How Europe crushes innovation(economist.com) |
How Europe crushes innovation(economist.com) |
The business enterprise, in this hit piece, should not be simply another tool for improving the quality of life and helping create a society that's worth living in, but the sole purpose of the society itself.
The "cumbersome process for letting go workers comes with hidden costs" aren't really hidden, unlike the author, but transparent social protections ensuring fair treatment, preventing arbitrary dismissal, and stabilising demand. Something a decent society should fully embrace.
> the sheer difficulty of shedding staff en masse—a reality of corporate life—steers Europe’s biggest companies away from making risky bets in innovative fields
No, thank you. Europe's lag in high-tech sectors stems mainly from underinvestment, fragmented capital markets, and US monopoly power, not employment law. Labour rigidity has no strict correlation with innovation deficits (Germany, Scandinavia, France, Japan, and South Korea all had stronger labour protections than the US and managed to become rather innovative), but why bother with data when the point was simply to bash Europe for protecting its workers from predatory businesses? At best, the evidence is mixed and context-dependent (focusing on patents, for example, instead of genuine innovation)[0], and OECD and Eurostat long-term data show that some high-innovation countries have some of the strongest worker protections and unions.
> investments in disruptive breakthroughs [...] require the ability for big companies to hire lots of staff, then later fire most of them if the projects don’t pan out
Likewise, nonsensical economic justification for precarious work. For the most part, innovation depends on R&D funding, talent, and public infrastructure, not firing freedom (which businesses are guaranteed to abuse). Rather than treating humans as disposable risk capital, the author should take a look at US's own history and they will undoubtedly notice that a significant part of the innovation that it benefits from today was developed when the US had huge taxes, immense investments in R&D and public infrastructure. [1]
Strong social and environmental protections should be the bare minimum for any democratic society. Remove that, and no economic system, whether capitalist or not, is worth having.
[0] https://www.oecd.org/content/dam/oecd/en/publications/report...
[1] https://www.sciencedirect.com/science/article/pii/S259014512...
- EU: 1%
- US: 24%
- China: 35%
That is quite a favourable comparison for Europe, I'd say.
EDIT if anything, staring at these numbers, one might conclude the EU is not spending enough in general, in particular on innovation. Quite the stark contrast to being a money grab, IMO.
What the member states spend, and if they do it well etc. is a totally separate question.
Since you ask so nicely, it gives me pleasure to provide further details:
- This link discusses the 2025 EU budget: https://www.consilium.europa.eu/en/policies/eu-annual-budget... there are two numbers. It is unclear if the budget is the sum, or if one number includes the other. But let's add them for an annual budget of approx 250bn EUR
- EU GDP is around 20tn EUR according to this Wikipedia link: https://en.wikipedia.org/wiki/Economy_of_the_European_Union (the nominal number)
- using division I arrive at 1.25% https://en.wikipedia.org/wiki/Division_(mathematics)
For the US:
- This webpage: https://fiscaldata.treasury.gov/americas-finance-guide/feder... puts the federal spending at $6.66tn (hmm)
- Wikipedia again puts US GDP at around $30tn: https://en.wikipedia.org/wiki/Economy_of_the_United_States
- We arrive at federal budget spending of 22%
I'm not claiming these are the best or most up to date statistics, but this is a roughly 20x difference between US and Europe, and I understand the 2025 EU budget is particularly large.
The notion that EU bureaucracy is particularly expensive has no foundation in fact, AFAICT.
Might you share then how the EU is a money grab for Brussels Eurocrats? With at least the level of detail you got from me?
Because then the question arises: What if the current way of handling labor protection in the EU (as one of many components) leads to destroying yours and everyone elses standard of living, simply because it's unaffordable? Would you still argue that this is the way to go? Everyone going down with the ship together?
I don't know what will happen and what the root causes are (labor laws might not contribute much to the picture, I really don't know), but at least we should be somewhat cognizant of the fact, where the industries of the future are currently built and where they are not, and have a fantastic explanation of why this is not going to be a super big issue.
