Stories like this make like the employee protection I enjoy even more.
The downside of employee protections is that it makes companies more reluctant to hire. And also once hired, the salary to be offered is reduced to cover the estimated current value of the future employee protections. These are real downsides, particularly for young people who are trying to get a foot into the corporate ladder.
I have even personally witnessed a situation where a company evaluated a legal change to increase employee protections, and decided to layoff almost everyone in a particular country before the new law took effect. (The company was Pictage, the country was Argentina, and this was a bit over a dozen years ago.)
So I'll take the up front downsides of at will over the hidden downsides of employee protections.
Employee protection exists because there's a huge power imbalance. A company who can constantly just say, "we'll fire you if this doesn't get done" and colludes with other companies on such matters makes it very difficult for workers. This is why employee protection, unions, etc... exist.
Nothing comes for free.
I wouldn't, but being in a country with employee protections means the people around me are almost never placed in a desparate situation, and I am meaningfully safer because of that.
People should save for a rainy day, anyway. Why must the employer be their parents?
I don't buy the idea that people in a free country like the US somehow found the one and only job they could ever have.
It's inevitable.
And when people get desperate some turn to crime. Which then increases your costs through increased taxation for policing and incarceration and secondary effects such as reduced safety and increased personal costs due to crime, such as increased insurance costs and the greater threat of being targeted.
So when all costs are internalized, worker protections pay dividends at making a society better for all involved, for example the many northers European countries with very low crime and very strong worker protections.
"Extreme"? What nonsense. I know many middle class people who don't have a spare $400 for an emergency. They also have a boat in the driveway. They don't have an income problem, they have a spending problem.
> And when people get desperate some turn to crime.
Or sell the boat. I remember one couple I counselled that couldn't pay the rent, but had a new car. I suggested they sell that, and buy one they could afford. I was surprised to find out that's just what they did.
It's not a poverty problem, it's a financial management problem. Don't conflate that with being actually poor.
> when people get desperate some turn to crime.
Crime causes poverty, not the other way around.
The downside to treating employees like children is a lower standard of living.
As to finding another job: of course they will, but switching costs are pretty high for job changes.
This kind of directly speaks to the commenters point. There may have “little good”, but enough reason until the legal change to increase employee protections created “no good reason”.
People use the same argument to justify removing minimum working age laws, weekend laws, OSHA laws, EPA protections, retirement, healthcare etc.
In a pure unregulated market, employers would be able to offer employees much higher salaries!
The reality is somewhere in the middle. Though what America thinks is reasonable is very different than what the rest of the developed world thinks is.
Maybe not, but the world isn't zero-sum. Some things really do raise or lower the overall average.
> I have even personally witnessed a situation where a company evaluated a legal change to increase employee protections, and decided to layoff almost everyone in a particular country before the new law took effect. (The company was Pictage, the country was Argentina, and this was a bit over a dozen years ago.)
What was the law change? And how long would it have been before those employees were laid off otherwise? That's an interesting datapoint to hear about, but "employee protections" can mean many different things.
> So I'll take the up front downsides of at will over the hidden downsides of employee protections.
Unfortunately you don't get to skip out on the hidden downsides of at will either.
The 2008 financial crisis had left the company in a position where it needed to downsize anyways, and the board of directors gave the CEO the choice between covering that liability by making the US layoff bigger, or avoiding the extra liability by getting rid of basically the whole Argentinian operation. The CEO chose to preserve US jobs.
The Argentinian operation would have seen a layoff either way. But nowhere near as dramatic as the one that actually happened.
At-will is a huge risk for the individual, since they're going from roughly 100 % employment to 0 % employment.
On the other hand, in a decently sized organisation (where employee protection is typically enforced), being stuck with a bad employee and asking them for meaningless work that bothers nobody else means paying for 100 % capacity and only getting, say, 94 % of it. Over a large number of employees, the organisation can be fairly confident of what this percentage will be. Much smaller risk.
In other words, the utility cost for the employer of employee protection is smaller than the utility cost of at-will for the individual.
(Homeowner's insurance is a similar type of situation. Makes no sense to the individual if you look at the dollar costs, but in terms of utiles it does actually work out for both parties in most cases. Another case is hedging major business expenses -- costs more, but you and the counterparty both lose fewer utiles from it.)
Yep, that why software engineers in California and New York, where there are a lot of employee protections, don't get paid as much as SWEs in the Midwest or the South, where there are less... Right?
Or maybe the real economy is more complex than the kiddie models you were taught in Econ 101?
Innovation hubs move. Historically, this has always been true. Right now those are SV and NY.
