigantic impact on the middle class citizens of those countries. Immigration is flooding cities, filling up scarce housing, driving up rents. Immigration is flooding labor markets, displacing citizen workers, and driving down wage rates rapidly.

Immigration harms the citizen workers, and makes the employers and landlords immensely wealthy. Immigration causes huge profits and horrible cultural and civic destruction.

The UN released data yesterday about immigration worldwide.

http://finance.yahoo.com/news/countries- most-immigrants-161952285.html

The billions of poor people in the worlds darkest corners can now use cell phones, the internet, discount airfares and free bankcards to move to any wealthier country they choose. The days of sailing ships are gone.

The bank will issue them a credit card. Why? Because there is immense profit to be derived from immigration. That is why the business lobbies of France, England, Germany and the USA give so much money to lobby for increased immigration amnesties.

Stores staying open until midnight or until 9:00pm? That is a comical red herring to divert the citizen’s attention while their jobs are being given to immigrants who will work for a pittance.

France, USA, Germany, Britain – we all suffer from the same weakness: Our national immune systems simply don’t recognize the foreign organism invasion that is quickly devouring our national civic bodies.

That is the issue of the day, and it is an existential emergency.

Fancy stores closing at 9:00pm rather that staying open until midnight? That’s a good topic for the ladies garden club. We are fools to even discuss it when our very existence is threatened by national emergency.

Posted by AdamSmith | Report as abusive
 

The fancy stores in Paris’s Champs Elysees are now closing at 9:00pm! That is the red herring that the business lobby throws with their left hand to divert the attention.

But in their right hand, they swing the sword that destroys the French middle class. But how could they do otherwise, the profits from immigration are just too vast for anybody to resist.

The world’s poorest people are coming soon to the France, Germany, Britain, and the USA. Is your neighborhood ready to receive them?

Largest 40 Countries ranked by population

1. China 1.3 billion people
2. India 1.2 billion
3. United States 315 million
4. Indonesia 237 million
5. Brazil 193 million
6. Pakistan 182 million
7. Nigeria 166 million
8. Bangladesh 152 million
9. Russia 143 million
10.Japan 127 million
11.Mexico 112 million
12.Phillipines 92 million
13.Vietnam 88 million
14.Ethiopia 86 million
15.Egypt 83 million
16.Germany 80 million
17.Iran 76 million
18.Turkey 75 million
19.Congo 67 million
20.Thailand 65 million
21.France 65 million
22.United Kingdom 63 million
23.Italy 59 million
24.Myanmar 53 million
25.South Africa 52 million
26.South Korea 50 million
27.Columbia 47 million
28.Spain 47 million
29.Ukraine 45 million
30.Tanzania 44 million
31.Kenya 44 million
32.Argentina 40 million
33.Poland 38 million
34.Sudan 38 million
35.Algeria 38 million
36.Canada 36 million
37.Uganda 34 million
38.Iraq 33 million
39.Morocco 33 million
40.Peru 30 million

http://en.wikipedia.org/wiki/List_of_cou ntries_by_population

Posted by AdamSmith | Report as abusive
 

”Competitiveness” can hold many meanings, yet in the minds of European policymakers it primarily means ”work more for less money”. People are keen to extend praise for the strength of German economy and level of employment without giving much thought of what underpins such performance and it’s a reality in which you have millions of people (immigrants included) who are competing for part time jobs without bottom line (no minimum wage). It’s pretty darn easy to ”beggar your neighbors” with such set-up.., not to delve into reality of those millions at the bottom.

One of the French ministers made, imo, a pretty good case about it recently:

http://www.bbc.co.uk/news/world-europe-2 4145126

Posted by satori23 | Report as abusive
 

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