The harder it is to fire someone, the more reluctant companies will be to hire people, and the more choosy they'll be.
The numbers given the essay suggest that Sweden's employment rate is not unusually low, so is your comment really a meaningful basis for making a policy decision?
When it's easy to fire people, it's also easy to fire people for personally motivated reasons, rather than reasons which are good for the company.
For example, the boss might want to fire someone to bring in a family member. Nepotism isn't illegal. But the union contract helps prevent these sorts of (non-business related) firings.
People tend to work better when they aren't worried about being fired for reasons that have little or nothing to do with their job.
Let me rephrase - less willing to give someone a chance who may not have done well in the job interview.
> employment rate is not unusually low
Wouldn't that also suggest that finding another job won't be difficult?
> fire people for personally motivated reasons
Why would you want to work for someone that dislikes you and doesn't want you around?
> People tend to work better when they aren't worried about being fired
A workplace where people hate each other doesn't sound like a happy place, either.
Based on the information given, it doesn't seem like it is. Perhaps there are other mechanisms in place (like this job-security council) which compensate?
How would you expect the Swedish job market to look if employees didn't have these protections?
You ask: "Why would you want to work for someone that dislikes you and doesn't want you around?"
Here's an example from the blog of a small-town teacher I read. If you are a teacher, and coach Little League baseball, and the principal puts pressure on you to place the county education board member's grandson on the team (say it's from pressure from the board member), then who's going to back you if you refuse, and end up on the principal's bad side?
Or are you going to quit your job, uproot your family, and move away? Because it's likely not easy to find another teaching job in the same small town.
To put it another way, why is it that if 1 person dislikes you out of the 40 or 50 people you work with, and that person happens to be the principal, then you have to leave? Why does he deserve that much power over you?
I've been an employee, and an employer. As an employee, one feels that the employer is holding the power, being an employer, one feels the employee has the power. After all, the employee can quit at a moment's notice and go work for someone else. Good employees are hard to find.
In a private institution the person paying you money to do stuff for him deserves the power to stop paying you money because it's his money. It's also the employee's ability to make contracts that you're talking about -- you'd hinder an employee's ability to agree to a contract with a lower risk of employing them.
I happen to find it convenient to be able to agree that if somebody doesn't like my output they can stop paying me. It's part of how I get them to start paying me in the first place. You would take this freedom to make contracts away from me. Presumably because you think you know better, and by taking away my freedom, you enhance my negotiating position.
Why do you deserve that much power over me?
"In a private institution the person paying you money to do stuff for him deserves the power to stop paying you money because it's his money"
Yes, I believe one of the "other mechanisms in place" in Sweden compared to the US is that Swedish workplaces are more structured around consensus and democracy, while US workplaces are more hierarchical and control-based - a sort of mini-monarchy.
"I happen to find it convenient to be able to agree that if somebody doesn't like my output they can stop paying me."
I believe Swedish companies can fire people who are unable to do their job. The question is, do you find it convenient that you can be fired for reasons which have nothing to do with your job? The Little League example is one. How do you feel about not being paid because your boss wants to hire a poorly qualified relative instead? Or not being paid because you refuse to work on weekends?
"You would take this freedom to make contracts away from me. Presumably because you think you know better, and by taking away my freedom, you enhance my negotiating position."
I did not understand this argument. What essential freedoms are taken away from private Swedish companies or from employees in Swedish companies? How has this had detrimental effects on the Swedish economy or lifestyle?
We can't separate this from being fireable for being bad at your job, or for making others hate going into work because you're insufferable or a sexual harasser or just undesirable to work with.
> How do you feel about not being paid because your boss wants to hire a poorly qualified relative instead?
Perfectly fine. It's his money. If he wants to spend it unwisely, he's welcome to. And I'm not "not being paid." I'm "working for somebody else."
> Or not being paid because you refuse to work on weekends?
That's not the matter under discussion. You can already sue over not getting paid, or you can work somewhere else if they want the deal changed.
> What essential freedoms are taken away from private Swedish companies or from employees in Swedish companies?
The freedom to agree, "You'll pay me money to work for you and either of us can terminate this agreement at any time."
The ability to freely partake in economic activity is essential.
> How has this had detrimental effects on the Swedish economy or lifestyle?
See the inability of immigrants to integrate into the Swedish economy and Swedish society.
After all, these laws also limit your freedoms in the sorts of economic activities that can be done at work. If that's the case, then I consider your views too idealistic and unsuitable.
And I've read the EEOC guidelines. There are many precedents which show that being a sexual harasser is separable from being "just undesirable to work with". There's no bright and clear line, but if that's what you require than you demand the impossible.
You also don't seem to understand why some people would rather be an employee, and not simply be a contractor. Many people want a longer-term, more stable position, the ability to influence work conditions, get respect, etc. and as jernfrost pointed out at https://news.ycombinator.com/item?id=15578545 lack of these factors will cause resentment and disloyalty, and people will "tend to give less shit about their company because they know the company is never there to have their back".
In order to judge "the inability of immigrants to integrate into the Swedish economy", what factors do you use to compare it to the US? Because I seem to recall a lot of integration problems in our own history. And hasn't Sweden taken in a lot more refugees recently than the US has? I heard many US politicians who didn't even want to try to integrate Syrian refugee orphans. I think that has to count in the negative column.
