I've heard the difference between European safety nets/regulations and US systems described as "freedom to" vs "freedom from". If we accept your premise, that t

I've heard the difference between European safety nets/regulations and US systems described as "freedom to" vs "freedom from". If we accept your premise, that the hidden cost of regulating severance is a decline in salary, this fits the above difference. In the US, you have the "freedom to" be as irresponsible as you want, living at or beyond your means, but if you're laid off, you bear the responsibility of dealing with the consequences. In Europe, you have the "freedom from" having to worry about that situation, since the safety net will provide some time for you to get back on your feet, and the price was a lower salary (in effect, forced savings).