I could just as easily see companies treating their employees worse if hiring is made more risky. You won’t get the big severance payout if you quit. At the same time, it’s harder to get a new job somewhere else if employers are more reluctant to hire. This situation seems like it could lead to employers mistreating you and you having fewer options to get out.
No, I think barriers to hiring lead to market failures. This includes everything from severance to health insurance and other benefits. This is part of why the U.S. has such a hard time trying to introduce a public health care system: it takes away from employers’ ability to keep people working at a job they don’t want.
If there was no friction at all for employment, if people could join a company one day and quit the next day — and if employers could do the same — without worrying about losing health care or the ability to pay rent, then the labour market would be far more of a free market than it is today. Working should be 100% voluntary and free from coercion. That would also lead to higher pay for workers because those who don’t want to work could not be forced to do so.