It's quite an assumption that it's unaffordable. In the last decades efficiency has been only increasing, but working hours per week aren't significantly going down nor are the salaries noticeably higher.
Where does all the extra efficiency go to? It's pretty ok in my book if it goes to social security.
As opposed to what has happened in the US, where everything is happy and everything is affordable. Innovation!
In fact, where industries are built is even more granular: Shenzen and the Bay Area. Even within the US, big cities have tried building their own tech hubs, and failed. Economic policy may have played a minor role in building NYC or SFO.
The GDP/capita of e.g. France is 10x what it was in the 1970s. There is nothing "unaffordable" about the European social safety net, except that there are political pressures to dismantle it (right-liberals like the Economist)
spotted the capitalist.
Explicit taxes are better than implicit taxes. Forcing companies to provide social services such as employment guarantees or health insurance to employees makes taxes look lower than they actually are.
In what ways, specifically? And which types of workers? Remember that labor laws aren’t exclusive to developers.
> It doesn't matter if it makes you feel sad.
Can we skip the transparent rage bait and personal jabs, though? There are other forums if you want to engage in that, I’m personally not interested.
Startups have a different set of constraints in Europe, one of which is the safety net for the people trying to become "ramen profitable".
Europe does lag behind though for many different reasons. One big is that the single market of EU is on paper large but in practice it is a lot of different countries with very different cultures and languages.
This is the biggest one. The single market is not really "done", and all attempts to deepen it face enormous resistance by national electorates that is now at the point to vote against anything that comes out of the EU.
For example, in order to sell a product in the Netherlands you have to have a sticker in Dutch, even though >90% of population understands English. That's a tiny thing, but makes a supply chain that much more complex.
For digital services it's even worse, the laws still differ significantly per country. Where I work we want to expand, but we still have to do it per country...
The american style lack of employment protection may play a part in fostering innovative companies, although I suspect being the primary superpower with the world's reserve currency may also play a part too.
How is being incredibly innovative making everyone in the US happy? I just see a lot of division and unhappiness right now. And some very rich people.
Those born between the late 40s and 60s want NOTHING to do with innovation, people, from every social background and culture; the development model imposed after the war has killed Western Europe. From being the former greatest secular innovators, we've become the last wheels on the cart, still with some pockets of excellence, but not for long, and most don't want to capitalise on them. This is without even considering the high-treasonous nazi governments in almost all EU countries that pursue foreign interests against our own. Because this has been happening for decades, to put it plainly.
The populations who, when young, sang "we are always twenty years old" today reject all innovation, and the cure is simply the social fracture that will lead them to marginalisation compared to their current dominance, unfortunately dragging everyone down with them.
It's really the failure mode of a socialized system; you end up pegging generations against each other and the older participant have a lot of power to starve off the young, especially when their cohort is so numerically dominant.
Democracy is broken because everyone has the same right to vote, so an 80 years old bastard will be able to weigh in on the trajectory for the next 10-20 years in the same way as a young 20-30 something without ever having to suffer the consequences. It's just beyond stupid...
But all of this is largely amplified by globalisation. The welfare is not compatible with a world where companies can decide to set up shop somewhere else in the world to benefit from cheaper labour cost and lower regulations and still being able to sell their stuff in the market they somewhat destroyed.
It ends up strengthening the state because workers defer to it and ask it to foot the bill. This all ends up being a vicious cycle where over time the state because massively obese and nothing moves because almost everything is dependent on it to some extent.
Now to be fair it is absurd that companies are allowed to make so much profit and keep most of it, not redistributing to the workers who are actually contributing the most. But it all starts with bad regulations and incentives. Companies cannot be expected to compete with foreign imports that benefit from much lower costs in every dimension, that is just unfair competition.
