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Surprisingly, severance is also mandatory in Argentina and many other "under development" countries. I'm absolutely amazed at how people in the US are so again

Surprisingly, severance is also mandatory in Argentina and many other "under development" countries. I'm absolutely amazed at how people in the US are so against severance being mandatory.

doctorwhat 7y ago
Americans are amazing like that. "Free healthcare? That's communism!!!"
- neuronic 7y ago
  Can we stop calling this free healthcare? It's not free. It's just vastly better organized in a way that (largely) protects consumers from capitalism where it doesn't belong.
GarrisonPrime 7y ago
Argentina and Germany are hardly in rosy positions at the moment. “I like free money” is hardly a good argument to support statements like “it just makes sense”.
- bryanrasmussen 7y ago
  what country is in a rosy position at the moment? and what is that country's worker's rights position?
- NicoJuicy 7y ago
  > Argentina and Germany are hardly in rosy positions at the moment. That's not an argument also, Germany is actually doing very well for everyone ( civilians, business, healthcare, innovation, ...) They are almost launching their contact-tracing app, while the poor, that need it, in the US get 1200$ in the next 3-6 months, lol. The rich get 1.700.000 $ though, that's "normal". Good job! /s Perhaps you were talking about the federal state saying that states have to look for their own medical supplies? That's nice
sneak 7y ago
It’s a violation of consent. Consent can be withdrawn at any time, with no further obligations or liability. That’s key in a free society. Employment is a transaction, like any other. Doing some business yesterday is no guarantee of business tomorrow.
- Scarblac 7y ago
  Employees are in a much weaker position than companies, they are not in an equal position so consent doesn't come into the equation, as far as I'm concerned.
  - sneak 7y ago
    Yes, that’s the common argument for it (which of course does not address the violation of consent issue). I was simply replying to WhyNotHugo’s amazement and trying to clarify why many people feel the way that they do.
- omginternets 7y ago
  By that logic, all contracts are violations of consent. You'll forgive us for not being convinced by your argument.
  - sneak 7y ago
    I’m not sure I follow that logic. Written, signed contracts where the agreeing parties are not being coerced is presently our gold standard for opt-in consent.
    - omginternets 7y ago
      >Written, signed contracts where the agreeing parties are not being coerced is presently our gold standard for opt-in consent. Except that you can't later withdraw your consent. You said that was "a violation of consent". Which is it?
      - 7y ago
kofejnik 7y ago
interesting... what if mandatory severance and other (supposedly) nice things are the reason those countries are underdeveloped?
- zwirbl 7y ago
  those countries like Germany, Austria, etc?
  - eitland 7y ago
    Let's add Norway and probably Sweden as well to that list.
    - neffy 7y ago
      And Iceland, which is as free-wheeling a capitalistic state as anyone could want under the hood. Making employers responsible for severance pay is a way of aligning costs with information asymmetry, and also trying to make employers at least a little sensitive to the impact their whims can have on real people's lives.
- CraigJPerry 7y ago
  Seems unlikely to find a mono-causal relationship in something as complex as a national economy. It’s interesting though, how would you go about establishing a proof?
- fakedang 7y ago
  I wouldn't mind a stance which promotes human welfare over economic growth.
  - brigandish 7y ago
    Since economic growth tends to go hand in hand with better access to health services and greater social freedom, it does. I always enjoy Hans Rosling going through the stats, if you’ve time it’s well worth it https://youtu.be/FACK2knC08E https://youtu.be/FACK2knC08E
saiya-jin 7y ago
Well its a society that lacks some basic societal qualities many others find quite necessary to call the society well developed. Like taking care of those in need, weak, disabled etc. The thing is, the state is setup to prefer overall economic performance over 'being nice and generous', so tons of shortsighted people think along the lines of 'well I am doing fine, I don't want to support others in need, thus I can have more' and so on. The logic is stupid of course, we all live in society so well-being of your fellow countrymen transform into your well-being too in many direct and indirect ways. But if you are told from birth your country is the best, has the best system, all others are worse, cash is the king and your job is the most important aspect of your worthiness as a human being, well... it ends up in similar system. Don't take me wrong, its fantastic to be super rich and powerful in US (just like anywhere else), its great to start/own company there, but it progressively sucks the more you are poorer, much faster than in any other western society.
tinyhouse 7y ago
I'm not very familiar with the topic. But my current and previous US companies both provide decent severance to let go employees. They do it mostly to ensure employees don't talk or try to sue. I assume most good companies in the US follow. It's also important that people can get unemployment benefits for at least 6 months after losing their job. I'm not sure how that works in the US. I'm guessing it changes per state like everything else in the US.
tcard 7y ago
Other things equal, if companies need to pay severance, employees get paid less each month, because companies need to take into account expected severance costs in their total labor costs and there's less money left for other benefits. So all employees effectively pay for layoffs, which goes against you if you're not the one that gets laid off. (I am very much in favor of mandatory severance and generally other kinds of safety nets.)
- hnhg 7y ago
  This forgets the high likelihood that the amount that would have been paid as severance goes to the pockets of the owners and leadership. The market pays what the employees are worth, not what is left over after costs.
- onedognight 7y ago
  > So all employees effectively pay for layoffs, which goes against you if you're not the one that gets laid off. Or you could say that the company needs to save the profit generated by your position until it equals your anticipated severance before paying dividends from that profit. So it’s still a drag on profits, but it has nothing to do with other employees.
- ratww 7y ago
  > So all employees effectively pay for layoffs, which goes against you if you're not the one that gets laid off. Sounds like a very acceptable compromise. I'm happy to chip in. I'm also happy that I pay taxes for universal healthcare so that I can take advantage of that when I'm in a disadvantaged position, but that's me.
- altacc 7y ago
  Having done budgeting for hiring employees in the UK, for small and medium sized companies, the factors that went into calculating staff costs never included any severance or redundancy factors. Paying redundancy is relatively rare, so doesn't need allocated funding until you're in that process. When you're employing people you're not already thinking about their future exit. You hire based on your growth, so you're usually optimistic about the future and thinking about employees being long term. If not you hire contractors, who you can lay off easily. Part of this is that you can't just fire people without good cause and without following a process. There are probationary periods to allow the hire to be let go if they don't work out in the first 6 months or so, but after that you're into a long "managing them out of the business" process that may or may not end up with a pay off.
mathattack 7y ago
The theory of weaker led on severance is: 1 - If you make it too hard to let people go, companies will be less willing to hire. (You’ve added a cost to the employee) 2 - If you make the cost of severance too high, it will kill companies that might otherwise have a chance to squeak through. There are plenty of good arguments on the other side (companies offloading social costs to the govt, etc) but these two are consistent with economic theory on labor supply and demand.
- neuronic 7y ago
  Yea, economic theories that all assume that consumers are rational actors. Thank you, next.
  - have_you 7y ago
    >>Thank you, next. So have you run a business where you had to hire employees?
- jazzyk 7y ago
  Yeah, but because it is o easy to fire, some companies (especially startups which just got some VC money) over-hire and then are forced to let people go. This creates a never-ending hamster-wheel of hiring-firing - not good for the employee and not good for the company. Also, if paying 1 month of severance is too much for a company, then perhaps it is not run well and should be allowed to fail?
  - devin 7y ago
    Too reductive on your last comment. I want to agree with you, but the world is complex. Money doesn't grow on trees, and there's only so much that even a well run business can do. Particularly in the early stages of a company.
- tarsinge 7y ago
  I must admit that as a small business owner in France unfortunately I am unwilling to hire because it's so hard to let people go, so putting the weight only on companies is maybe not the answer.

