> Under European labor laws, permanent workers are usually more difficult to lay off and require more costly benefit packages, making temporary contracts appealing for all manner of industries, from low-wage warehouse workers to professional white-collar jobs.
Make it extremely costly for an employer to exit a permanent contract and employers are less willing to enter those contracts. Shouldn't be terribly surprising.
As a result, many (most?) well-meaning market restrictions end up hurting more than they help, often in indirect and difficult to quantify ways spread out over thousands of different interactions. This (friction introduced by the inability to fire people who should be fired) is actually one of the easier examples to point to.
Get a bonus for most bugs fixed? Lots of bugs produced, logged and fixed.
Get a bonus for bug free code? Very little code produced.
I do think for economics a more detailed simulation is needed in which we can try different laws before they passed.
If you program a simulation with the same type of thinking used to draft the law, assuming that people will employ and comply with the law "as intended", you're liable to fall prey to an exploit that you weren't creative enough to think about, else you'd have (possibly) addressed it in the law.
The fundamental problem is that employment law tries to treat the employer as a nasty exploiter, not as a provider of something good to those to whom it pays salary. The law often starts from confrontation and zero-sum game, not from having shared goals and interests.
So you wind up getting laws designed so that employers need to be fair when firing, allowing folks time off after pregnancy (including men), allowing folks to stay home when they are sick, and making sure folks can try to correct their ways before getting fired.
And contrary to your belief, enforcement of laws seems to happen here (norway). Temp agencies seem to be much more used than they were in the US.. and weirdly less predatory to the worker. It still sucks only having a temp job, but that's how a lot of folks get started working here.
There aren't remedies for these folks in the states Now. If all people had that power, they'd be more likely to use it. Unfortunately, you have to have a bit of privilege to pull it off when there aren't laws to protect you (and sometimes when there are).
And while I realize that this is controversial, but in order for this to work 2 other conditions are necessary:
1) limit immigration
2) throw the book at any employer caught employing illegal immigrants (because they're not doing it to help the illegal immigrants)
Sans the (many) inefficiencies, the government is basically an expression of the collective will.
However, treating all employers as nasty exploiters then means that more of them will have to act such. A better recourse would be to ensure the labour market works, so that the nasty exploiters lose employees and have to start behave themselves.
> The fundamental problem is that employment law tries to treat the employer as a nasty exploiter
Because they are, almost inevitably, if left unchecked.
Is slightly more convenience for the rich (if you use uber and deliveroo, that means you) worth allowing exploitation of the poor ? If so, how much ?
Do only "the rich" use taxicabs? Uber is generally cheaper than a cab, so if middle class uses cabs (and overwhelmingly has smart phones), why wouldn't they also use Uber?
Also, poor people generally would rather be "exploited" and employed than on the dole.
As for flexibility of hours on interim contracts, it's nonexistent, because employers don't want to give that. They'll hire whoever just complies with their hours and usually not even allow for swaps.
I've even been on the other side of this. Allowing hour swaps leads to first the impression of preferential treatment, then actual preferential treatment (because "he's doing it"), then fights, then a total disaster.
Thus I would go with something like make it extremely easy for the employer to get employees without any kind of obligation and the employer will be less willing to choose any type of contract that respects the employee. As we so often hear, the responsibility of the CEO is to the shareholders (thus not to the employees).
The order in which or degree to which the CEO considers each constituency when making decisions might vary by the decision, but I generally favor them in the order listed above (even as I am an employee). If you don't serve your customers well, nothing else matters...
As for the law being worked arond, that was bound to happen; I think anytime you unduly restrict one side, that side will seek loopholes or exploits or withdraw from engaging. In this case, hiring temporary workers, engaging other companies under contract, automating the function (entirely or partially), moving that function to another geography, or doing without happens.
I'm in the process of opening another software development location in Europe. In studying where to locate, it was surprising to me how varied labor law was across various locales, and while any such decision is obviously multi-dimensional, labor law was a significant driver in the final location selected. (Several finalist locations were all workable; one of the locations had a much more balanced set of labor laws and local practices.) To inhabitants and prospective employees in the locations not selected, that looks identical to jobs moving away from their locale to another, more balanced, locale in large part due to local labor law.