It won't remain so.
Innovation hubs have been in China, Middle East, Venice, London, etc.
The printing innovation lasted around 300 years. Steam engine another 150 years. The industrial revolution less than 100.
How long do you think computers will dominate major innovation? And if it does, will the innovation hub stay in SV ?
What happens if biotech takes over? MRNA tech ? Driverless cars ? VTOL ? Rocketry or Space Tourism ? ML or low-code apps changing the dev of software as we know it today ?
Do you see any of those hubs in SV ? Are they in SV today ?
Regardless: yes, all of these things are in SV today. If any of them proves to revolutionize society in our lifetime I think you'll find SV will retain its status.
My only note it is that isn’t 40 years. For SV it’s more like 60 years (going back to the founding of Fairchild) or even longer if you want to go back as far as HP and other radio shops.
For NYC, it’s even longer. IBM has had a major NYC presence since at least the 30s (and obviously its main HQ is less than 40 miles from midtown)! Bell Labs/AT&T was based in Manhattan before moving to New Jersey and obviously is still in the NYC are. And that goes back to the 20s I think.
Not to mention other NYC and NYC adjacent companies like GE. So we’re going back 100 years or more for NYC and 80 for SV.
Xerox’s history combines both areas.
And as you said, Texas has a strong history too with the Motorola stuff and Silicon Prairie.
Historically speaking, Seattle is a relatively new entrant in computing and innovation, only really being a hub for 40 years or so (unless you count Boeing and then it back over 100 years), but is the home of two of the biggest companies of the last 50 years, Microsoft and Amazon.
Dozens and dozens of cities all over the world have tried to be the Silicon Valley of X and none have succeeded. And New York is extremely unique as a global center in dozens of different industries from finance to media to fashion to the arts.
Obviously things could be disrupted. But both of these areas have been innovation hubs for over 100 years, which given the short history of this country, is remarkable.
Both are at will states. So easy to hire, easy to fire.
When California says you can fire an employee for any reason, what they really mean is any reason except for a bunch of reasons we've decided are unacceptable.
You can still see this in many developing countries, children on assembly lines in China, or how a clothing factory in Bangladesh caved in killing most women working there.
TANSTAAFL is obviously and demonstrably false - child labour leaves them without education and traps them in poverty. Their creativity and future potential is lost to society. Employees without hands are an obvious loss to society. But the employer doesn't care, he saved a few bucks on safety. He isn't paying the cost. This argument further extends to education and beyond.
The argument of TANSTAAFL was used by coal companies in the 1920's. At the time they used to hire assassins to murder Union leaders and even killed the local sheriff. https://www.youtube.com/watch?v=vg9xywAxb10
This also sometimes happens in developing nations today, sometimes at the behest of western companies.
This is a fallacy. Companies will pay employees as little as possible. Why would they pay you more just because employee protections were removed?
And vice versa… if multiple companies want that resource.. they all have 20% more to bid with
If your colleagues gets fired for some bs reason you and your other colleagues can stand for each other by striking.
That's because unions are an integral part of the way many of the countries socio-political systems work. In Norway, for instance, the trades unions and the employers get together once a year to hammer out what is called tarriflønn, essentially the going rate for each broad type of job. The state provides a referee for the meetings whose job is to keep them on track and to encourage both sides to compromise. Unions and companies work together rather than fight each other, most of the time.
But this can only work if there is a broad consensus that we are all in the same boat and that we will all be better off if we work together.
The attitude, that appears to be common, in the US that employers are always exploitative, employees are always lazy and thieving, that the government is just a parasite, and that the aphorism "Good enough for government work" is a synonym for delivering shoddy work means that no one trusts anyone so you end up fighting all the time.
On a side note, what happens to health insurance for employees who're let go? Does it end the time of your last day or midnight? I was too afraid to Google it as I likely knew it's be pretty cut throat, but have always stressed about it regardless.
Fire for cause means "you aren't doing your job properly."
Redundancy means "your job is no longer required."
If twitter restructures to save money, the jobs that no longer exist have been made redundant.
Maybe I misunderstood the point you were trying to make?
In US usage, the general term here is “layoff”. And severance is not a legal requirement, and practices vary considerably by industry and, within industries, by individual firm. Layoff is eligible for unemployment, while firing may or may not be. (The line is also looser because the US has at-will employment, so there are very little general rules–other than those in particular employment contracts of unionized or high-status employees–around termination other than for prohibited purposes, or–mostly around warning periods–mass terminations, but there are conditions for unemployment assistance.)