Wednesday, May 09, 2012

Ceci n'est pas une pipe employee #50 - Business Week: "Why France has so many 49-employee companies": "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."


Anonymous said...

I wonder what happens if the owner simply decides to shut the company down?

Anonymous said...

And that's why overseas investors won't put their money into French businesses... except they do. Investment is up.

Also, worker councils are a method of non-binding oversight that saves French taxpayers a ton of money while decreasing regulation.

And "2.4 times as many companies" is not just statistically meaningless, but likely undermines the writer's premise, since if avoiding a 50th employee were such a commonplace end run around a crippling labor code, the proportion would be far higher.

The statistic was no doubt promoted by a free market advocate and may literally refer to French companies with precisely 49 or 50 employees, but not smaller or larger ones. If the number is indeed that circumscribed, it's useless. It's also probable, since here in the U.S. there were 27.3 million businesses in 2008, of which 90,386 employed 100 or more people. 99 vs. 49 makes a difference, but at the higher cutoff America's at approximately 300 to 1. You'd have to dive down deep into the data and choose some seriously narrow criteria to unearth a measly 2.4 ratio.