“The French complain of everything, and always.” – Napoleon Bonaparte
My first trip to France was a stopover en route to my two-year stint as a Peace Corps volunteer in West Africa. Although that visit lasted less than 24 hours, it made an impression on me. I was thoroughly taken with the big, gothic churches, the wide, tree-lined boulevards, the museums, parks, and brasseries.
K and I got married in Chad, and then traveled through Europe using French travelers’ checks as a precautionary measure against having them stolen. When my wallet disappeared in Athens, I promptly reported the missing checks to the French bank and asked to have my lost money replaced.
“We will be happy to do that,” the bank officer told me, “as soon as you find them and replace them.”
“Find them and replace them? How am I going to do that?”
“I’m afraid we can’t help you with that,” she said.
“But I don’t get it,” I protested. “The reason I bought travelers’ checks was in case I lost them. You have my serial numbers. I’ve reported that they were stolen. Why can’t you give me my money back?”
“As I have already explained to you quite clearly,” she said, fatigued by my denseness, “when you find them and return them we can reimburse you.”
That was my first experience with French bureaucracy. In the years since then, I’ve had many more. France continued to lure me with its good wine and cultural amenities, but almost every time I ran into a problem that needed some sort of “official” intervention (dealing with a misprinted ticket at the airport, trying to get a refund for a broken tote bag, returning a bad car to the rental agency, trying to get a better room at a hotel), I was disappointed.
Still, I loved France and kept coming back. And when BB, my friend and colleague, had the opportunity to start a new business in France about 10 years ago, I encouraged him to do so. But I was worried about the hassles.
And I was right to be worried. Almost immediately, his new business began to run into regulatory problems:
Setting up a new corporation was costly and time consuming.
Hiring new employees was expensive.
Advertising necessitated meeting all sorts of legal requirements.
Taxes were crazy high.
And getting rid of bad workers was almost impossible.
But that didn’t stop my friend. He moved his family to France. He bought a big, sprawling mansion in the country and got an apartment in Paris. His wife set up house and his children entered local schools.
France agreed with him and, despite continuing problems with the new business, he persisted. In fact, a few years after starting that business (a direct-marketing-based publishing company), he bought a book publishing company there. Then, more recently, he relocated the headquarters of another company he owned from Ireland to Paris.
I had a nice visit with him this morning. He still likes France, he told me, but admitted that the many hassles of running a business here are wearing on him.
Back home in Florida, I have a French friend, AW, who used to own several nightclubs in Marseilles. “They were very successful in terms of sales,” he told me. “But it just wasn’t worth it. After working 80 hours a week for five years, my clubs were the most successful in the entire city. Still, after I got through paying all the regulatory fees, employee benefits programs, and taxes, there was nothing left for me. I was making less money than my managers, who were working only 40 hours a week.”
Disgusted and despairing, AW left Marseilles and started over again in the U.S. “It’s not easy making a business work in America,” he told me. “There are plenty of regulations. But when you do make a profit, you can keep most of it.
“I am going to have to work very hard to be successful in the U.S.,” he said, “but one day I’m sure I will become rich.”
France is home to many very profitable big businesses. But its laws, its regulations, its bureaucracy, and even its culture make it very difficult for new companies to succeed. Besides the overwhelming number of legal and financial hurdles an entrepreneur must initially get over, he faces lots of additional challenges when he finally opens up the doors.
If you are considering the possibility of setting up a business in France, you at least need to be aware of the two biggest problems.
It’s very expensive to hire people.
Your obligations in terms of the French Social Security system, medical coverage, unemployment compensation (Number Two Son tells me it can range between 50 and 80 percent of pay, tax free), and other benefits are onerous. In many cases you have to pay for your employees’ transportation and lunch. And forget about firing the bad ones. It’s cheaper to keep them.
The French lifestyle makes it hard to make money.
Although it is surely not true, one sometimes gets the impression that the French don’t like to work. According to The New York Times, full-time employees average seven weeks of paid vacation each year. Maternity leave (for women and their spouses) is among the most generous in the world. The official work week is 35 hours. Holidays are frequent. And when all else fails, French workers go on strike.
According to the International Herald Tribune, a French sociologist named Jean Viard who studied French working habits came to the conclusion that they spend less than 10 percent of their lives doing their jobs.
This wasn’t always so. In the beginning of the last century, the French had a reputation for being very hard workers. In fact, the concept of the paid vacation did not exist in France before 1936. When it became law, it seemed outlandish to many. It was called “a law favoring sloth.”
But today, the conges payes (paid-leaves) are as much a part of French culture as the Academie Francaise. And who can blame them? If you were given the opportunity to take four to six weeks of paid vacation every year, wouldn’t you? And if you lost your job and could collect 50 to 80 percent of your salary, tax-free, while you sat at home eating Snickers bars, why would you go back to work?
This is not meant to be an anti-France essay. I have loved France for 30 years, and so I feel entitled to worry about her future. Although there are undeniably tens of millions of Frenchmen who still put in a good day’s work for a day’s pay, there are also undeniably millions of slackers and malcontents who expect to be taken care of by the state.
France is not alone in this regard. Many modern democracies – including the United States – face the same problems. But when you mix an aversion to work with a love for bureaucracy, you have a potent poison for entrepreneurs. And because small businesses are responsible for most new growth and employment … that’s not a good thing for a country’s economy.[Ed. Note: Mark Morgan Ford was the creator of Early To Rise. In 2011, Mark retired from ETR and now writes the Palm Beach Letter. His advice, in our opinion, continues to get better and better with every essay, particularly in the controversial ones we have shared today. We encourage you to read everything you can that has been written by Mark.]