Surprisingly, severance is also mandatory in Argentina and many other "under development" countries.
I'm absolutely amazed at how people in the US are so against severance being mandatory.
I'm absolutely amazed at how people in the US are so against severance being mandatory.
1 - If you make it too hard to let people go, companies will be less willing to hire. (You’ve added a cost to the employee)
2 - If you make the cost of severance too high, it will kill companies that might otherwise have a chance to squeak through.
There are plenty of good arguments on the other side (companies offloading social costs to the govt, etc) but these two are consistent with economic theory on labor supply and demand.
So have you run a business where you had to hire employees?
This creates a never-ending hamster-wheel of hiring-firing - not good for the employee and not good for the company.
Also, if paying 1 month of severance is too much for a company, then perhaps it is not run well and should be allowed to fail?
It's also important that people can get unemployment benefits for at least 6 months after losing their job. I'm not sure how that works in the US. I'm guessing it changes per state like everything else in the US.
It's just vastly better organized in a way that (largely) protects consumers from capitalism where it doesn't belong.
Making employers responsible for severance pay is a way of aligning costs with information asymmetry, and also trying to make employers at least a little sensitive to the impact their whims can have on real people's lives.
It’s interesting though, how would you go about establishing a proof?
I always enjoy Hans Rosling going through the stats, if you’ve time it’s well worth it https://youtu.be/FACK2knC08E
Hint: they do.
The argument that the regulatory burden on small businesses can be bad for economic growth does have some real validity - the great work on this is Hernando De Soto's The Other Path on Peru. However, that's an argument for making the tradeoff in an informed way and exempting small businesses (something the EU is extremely bad at!), while being against severance pay in its entirety is just a profit-before-humans talking point.
So all employees effectively pay for layoffs, which goes against you if you're not the one that gets laid off.
(I am very much in favor of mandatory severance and generally other kinds of safety nets.)
Or you could say that the company needs to save the profit generated by your position until it equals your anticipated severance before paying dividends from that profit. So it’s still a drag on profits, but it has nothing to do with other employees.
Sounds like a very acceptable compromise. I'm happy to chip in. I'm also happy that I pay taxes for universal healthcare so that I can take advantage of that when I'm in a disadvantaged position, but that's me.
When you're employing people you're not already thinking about their future exit. You hire based on your growth, so you're usually optimistic about the future and thinking about employees being long term. If not you hire contractors, who you can lay off easily.
Part of this is that you can't just fire people without good cause and without following a process. There are probationary periods to allow the hire to be let go if they don't work out in the first 6 months or so, but after that you're into a long "managing them out of the business" process that may or may not end up with a pay off.
+1 for the contractors thing. If there is already an expiration date for these people, then make them a contractor or reach out to a staffing firm.
I'm sure you already know, but in the UK you can be fired for any non-protected reason within the first 2 years of employment. I think UK companies are typically less cavalier than their US counterparts when it comes to firing, but in the frist 2 years, the employee protections are similar to US at-will states.
“I like free money” is hardly a good argument to support statements like “it just makes sense”.
That's not an argument also, Germany is actually doing very well for everyone ( civilians, business, healthcare, innovation, ...)
They are almost launching their contact-tracing app, while the poor, that need it, in the US get 1200$ in the next 3-6 months, lol.
The rich get 1.700.000 $ though, that's "normal". Good job! /s
Perhaps you were talking about the federal state saying that states have to look for their own medical supplies? That's nice
Employment is a transaction, like any other. Doing some business yesterday is no guarantee of business tomorrow.
You'll forgive us for not being convinced by your argument.
Except that you can't later withdraw your consent. You said that was "a violation of consent".
Which is it?
Employment contracts in the US (if they exist at all and aren’t simply an implicit agreement, so-called “at will” in most states) don’t generally provide for severance. Almost every one I’ve ever read allows for either party to opt out at any time without penalty, or explicitly states what the remaining liabilities would be in the instance that one of the parties did end the transaction.
If you don’t have a written, signed contract, you cannot assume future consent to perpetuating or extending a transaction. There wasn’t any explicit future-consent.
The existence of a written, signed contract changes that.
I'm sorry but there's plenty of both liabilities and obligations in the event of early termination. Have a look at your telco contract if you don't believe me
This is just a bad-faith attempt at using the language for sexual and interpersonal consent to pretend that businesses and workers are on an equal footing and have no obligations to their staff.