Free markets are an illusion that only benefits those at the top and this is largely where the problem lies. If imports were to be taxed appropriately, there would be less reasons to delocalize and the job market would be much more competitive for the demand side, rendering the layoff problem mostly moot. Who cares about benefits/compensation if the next job is right there?
Meanwhile it seems that Europe has been pulling ahead of us in measures that affect the quality of life for common people, including the working class. While the fear of "stagnation" was remotely believable during the 1970s, it's clear today that we're the ones who've been hornswoggled.
The US is still better for making software, as China is better for making printed circuit boards, but I'm not sure either of those things are all that bad for the common people.
Sounds like a propaganda piece to suppress both wages and rights here.
It isn't really. In fact, it's usually very easy: you just have to follow the exact procedure that is written down for you.
Every example I've seen when people have claimed differently, they haven't followed that procedure. Literally every time.
https://www.spiegel.de/karriere/entlassungen-wie-unternehmen...
The headline text translated:
> “I'm currently trying to get a severely disabled works council member out. We're well on our way.”
> Removing high earners from the payroll, compensating employees who cannot be dismissed: employer lawyers like Alexander Birkhahn are booming. Here, he reveals how companies can get almost anyone out—and how employees can secure their jobs.
But European firms have found some workarounds. For example, lots of engineers are owned, I mean, salaried by service companies who then contract that manpower to whoever wants some. A large company can then modulate year after year how many engineers of what kind they want to work for them. It adds a layer of intermediaries who collect a profit and shuffle paperwork - more costly - but engineers expect less salary to begin with. And this provides less control on who exactly does the work - which perhaps doesn't matter for the bulk of workers. But that's all easier than firing lots of people. It also makes it much easier to modulate between local and offshore engineering groups.
Pooling engineers is big business.
A term they like to use is 'crabs in a bucket'.
I had the opportunity to move to the US and likely make 2-3x what I make in Europe.
My question is - what for? I earn enough money here that I could buy a nice house and raise my family in relative comfort. Why take unnecessary risk when I already have what I want?
Also, just because the start up fails doesn't mean it was a waste of time. If you manage to provide employment for even just 3 or 4 people for a few years, help them and yourself develop, that is a valuable success.
Seems like the solution (in both the US and EU) is to have some kind of mandatory severance, probably something like continuation of salary for 1/12th of time employed, up to 12 or 18 months.
Edit: This might impact negotiations with mid-career workers, as it'll make it harder to attract someone with a long tenure at an existing job without some kind of guaranteed severance.
Is that really the cost of innovation? People protections?
I find that alone hard to believe / is the biggest issue in Europe.
When I think of failed innovation I almost never. think "oh man this product would be better if we could fire people".
Here is it: they assume the "innovative" one to be the U.S., not China.
First of all, they're greatly exaggerated. The specific case of a large German company that is union connected doing layoffs is cherry picked. It's basically the most shielded situation possible but far from the norm in Europe as a whole.
I'm from the Netherlands myself. Up until COVID we were on a path where employers were pushing everybody into flex contracts. It's a fixed length contract (1 year with a 3 month trial period) that may or may not be extended.
Maximum flexibility for employers, minimum job security for employees.
Did this lead to some spur in growth or innovation? No.
Europe's problem isn't related to worker conditions. It's a silly thing to say considering ludicrous US tech salaries.
Silicon Valley is the result of gigantic amounts of excess (Wall street?) capital creating a tech Valhalla. A black hole ecosystem swallowing money and talent domestic and abroad. Europe doesn't have this capital and the capital we do have we probably put in US tech stocks.
It's a similar problem to US manufacturing vs Shenzen manufacturing. The Chinese government as well as many Western companies invested decades and hundreds of billions into making it the state-of-the-art factory of the world.
Once it's in place you can't replicate it.
When hackers hear “innovation” they probably think of solving an existing valuable problem better. It seems economists and CEOs think of innovation as finding a better way to extract maximum mental labor for the cheapest price. Then use that to maximize the value of their own equity, at the expense of society if necessary. If you’re building a heavily isolated bunker in Hawaii or New Zealand, you’re not exactly signaling you care about the rest of humanity’s well being.
