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Bottom-lining it: Business owners and managers want to enjoy the benefits of a developed economy with a humane social safety net and strong worker protections (

• planetguy 14y ago
  No, the bottom line is that people respond to incentives, and that politicians are too blind to notice even the most obvious of perverse incentives in whatever schemes they happen to dream up.
  • briandon 14y ago
    How about this for an incentive: Want your children to grow up in a developed country with a social safety net so that they won't trip over toothless senior citizens scavenging for recyclables in garbage bins to sell for spare change to pay for a place to sleep for the night? Great, then be a responsible entrepreneur and don't try to slither through every crack in every law designed to keep the society that your kids will grow up in healthy.
    • planetguy 14y ago
      That's not how incentives work.
    • hgsj700 14y ago
      The economic illiteracy on HN is a little baffling. The incentive to live in your utopia is apparently not sufficient enough for those entrepreneurs who are probably much more concerned about breaking even.
      • briandon 14y ago
        People running multiple 49-worker companies and opening satellite factories up in developing countries to avoid sharing profits with their workforce(s), having once-a-week meetings, and the like are struggling to break even? If you would like to see the terminal state of a laissez-faire society, you can visit Hong Kong. More luxury cars on the road than anywhere else you'll ever see and plenty of the toothless, recyclables-scavenging senior citizens that I referenced earlier as well. Hundreds of thousands of people living in literal wire mesh cages because that's all that they can afford. A wealth gap that yawns like a chasm. It's easy to advocate policies when you think that you'll never have to actually submit yourself to living in the society that those policies will ultimately create.
        • wlievens 14y ago
          I think the argument here is not that it's a bad idea to create a safety net state. The argument is that as long as no law is broken, there is no such thing as "exploiting a loophole". Politicians should just learn to design better laws with less loopholes.
          • dmix 14y ago
            The choice: 1) pay a couple lawyers $300k to minimize taxes 2) pay the government $1 million Both are legal. Choose one.
            • wlievens 14y ago
              If the laws are drawn up well, then option (1) is in no sense unethical.
          • briandon 14y ago
            A: So you have three 49-person companies ... That's odd. B: I employ no more than 49 people in each of my companies and start new companies as necessary to avoid sharing profits with my employees, having to deal with worker councils, and the like. Playing corporate twister to evade the clear intent of laws sure seems like loophole exploitation to me. In addition to working around the intent of laws that empower workers, organized groups of business owners are constantly trying to overturn those laws and, in the meantime, discourage enforcement.
      • dsrguru 14y ago
        You're making it sound like every decision people make is a financial one. That's factually untrue. Most people make decisions on the combined basis of self-interest and their personal views on morality. There are plenty of things people could do to ruin the lives of other people that aren't technically illegal, and ruining other people's lives can have financial gain, especially if those other people are business competitors. Yet we don't do those things. Why? Because self-interest isn't the sole driving force behind human behavior. It's one component. So while I happen to agree in this specific case that taking advantage of these kinds of legal loopholes for personal gain is to be expected and that the incentives need to be changed, it seems ridiculous to call people economically illiterate for understanding that behavior is not determined solely by self-interest.
    • CWuestefeld 14y ago
      slither through every crack in every law How are we supposed to ascertain the difference between a loophole that we should pretend not to notice, versus an engineered incentive, where the regulators are intentionally giving us a nudge to behave in that way?
      • briandon 14y ago
        How are we supposed to ascertain the difference between a loophole that we should pretend not to notice, versus an engineered incentive, where the regulators are intentionally giving us a nudge to behave in that way? Use empathy. (1.) Imagine that you are one of the people who are going to be affected by your decision. Better yet, imagine that your parent/spouse/child is the one going to be impacted. (2.) Next, assume that the law was crafted with the best interests of society at heart or, if it's a flawed law, try to reason out the intent assuming that the author was someone with empathy. (3.) Try to cause the greatest good or at least minimize the harm of the action that you're about to take.
        • gaius 14y ago
          I'm imagining the massive problem of youth unemployment in France because employers aren't willing to take the risk of a bad hire. How's that for empathy?
          • briandon 14y ago
            Think critically for a moment about how it came to be that you were able to parrot the talking point about the percentage of unemployed youth in France but are seemingly unaware that employers are free to fire new workers during multi-month trial/probation periods or why the living standard of the one-fifth of French youth who are unemployed at any given moment is higher than that enjoyed by fully-employed people in the same age group in developed countries where employees have far weaker protections. It's sad that it's so easy for the proverbial one percenters to get everyone else, who should know better, on board with their agenda. Rather than copy and paste, I refer you to: http://news.ycombinator.com/item?id=3953883 http://news.ycombinator.com/item?id=3953883
  • glanch 14y ago
    How do you give business owners an incentive to pay more to the government than they already do?
• learc83 14y ago
  There are better ways to establish a social safety net than forcing companies to employ workers they don't want or need. Look at the results of the law--not the intentions. The article says France has 2.4 times as many companies with 49 employees than with 50. This labor code is preventing companies from expanding, and encouraging companies to create new jobs in other countries rather than in France. The effect it is having is to protect existing jobs at the expense of new ones, and is an overall net drain on the economy. If they, as a society, have decided they want a social safety net, why not work on something like a guaranteed minimum income or a negative income tax system instead? Give them the money directly so the costs are transparent instead of this roundabout regulatory nonsense.