Surprisingly, severance is also mandatory in Argentina and many other "under development" countries. I'm absolutely amazed at how people in the US are so against severance being mandatory.

doctorwhat 7y ago

Americans are amazing like that. "Free healthcare? That's communism!!!"

neuronic 7y ago
Can we stop calling this free healthcare? It's not free. It's just vastly better organized in a way that (largely) protects consumers from capitalism where it doesn't belong.

GarrisonPrime 7y ago

Argentina and Germany are hardly in rosy positions at the moment. “I like free money” is hardly a good argument to support statements like “it just makes sense”.

bryanrasmussen 7y ago
what country is in a rosy position at the moment? and what is that country's worker's rights position?
NicoJuicy 7y ago
> Argentina and Germany are hardly in rosy positions at the moment. That's not an argument also, Germany is actually doing very well for everyone ( civilians, business, healthcare, innovation, ...) They are almost launching their contact-tracing app, while the poor, that need it, in the US get 1200$ in the next 3-6 months, lol. The rich get 1.700.000 $ though, that's "normal". Good job! /s Perhaps you were talking about the federal state saying that states have to look for their own medical supplies? That's nice

sneak 7y ago

It’s a violation of consent. Consent can be withdrawn at any time, with no further obligations or liability. That’s key in a free society. Employment is a transaction, like any other. Doing some business yesterday is no guarantee of business tomorrow.

Scarblac 7y ago
Employees are in a much weaker position than companies, they are not in an equal position so consent doesn't come into the equation, as far as I'm concerned.
- sneak 7y ago
  Yes, that’s the common argument for it (which of course does not address the violation of consent issue). I was simply replying to WhyNotHugo’s amazement and trying to clarify why many people feel the way that they do.
omginternets 7y ago
By that logic, all contracts are violations of consent. You'll forgive us for not being convinced by your argument.
- sneak 7y ago
  I’m not sure I follow that logic. Written, signed contracts where the agreeing parties are not being coerced is presently our gold standard for opt-in consent.
  - omginternets 7y ago
    >Written, signed contracts where the agreeing parties are not being coerced is presently our gold standard for opt-in consent. Except that you can't later withdraw your consent. You said that was "a violation of consent". Which is it?
    - 7y ago

kofejnik 7y ago

interesting... what if mandatory severance and other (supposedly) nice things are the reason those countries are underdeveloped?

