Most people (who don't own things like factories) need a regular, predictable, stable income to survive, and finding new employment is not always easy.
Therefore, people in most developed countries have agreed that by taking on an employee, it is contingent on the employer to provide some guarantee of stability. This is borne out by laws restricting firing in many cases, and requiring severance pay in the event.
The USA is an aberration in this regard - even the workers seem to value the rights of the employers far above the rights of the employees. I'm not sure why this is.
It also helps make it easy for entrepreneurs to start companies and create jobs in the US and is a direct reason why we don't see the same innovation in regulation-heavy regions.
If you're talking about why we don't see more visible commercial innovation from European countries then it's more about access to the enormous amounts of capital to build a big name startup like Uber etc.
Nobody notices the legions of small bootstrapped or seed to profitable software businesses across the EU.
German companies with more revenue than Amazon: Volkswagen, Daimler, BMW, Allianz, Siemens, Deutsche Telekom, Uniper, Bosch.
On the smaller end, Germany also has a comparable number of employer firms per capita as the U.S.
Empirically it largely is a myth that worker protection and consumer protection stiffles enterprises or innovation.
I would think that since innovation and growth (caused by innovative use of resources or increase in efficiency or novel products and services) in general should be relative to the population and its state to begin with, nominal GDP growth per annum would be a reasonable metric as a proxy for the wildly non-measurable "innovation in terms of GDP"; for reference, here's the data for 2018:
USA: 2.9% Canada: 1.9%
Sweden: 2.2% Norway: 1.3% Finland: 1.7% Denmark: 2.4%
Germany: 1.5% France: 1.7%
Ireland: 8.2% (not a typo, likely explained by expansion of business services from NA into EU) UK: 1.4%
Portugal: 2.4% Italy: 0.8% Greece: 1.9% Spain: 2.4%
I'm going with the OECD definition here: https://data.oecd.org/rd/gross-domestic-spending-on-r-d.htm
Seriously? Should they eat cake as well?
The ability to hire and fire fast is undeniably helpful for companies, and being able to quit and move to new jobs is just as useful for personal career development. It might not be for everyone, but it's not any less valid.
I guess eventually owning a factory is just impossible right?
1. https://www.sciencedaily.com/releases/2008/12/081217192745.h...
You make it sound like employers are all fat rich people smoking cigars while everyone else is in a sweatshop. The reality is that 99% of businesses are very small in size (as in, one owner and very few employees) and it's often much more a partnership than the power imbalance you are talking about. Yet the same laws apply whether you deal with a 10 persons company of a 100000 persons one.
But I agree, people act like the economy is nothing but fortune 500 megacorps and push for laws that make it harder for everyone to survive except for such businesses and their employees.
And people always miss the hidden cost, even when talking about the fatcats. If you require companies to provide a year of severance, then everyone just gets paid (n-1)/n as much on average, where n is the average number of years an employee is expected to stay.
Either way I'd expect fewer americans still work at large businesses than at small and mid-sized businesses combined.
And "small businesses" with fewer than 500 employees represent 99.7% of all businesses and yet they represent less than half the total workforce.
Is getting hired in Germany more difficult, compared to the USA? And if so, can you attribute that to employee benefits?
You guys act like there's no downside to cradle-to-grave nannying of the labor force. There is.
Like, if you are a PM at FAANG you can probably get a seed round for any kind of nonsense in SF, but in Germany you would need far more proof and preferably revenue (I don't know Germany that well, but it's similar across much of Western Europe).
To paraphrase a famous quote, in the USA the workers don't see themselves as workers, but as temporarily down-on-their-luck owners.
It's funny how it started out as a criticism of people who think that the government should have more control of how businesses operate, but has been paraphrased so many times that it's now used as a way to criticise people who want to minimize government involvement in business.
It's hilarious applying it here, given the situation described was reversed. Your position is that the worker who doesn't own the factory should dictate what the factory owner should pay because of a power imbalance.
Weird.
Perhaps the issue is having difficulty telling the difference between workers and factory owners in general.
By Ronald Wright.
You want to balance the power? Make it easier to be an employer, not hinder it.
Swedish worker unions sees the success of the business as success of the employees and will help get there for example by fair to both sides collective agreements.
This means for example that unreasonable demands from employees will be blocked, and if the employer needs to cut down employees cannot refuse.
Why not, for instance, make the loss of a job be covered by saved union funds that are generated by the union as a whole? The only reason the business is tagged as the responsible party in Europe is historical cruft.
No one has a right to payment if they do not provide services.
The main difference, of course, is that in countries that require this sort of thing, it's required - but requiring certain implicit terms in employment contracts is a regular thing in the U.S. as well - there's all kinds of regulations and case law on what sorts of employment contracts are valid. Saying that something like severance is a necessary requirement is a difference of degree, not of kind.
I do think there are a few places where this policy breaks down. For example, the additional transaction cost makes hiring decisions "stickier." I think this hurts the employee as well as the employer.
I don't quite understand the power imbalance here. My employer requires my labor and I am willing to trade my labor for money. If I'm not happy with the arrangement I'm free to find someone else to trade with.
There's only a power imbalance if workers are prevented from organizing, or if they (for whatever reason) refuse to organize. Or if they workers are very easily replaceable.
Obviously, if you're one of 200 workers, you can't negotiate evenly with the ownership as 1/200th of the company's workforce. Same goes if you're an unskilled worker who is easy to replace. However, even then, if you organize with all 200 of your co-workers, you are closer to a balance in negotiating power since it would be hard for said company to replace all 200 workers at once.