I don't think it is without reason that when American companies fire people, they are not allowed to be around and get all their stuff in a box to not sabotage the company. Such practice is evidence of very weak mutual respect, trust and loyalty.
Ultimately that is a bad way of running an economy. You incur very high transaction costs in business when trust levels are low. I've seen this myself when American companies have been involved in buying Norwegian companies. American companies are completely overdoing it when it comes do due diligence, writing contracts and involving lawyers. This represents a huge unnecessary cost.
This experience is not unknown to others as well. You can read about Japanese experience with American work life. They are also used to a model with high degrees of loyalty. I read about a Japanese company trying to run the Japanese way in the US. They hired people for modest salary because they used lots of money on training to get very skilled employees. The problem was that this model was impossible in the US, because as soon as employees got the skills they switched to a higher paid company, which offered no training. The Japanese company did not understand how to build skills in the US. And rightly so. That is a big problem in the US. A huge part of the population have very low skilled jobs because it is very hard to raise the skill level of employees in the US, when you don't have a high chance of retaining those workers.
Of course there are pros and cons to both approaches. Norwegian and Japanese companies are more likely to keep unproductive workers as you say. But seen from a holistic view, for society as a whole that must be a better approach than producing lots of homeless people, or people living off welfare.
Unfortunately, all it takes is one bad actor to ruin it for everyone, and the company then goes "have security escort him out" from then on.
> But seen from a holistic view, for society as a whole that must be a better approach than producing lots of homeless people, or people living off welfare.
Easier firing of less productive people leading to homelessness / welfare would require it to be impossible to get another job. That seems a stretch.
If the company accumulates enough unproductive people, it goes out of business and everyone gets dumped on the street.
How is it that Norwegian companies haven't yet had one bad actor?
"If the company accumulates enough unproductive people"
Norwegian companies can fire unproductive people. Just because it's easier to fire people in the US doesn't mean it's impossible to fire people in Scandinavia.
He told me a story about "more choosy" from another viewpoint.
His department got a new department head, who previously had been working in a US branch of the company. He wanted to increase the department head count, so they started the hiring process.
One of the candidates came through. The employees almost all thought the candidate was unqualified. The department head disagreed, and wanted to hire the employee anyway. The union intervened, and the candidate was not hired.
As you say, "A workplace where people hate each other doesn't sound like a happy place, either." Why should the boss get to choose who you are going to work with?
Maybe this is why the "share economy" is so popular lately.
The report doesn't lead me to that conclusion.
Of course, there's always going to be friction in changing staff. But increasing the friction should be approached with caution.
I'm pretty sure that Swedish companies employ contractors for this situation, just like US companies do. And as the article point out, Swedish companies can have massive layoffs if need.
I really feel like the negative effects you are thinking of are not, on their own, significant enough to use your model to guide policy decisions. Perhaps the Swedes have given it sufficient caution?
By the way, one example I found of short-term contract work in Sweden is as a temporary replacement for when an employee takes a year off for paternity leave.
There never is a "free lunch" in these sorts of things. The cost gets paid one way or another.
How much lower? 0.5% or 50%?
How much of a paycut are willing to accept in exchange for longer-term stability? (Are there jobs in the US with two employment options; one with job protections and the other without?)
How does it compare to other factors which affect salary? As has come up on HN before, salary in Sweden and Norway are public information. This is meant to reduce information inequality during salary negotiations. (Eg, it would have been more difficult for Goodyear to have systematically underpaid Lilly Ledbetter had she known her market worth.)
Obviously there are other differences as well, like the effect of employment-based insurance vs. national insurance.
I've been an employer. I know for a fact that I'd think twice, three times about hiring somebody if I knew it would be hard to get rid of them if they don't work out. (Such as a requirement to document the poor performance would be - that can take months.) I also know I'd make a lower offer. You would, too, if it was your money paying their salary.
I know that I am not alone in thinking this.
You have pointed out one factor. Others, including jernfrost's account of Norwegian conditions, have pointed out that there are many factors. I've specifically argued that your observation is not significant enough to set policy decision. Now you agree that there are many factors, so do you agree that one point that you bring up might not be a useful one?
You give your experience in the US workforce, but your original observation concerned how you thought it would affect the Swedish workforce, with the implication that it was a significant universal principle.
(Speaking from experience from tech industry in Oslo, before I moved on)
Also why depending a lot on more on easier to let go contractors are prevalent all over Scandinavia.
That's true in theory, and I agree that it is a factor, but there also are many other factors involved in hiring/firing decisions.
Also, it's not much benefit to a worker to be hired and fired with regularity because it's easy; people are not commodities, to be traded, moved or bought & sold like dollars or widgets. Finally, workers need to be able to protect themselves from unscrupulous employers. So the question is, how do we find a balance?
As far as public interest goes, I'm not interested in making corporate executives' jobs easier or in making corporations more profitable; I'm interested in people having good jobs and being productive. Corporate profit, job market liquidity, etc., aren't bad, and profitable corporations are necessary for good and productive jobs, but they are a means and not an end.