> Now covering 64 critical technologies and crucial fields spanning defence, space, energy, the environment, artificial intelligence (AI), biotechnology, robotics, cyber, computing, advanced materials and key quantum technology areas, the Tech Tracker’s dataset has been expanded and updated from five years of data (previously, 2018–2022) to 21 years of data (2003–2023).
> These new results reveal the stunning shift in research leadership over the past two decades towards large economies in the Indo-Pacific, led by China’s exceptional gains. The US led in 60 of 64 technologies in the five years from 2003 to 2007, but in the most recent five years (2019–2023) is leading in seven. China led in just three of 64 technologies in 2003–2007 but is now the lead country in 57 of 64 technologies in 2019–2023, increasing its lead from our rankings last year (2018–2022), where it was leading in 52 technologies.
https://www.aspi.org.au/report/critical-technology-tracker (March 2023)
> Our research reveals that China has built the foundations to position itself as the world’s leading science and technology superpower, by establishing a sometimes stunning lead in high-impact research across the majority of critical and emerging technology domains.
> China’s global lead extends to 37 out of 44 technologies that ASPI is now tracking, covering a range of crucial technology fields spanning defence, space, robotics, energy, the environment, biotechnology, artificial intelligence (AI), advanced materials and key quantum technology areas. The Critical Technology Tracker shows that, for some technologies, all of the world’s top 10 leading research institutions are based in China and are collectively generating nine times more high-impact research papers than the second-ranked country (most often the US). Notably, the Chinese Academy of Sciences ranks highly (and often first or second) across many of the 44 technologies included in the Critical Technology Tracker. We also see China’s efforts being bolstered through talent and knowledge import: one-fifth of its high-impact papers are being authored by researchers with postgraduate training in a Five-Eyes country. China’s lead is the product of deliberate design and long-term policy planning, as repeatedly outlined by Xi Jinping and his predecessors.
Your overall point might still be correct though.
Labor protections are indeed less, but this is actually a good thing. Like with many free-market topics, "labor protections" are a very dangerous thing, because they are a policy that sounds extremely good to the voting public, but many economists can tell you it's actually bad. US just got lucky, that it tricked the public to vote against it.
And if you're employed, especially as a SWE, medical care is better in the US. If you're not ... EU >>> US.
Me + USA = starkly unaffordable. Rents here have ~doubled in 6yrs and are up 5-fold from 2000. Wages grow at a much slower pace - insuring the gap between wages and expenses grows continually.
The only good thing coming out of both Trump's terms is the diminishing influence of the US, I can see your point on how US money could influence politics here but at the same time it's also now much harder for that influence to take hold properly. US influence was much stronger back in the late 90s, early 00s, it's been waning since 9/11, and kinda reaching a tipping point with Trump.
The next financial implosion, which is inevitable in the boom-bust cycles, can likely cement this diminished influence, the US won't have that much extra money sloshing around to fuck with other countries, they are losing long-time allies which propped them up to recover from the 2008 mess they created. It'll probably be the best time to decouple away from the US, including their financial influence in our politics.
I disagree
First, the vast majority of tech work is not in risky startups.
Second, the risk is known. That is why high salaries are negotiated going into startups.
Third, most comprehension is not in equity. Startup employees do invest in their retirement outside of their equity.
Fourth, anyone can invest in software in the public market and through institutional investments like mutual funds, ETFs, ect.
---
Criticize the system if you want. What's better? Feudalism? Communism? They're all much worse. Maybe someday someone will care enough to figure out a better system that doesn't repeat the mistakes of the past.
"Public" being the keyword. There is some irony in being on HN, a YC site, yet a random HN user cannot invest in a YC company: https://jaredheyman.medium.com/on-the-176-annual-return-of-a...