  • briandon 14y ago
    No, the labor code is not preventing companies from expanding. The greed of the company owners/directors/management is preventing them from expanding. They don't want to share profits with their employees or have to rub shoulders with them and pretend for even a few minutes once a week that they are equal. The can't-shed-employees meat of the article is: Software maker Viveo Group, an arm of Geneva-based Temenos Group, began the required talks with the workers’ council in February 2010 because it wanted to cut about a third of its 180-member staff, according to court records. Viveo offered employees a voluntary departure plan in June of that year as the council dragged its feet on evaluating the earlier proposal, court records show. The workers’ council then went to court to block the cuts. It won a ruling against the original plan in January 2011 on the grounds that Viveo was forecasting an 18 percent increase in sales, meaning its future didn’t depend on the layoffs. France’s highest appeals court is reviewing the decision and is expected to rule on May 3. “What holds back hiring in France is the lack of clarity on how to legally cut jobs,” says Déborah David, a labor lawyer at Jeantet Associés in Paris who has followed the case. If the decision is upheld, Viveo will have to take back the workers and hand over two and a half years in back pay, she says. You have a company that shed a third of its workers. A workers' council fought for and managed to win a more favorable layoffs scheme for them than the employer would have liked but they were still layoffs. ["voluntary departure plan" is a terribly Orwellian name for a layoffs scheme] The company seems to have justified the layoffs as a matter of economic survival rather than claiming that a third of the workers that had been carefully screened, interviewed, and hired were actually no-good bums. It turns out that sales are now up 18%. If they were great, skilled employees regretfully laid off out of economic necessity then why not hire them back now that business has taken a turn for the better? The answer would seem to be that the company was not honest about their reasons for the layoffs. Either they used an excuse to rid themselves of undesirables and low-performers or they used the economy as an excuse to fire otherwise fine workers.
• tomp 14y ago
  You can have the cake and eat it too: just make the government responsible for social safety net. It's separation of concerns at the most basic level - let the companies worry about the economy/profit, and the government worry about the society/people. AFAIK, that's how they do it in Denmark. It's very easy to fire people (and therefore easy to hire them), but the taxes are very high, so the government has enough money to provide social security for the ones who have lost their jobs.
  • scarmig 14y ago
    True. But the USA, believe it or not, is probably much closer to French politics and culture than it is to Scandinavian. (We have a similar tendency to do things to hide as many costs as much as possible, for instance.) So as far as you can do inter-country comparisons, USA-France is likely to be the more productive one.
    • dmix 14y ago
      > We have a similar tendency to do things to hide as many costs as much as possible, for instance. Are you saying that companies finding legal ways around an tax system is a cultural thing and not a product of a system? For example, the actors being companies with a predictable self interest playing within an incredibly complex tax system that is easily gamed if you can afford lawyers and accountants.
• jdietrich 14y ago
  Youth unemployment in France is 20%. Their labour laws don't create a safety net, they just privilege workers over jobseekers.
  • briandon 14y ago
    Eighty percent of youths are employed. Of the one fifth who are not, it's likely that many of them are able to rely upon their parents or older, employed siblings for support while they themselves are seeking employment. Weaken employee protections and social responsibility provisions and large numbers of the older, higher-paid workers will likely be replaced by lower-paid younger workers. Neither the still-employed non-youths nor the newly-employed youths nor the eighty percent of youths who had jobs will have any job security anymore. That doesn't sound like a societal win at all. The people pushing the youth unemployment figure don't actually care about youth unemployment. The point is to beat everyone over the head with that figure to get them to agree to stripping everyone's worker protections away.
• mhartl 14y ago
  Consider a limiting case. Upon hiring employee 50, you have to sell your company and donate the proceeds to charity. I hope that sounds crazy, but in case it seems warm and fuzzy bear in mind that all 50 employees are now out of work. Are you a greedy bastard for wanting to stay at 49? Now relax the assumption. At employee 50, you have to start complying with a bunch of onerous and expensive regulations. This limits your ability to make profits and to continue growing your business—which, among other things, means being able to hire fewer workers and having to pay them less. The magnitude of the effect is less than that of the forced-charity sale, but the sign is the same. These kinds of laws are based on a fallacy: they assume that the interests of companies and employees are not well-aligned. What is worse, such laws guarantee misalignment—thus exacerbating the very problem they're (ostensibly) meant to ameliorate. In medicine, this is called iatrogenesis. Did the bloodletting not work? That must mean we need more bloodletting! These laws also create a decoy, which has effectively distracted you from the real enemy. The object of your ire should be boneheaded labor laws, not the "greedy" corporations trying to evade their restrictions. It's a diabolically clever political strategy, and it ensnares many a well-intentioned voter. But it's never too late to escape the trap.
  • briandon 14y ago
    You begin with a reductio ad ridiculum argument and segue into a spiel about employers' and employees' being aligned. I'm not sure whether your post earnestly reflects your position or was intended as a satire of the views of stereotypical Ayn-Rand-ites ("To the Gulch!"). Obviously, it's difficult to buy into the idea that employers' and employees' interests are aligned when business owners recoil in horror at the notion of having to meet once a week with the equivalent of shop stewards and bridle at having to explain why they need to lay off chunks of their workforce on short notice.