Why hire? French confront reasons for malaise
PARIS (AP) — Marc Winocour and his two sons have enjoyed some success transforming the family farm into a field-to-table company that includes bread ovens, delivery trucks and a boutique. Revenues are climbing more than 50 percent a year.
But even as customer interest grows, adding new employees to their team of 10 is a decision of last resort. For French business owners like them, the financial risk is too great and the government’s promises to lighten the highest labor costs in the world and overhaul 3,000 pages of work rules are too remote.
“When we are totally swamped, that is when we start talking about” hiring, said Emile Winocour, the older of the brothers. “Otherwise it’s dangerous for the entire business. The (payroll) charges are so high that our income has to already make up for the new position.”
President Francois Hollande’s Socialist government has a plan to lower such payroll charges, cut red tape and make it easier to hire — but only if it can win a confidence vote on Tuesday.
While France has the world’s fifth-largest economy, it is seeing no growth and unemployment has been stuck around 10 percent for half a decade. At the cost of fraying the country’s social safety net, the government is going for the cuts companies say they need in order to hire.
The reforms championed by Prime Minister Manuel Valls are the kind economists say are necessary across much of Europe, where growth has been disappointing for years and ground to halt in the second quarter of the year. Here’s a look at five French businesses and they would be affected.
FROM GRAIN TO JOBS
The Winocours represent the kind of promising small company that the French government wants to thrive, though it sounds strange to call them entrepreneurs.
Their profession — transforming grain into bread — is among the oldest known to man, and their farm has been in the family since 1895. The dawning realization that the Moulin des Moissons farm, a smattering of fields in Grosrouvre 40 kilometers (25 miles) outside Paris, would not be viable much longer pushed them to consider opening a bakery.
“Why don’t you bake bread?” Jules asked his father, Marc, 10 years ago. Since then, the family expanded operations. About 20 percent of the grain they grow is now baked into their own bread, sold in grocery stores, restaurants and, since April, an eponymous boutique in northern Paris.
“What gets us up in the morning — and we get up rather early — is our farm,” said Emile Winocour, sitting in the basement of the boutique with his family. “There is another satisfaction — being able to create jobs, allowing families to make a living, even on our small scale.”
To do that, they say they’ll need a drop in payroll charges, which they described as their single largest expense.
Alexis Maldjian, who runs a garage off the Champs-Elysees, singles out red tape as a key issue. The government recently cracked down on late store openings on the famed avenue, saying they violate labor restrictions intended to improve working conditions. The move caused a decrease in hours for night shift workers who used to park in the garage. Maldjian now makes 1,800 euros a month less.
And while his revenue drops, corporate charges and taxes rise four to five percent every year, he says.
“When you do the math, you don’t know what to do any longer. So you have to look for the slightest little places to save, the smallest things you can live without and not pay for to try to eke out a living,” he said.
He was pessimistic about Valls’ chances at improving the economy.
“France is very hard to reform. He can’t even manage the problems within his own cabinet so managing France is going to be difficult,” Maldjian said.
Socialists hold a majority in the parliament, but their ranks have been eroded by infighting. Valls requested the confidence vote after a Socialist insurrection in the Cabinet prompted a government reshuffle, but the disaffection has yet to die down and the vote’s outcome is not assured.
Jean-Claude Bourrelier, president of the home improvement chain Bricorama, hopes the confidence vote succeeds and frees the government to take bolder steps to loosen labor rules.
Bourrelier is at the other end of the economic spectrum, boss of nearly 5,000 employees in a publicly-traded company with stores in four countries. Wearing the canary yellow that is the store’s trademark, he says there has been little progress in making things easier for those who want to hire.
An advocate for keeping stores open on Sunday — currently limited under French law, like night hours — Bourrelier said all entrepreneurs want is the freedom to operate.
He said opening stores outside France taught him that every country has rules to adapt to, “but things are especially heavy in France. And, furthermore, there is the impression that the rules of the game aren’t the same for everyone.”
Agnes Lo Jacomo, president of France’s employers’ lobby and a business owner herself, said change is already too long in coming.
“A certain number of our young people can no longer envision what France will be in 20 years, and they are increasingly going abroad,” she said.
Valentin Goux was among those to leave for what he hoped would be an easier business climate in London. He and a childhood friend launched “Monsieur London” in 2012 as an online boutique selling handcrafted men’s accessories. They never seriously considered setting up in France, Goux said.
“We thought London was a better place for creativity and the type of company we were going to start. We also thought London was a more welcoming place for entrepreneurs, where people are more open to new ideas. In France we would have had more (financial) help from the state, but on the other hand in London we have fewer constraints,” Goux said.
Goux said his business ultimately might expand into France as part of a plan to grow into Europe. Returning home even for brief visits can be disheartening.
“Our generation grew up in the crisis and I think people have got used to it,” he said. “When I come back to France and I see all my friends that are educated and not doing anything, it’s really depressing.”