Question

In 2013, France's labor unions won a case against Sephora to prevent the retailer from staying open late, and forcing its workers to work "antisocial hours." The cosmetics store does about 20% of its business after 9 P.M., and the 50 sales staff who work the late shift are paid an hourly rate that is 25% higher than the day shift. Many of them are students or part-time workers, who are put out of work by these new laws. Identify the inefficiency and figure out a way to profit from it.

Answer 1

Due to the new law forbidding Sephora to work at 'anti-social hours', inefficiencies arise in Sephora's business as Sephora is forced to forego 20% of its business. This leads to loss of revenue for Sephora. Also, it renders the staff working late night shifts unemployed. There must have been people who liked the prospect of earning 25% extra at night rather than working during normal hours, this law has dis-utility for those people. But this regulation has reduced the cost to the firm as now it pays lesser wages from before.