zwirbl 7y ago
those countries like Germany, Austria, etc?
- eitland 7y ago
  Let's add Norway and probably Sweden as well to that list.
  - neffy 7y ago
    And Iceland, which is as free-wheeling a capitalistic state as anyone could want under the hood. Making employers responsible for severance pay is a way of aligning costs with information asymmetry, and also trying to make employers at least a little sensitive to the impact their whims can have on real people's lives.
CraigJPerry 7y ago
Seems unlikely to find a mono-causal relationship in something as complex as a national economy. It’s interesting though, how would you go about establishing a proof?
fakedang 7y ago
I wouldn't mind a stance which promotes human welfare over economic growth.
- brigandish 7y ago
  Since economic growth tends to go hand in hand with better access to health services and greater social freedom, it does. I always enjoy Hans Rosling going through the stats, if you’ve time it’s well worth it https://youtu.be/FACK2knC08E https://youtu.be/FACK2knC08E

saiya-jin 7y ago

Well its a society that lacks some basic societal qualities many others find quite necessary to call the society well developed. Like taking care of those in need, weak, disabled etc. The thing is, the state is setup to prefer overall economic performance over 'being nice and generous', so tons of shortsighted people think along the lines of 'well I am doing fine, I don't want to support others in need, thus I can have more' and so on. The logic is stupid of course, we all live in society so well-being of your fellow countrymen transform into your well-being too in many direct and indirect ways. But if you are told from birth your country is the best, has the best system, all others are worse, cash is the king and your job is the most important aspect of your worthiness as a human being, well... it ends up in similar system. Don't take me wrong, its fantastic to be super rich and powerful in US (just like anywhere else), its great to start/own company there, but it progressively sucks the more you are poorer, much faster than in any other western society.

tinyhouse 7y ago

I'm not very familiar with the topic. But my current and previous US companies both provide decent severance to let go employees. They do it mostly to ensure employees don't talk or try to sue. I assume most good companies in the US follow. It's also important that people can get unemployment benefits for at least 6 months after losing their job. I'm not sure how that works in the US. I'm guessing it changes per state like everything else in the US.

tcard 7y ago

Other things equal, if companies need to pay severance, employees get paid less each month, because companies need to take into account expected severance costs in their total labor costs and there's less money left for other benefits. So all employees effectively pay for layoffs, which goes against you if you're not the one that gets laid off. (I am very much in favor of mandatory severance and generally other kinds of safety nets.)

hnhg 7y ago
This forgets the high likelihood that the amount that would have been paid as severance goes to the pockets of the owners and leadership. The market pays what the employees are worth, not what is left over after costs.
onedognight 7y ago
> So all employees effectively pay for layoffs, which goes against you if you're not the one that gets laid off. Or you could say that the company needs to save the profit generated by your position until it equals your anticipated severance before paying dividends from that profit. So it’s still a drag on profits, but it has nothing to do with other employees.
ratww 7y ago
> So all employees effectively pay for layoffs, which goes against you if you're not the one that gets laid off. Sounds like a very acceptable compromise. I'm happy to chip in. I'm also happy that I pay taxes for universal healthcare so that I can take advantage of that when I'm in a disadvantaged position, but that's me.
altacc 7y ago
Having done budgeting for hiring employees in the UK, for small and medium sized companies, the factors that went into calculating staff costs never included any severance or redundancy factors. Paying redundancy is relatively rare, so doesn't need allocated funding until you're in that process. When you're employing people you're not already thinking about their future exit. You hire based on your growth, so you're usually optimistic about the future and thinking about employees being long term. If not you hire contractors, who you can lay off easily. Part of this is that you can't just fire people without good cause and without following a process. There are probationary periods to allow the hire to be let go if they don't work out in the first 6 months or so, but after that you're into a long "managing them out of the business" process that may or may not end up with a pay off.

mathattack 7y ago

The theory of weaker led on severance is: 1 - If you make it too hard to let people go, companies will be less willing to hire. (You’ve added a cost to the employee) 2 - If you make the cost of severance too high, it will kill companies that might otherwise have a chance to squeak through. There are plenty of good arguments on the other side (companies offloading social costs to the govt, etc) but these two are consistent with economic theory on labor supply and demand.

neuronic 7y ago
Yea, economic theories that all assume that consumers are rational actors. Thank you, next.
- have_you 7y ago
  >>Thank you, next. So have you run a business where you had to hire employees?
jazzyk 7y ago
Yeah, but because it is o easy to fire, some companies (especially startups which just got some VC money) over-hire and then are forced to let people go. This creates a never-ending hamster-wheel of hiring-firing - not good for the employee and not good for the company. Also, if paying 1 month of severance is too much for a company, then perhaps it is not run well and should be allowed to fail?
- devin 7y ago
  Too reductive on your last comment. I want to agree with you, but the world is complex. Money doesn't grow on trees, and there's only so much that even a well run business can do. Particularly in the early stages of a company.
tarsinge 7y ago
I must admit that as a small business owner in France unfortunately I am unwilling to hire because it's so hard to let people go, so putting the weight only on companies is maybe not the answer.