The Result of Attempting to Control the Economy

France is famous for Paris, wine, and interfering with business. If you wanted to start a business in France I would call you insane because the French government will punish you for daring to bring a little prosperity to their country. Some of the laws France has on the books are downright stupid but it’s good to see business owners have found ways around them:

Here’s a curious fact about the French economy: The country has 2.4 times as many companies with 49 employees as with 50. What difference does one employee make? Plenty, according to the French labor code. Once a company has at least 50 employees inside France, management must create three worker councils, introduce profit sharing, and submit restructuring plans to the councils if the company decides to fire workers for economic reasons.

French businesspeople often skirt these restraints by creating new companies rather than expanding existing ones. “I can’t tell you how many times when I was Minister I’d meet an entrepreneur who would tell me about his companies,” Thierry Breton, chief executive officer of consulting firm Atos and Minister of Finance from 2005 to 2007, said at a Paris conference on April 4. “I’d ask, ‘Why companies?’ He’d say, ‘Oh, I have several so that I can keep [the workforce] under 50.’ We have to review our labor code.”

If you’re a business owner and hire more than 50 employees you’re suddenly in for a world of hurt. Thankfully France hasn’t made it illegal for individuals to own more than one company although I’m sure such a law will be in the works soon since these “exploits” are being brought to life. Such a ban would be entirely pointless since business owners would find another way around the new law but it makes entrepreneurs less willing to start new businesses and therefore the economy continues to suffer greatly.