And then all your examples are about tech work and startups. Other types of work exist, and they comprise the majority of jobs. Labour laws don’t exist only for startups and tech workers.
You’re also ignoring the argument of the article.
> Criticize the system if you want. What's better? Feudalism? Communism?
Let’s please leave out the purposefully exaggerated bad examples and engage in good faith. You don’t have to change the whole system to increase respect and conditions for workers, as proven by the difference between the USA and Europe described in the article.
No I'm not. I've spent most of my career in the 4/ths of startups that aren't wildly successful. I've also walked away from situations where I wouldn't get paid because I'm not financially independent.
I'm not "rolling in dough," but I've done pretty well for myself. Of course I want more, but I'm well past the point of "enough."
If your business can't afford to fire people it probably shouldn't be hiring too.
If the signs are showing that you might need to fire people, you need to think and work for that: set enough money aside to pay for severance and/or buy-outs, not just decide "oh shit, I can't pay them, and I can't pay what is needed for me to fire them", that's just incompetence.
The way you present this is like business leaders are victims that were helpless on forecasting what their businesses need, which is exactly their fucking job to do.
What you want is the freedom to be shitty at running your company, and offload your incompetence by exploiting the workers under you.
I am sure there are ways to try and force companies, but I would suspect it's fairly complicated politically, given that that's usually not how that goes.
The EU single market isn't really single yet - and that is in my views the biggest obstacle to innovating start-ups being able to scale. If you want to release EU-wide you have to make sure you also comply to 27 national jurisdictions. It's hard. I work at financial services, and we really have to carefully grow and release per country. The UK would have been nice, but being even more different, for the company of our size they are a total no-go.
But I do think it works. The European countries with strong workers' protection are very attractive destination for knowledge immigration, they make a good chunk of top-10 in Human Development Index, and the whole of top-10 if you adjust it by inequality (so if you look at median at not an average).
> I am sure there are ways to try and force companies, but I would suspect it's fairly complicated politically
Less complicated in the EU than basically anywhere else in the world.
Oh, the idea was not that the EU couldn't compel companies to do things. They can. It's that companies can then go and move production somewhere else in the world. As they do.
Through innovation.
done by the workforce. The financial benefits of worker innovation flow upwards, first to shareholders then to executives. Whatever is left over is claimed by expenses, modernization and as low a wage as can be engineered.
Let's not mince words here - if the business fails it was because of the incompetence of those managing it, and it would fail whether or not it was treating employees unfairly. I won't accept this as an excuse to erode labor rights.
Moreover, what weak-ass crybaby rhetoric is that now? I always hear that business owners should earn more because they take risks. Failing is a very real possibility when you take risks. If you don't want to take risks just don't start a business.
Somebody is paying that price. If it's companies they are disincentivized to employ people in your market. If companies go somewhere else to employ people, jobs disappear from your market. If the jobs disappear, so does the money.
Labor protection does not "cost money". It is a limit on the degree to which workers can be exploited.
>If companies go somewhere else to employ people, jobs disappear from your market.
Does this actually happen anywhere in the usual suspect countries? Doesn't seem to be. Quite the opposite -- they all import workers, because the actual pain point right now is pension fund deficit with the ration of retired to working being skewed.
This is the result of relying too much on politics. If parents where to ask their children to pay for their expensive retirement benefits directly, most who tell them to fuck off, rightfully so. But since politicians have placed a level of indirection in between, it's not the responsibility of anyone yet everyone pays for it.
Socialist systems have a way of self-destructing after a while because nobody ends up being accountable for anything. Currently the politicians are good scapegoats but really the people who put those politicians in place bear as much responsibility.
If it had been about their own money, things wouldn't have turned out this way. Funnily enough since most people don't trust governments that much, they have double dipped, saving on top of retirement benefits and "investing" in real estate that they now rent at a high price to their children. This has created an obscenely well-off generation, that is now voting for immigration in order to keep their obscene retirement benefits, furthermore fucking their children.
