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> If there is another economic crisis and nobody is hiring, preventing companies to fire people will make the crisis even worse. Companies that know firing is
by Jochim 4y ago
> If there is another economic crisis and nobody is hiring, preventing companies to fire people will make the crisis even worse.
Companies that know firing is difficult will hire less aggressively. They are also more likely to accept a deeper reduction in profits before laying people off. The result is a higher threshold of economic instability before the company lets people go. The US approach is like playing speed Jenga, you build something that will inevitably collapse.
Mass layoffs only serve to deepen an economic crisis. You remove a huge sum of disposable income from the economy which only contributes to more closures/layoffs. The result is an increased concentration of assets in the hands of those with the most access to capital during the crisis.
- atemerev 4y agoThis is why there are so few growth-oriented startups in Europe, and so few chances to compete with large companies who can afford absorbing such losses. And (at least in tech) such low salaries, compared to US-based companies. European economic model simply cannot compete. US domination in tech is growing each year.
- Jochim 4y agoFrankly I don't think the US model is something we should be competing with for the same reasons I don't think we should be emulating sweatshops in China or India. Based on recent stock trends their value is largely hypothetical and based on both hype and the assumption that they're able to grow indefinitely. I'd be happier to exclude them from our markets entirely. The growth-oriented model that's become popular in the US looks increasingly like a cancer that only serves to concentrate wealth. There were a few early successes but it seems far more common that these startups "succeed" by distorting a functioning market with external capital and destroying sustainable businesses operating in the sector through price dumping. Once they've captured enough of the market they'll IPO and either collapse entirely when their business model proves to be entirely unsustainable without infinite VC funds or limp along providing inferior service and labour conditions to those available beforehand. Either way harm is caused. The model is fundamentally incompatible with the concept of fair and healthy competition and ultimately makes success a function of who has the most money to burn.
- ryandrake 4y agoIt's helpful to think of the USA as a gigantic factory that produces billionaires. The manufacturing process runs off of energy ("money") provided by banks, investors and government, and the raw materials that get consumed and discarded are the lives and livelihoods of workers, and the end product that pops off the assembly line is "wealthy people".
- atemerev 4y agoThat’s what they told us in a Soviet primary school back in USSR. The alternative wasn’t compelling enough.
- Jochim 4y agoThe options aren't limited to authoritarian dictatorship and capitalist oligopoly. In the same vein it isn't communist to suggest that billionaires should maybe remain slightly smaller billionaires in order to provide workers a decent quality of life. Until fairly recently you could support a household on one income in most western countries. We're now seeing people struggling on two after decades of tax cuts and historically low tax burdens on the extremely wealthy.
- lostlogin 4y agoIt’s interesting how your points could be right yet you will have disagreement over whether it’s a problem. Growth at any cost is utterly toxic in my view. You describe lower European salaries, yet minimum wage in the US is outrageously low. What the US seems to have created us a system for creating wealth inequality.
- atemerev 4y ago“Minimum wage” is fiction. There are many countries (including European countries) that do not have minimum wage. It doesn’t have any base in reality, and people should not accept such ridiculous salaries. That’s what unions and labor negotiations are for.
- lostlogin 4y agoThose receiving such wages seem unlikely to be in a position to negotiate a lot better. Regulation is a dirty word to many, but it’s a solution I support for minimum wage.