Median wages https://en.wikipedia.org/wiki/Median_income?useskin=vector Average work hours
Purchasing power parity https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)...
Despite average work hours https://en.wikipedia.org/wiki/List_of_countries_by_average_a...
Better youth unemployment than Europe https://en.wikipedia.org/wiki/List_of_countries_by_unemploym...
> And which types of workers?
High-skill professionals, entrepreneurs, specialized trades, creative workers, young people, immigrants... and most other professions.
> Can we skip the transparent rage bait and personal jabs, though?
If you make nebulous complaints about "shitting on workers" without considering tradeoffs, you've made a feelings-based argument, so expect that kind of rebuttal.
https://en.wikipedia.org/wiki/List_of_countries_by_percentag...
https://en.wikipedia.org/wiki/List_of_countries_by_income_in...
Furthermore, making more money can be offset by having to spend more money for basic things like healthcare.
I’d say happiness is a much better indicator of how “better off” one is than how much money one earns. The happiness index takes a much broader view with several indicators (of which GPD per capita is but one).
https://en.wikipedia.org/wiki/World_Happiness_Report#Interna...
You’re entitled to valuing different things. But the whole point of my original comment is that I find the focus on money over people to not be something to celebrate. Clearly you (and the author) disagree.
> High-skill professionals, entrepreneurs, specialized trades, creative workers, young people, immigrants...
Despite the ellipsis, that doesn’t really answer the question. Those definitions are so vague, they could all together describe a single person.
> immigrants
Are you really arguing, with the current state of the USA, that immigrants are “better off”? I’m somehow doubt the ones who are being grabbed and sent to jail without due process every day would agree with you.
> If you make nebulous complaints
It’s not “nebulous”. Read the article. It’s in context.
> so expect that kind of rebuttal
If you think someone made a bad argument, do better. That’s what the HN guidelines explicitly ask of us. Responding with a bad answer because you think that’s what someone did does not benefit the discussion.
Again, if your objective with a discussion is to “win”, there are other forums better suited for that.
I don't consider "who is better off" to be a very good question. The answer is, the average worker is better off. My answer is therefore going to be vague. Of course, there are differences by industry, but do you have a point about that? Also, I am really arguing that with the current state of the USA, immigrants make higher incomes than immigrants to other countries. Saying that immigrants are treated poorly in other ways is just bringing up a political issue unrelated to labor economics.
And there are 20+ European countries with lower happiness scores than the US, including France, Spain, and Italy. So living in Europe means you’re about as happy as Americans but also poorer…
I don’t think it’s as clear cut as you’re indicating.
After experiencing the American work life I'd never trade my life in Sweden to earn 2-3x more in California, I'm sorry to say but it wasn't better to earn more in the USA, I could buy more trinkets but daily life was just not better.
There's a point where you should look past wages, what's the overall quality of life of living in a place where workaholism is rampant, stress from financial anxiety is constant, having to hedge for potential catastrophic events such as a health scare putting oneself into massive debt, losing your job in a downturn (or simply due to an industry going into herd mode and colluding on layoffs), so on and so forth.
Or you can keep using wages and money as your only guidance in life, I understand that's the only way most Americans can think about life. It's rather puerile though, as if simple metrics are the determining factor of a good life.
I've said this before, but every "US vs Europe work" debate ends with the European patronizingly scolding the American for thinking money is the most important thing in life. I'm also not interested in that.
I am only interested in the labor market.
You can say the numbers don't matter, but then you've adopted essentially an unfalsifiable position.
Another factor to consider is the ease of quitting your job. In the US (at least, I have found), it is quite easy to quite your job and find a new one.
This matches the logic under which it's easy to fire in the US. Every cost of a regulation has a side-effect. If it's easy to fire, it's easy to hire. The article explains how American companies are more willing to hire for positions which wouldn't otherwise exist.
If you are not interested in that, then quit your job and don't work in a position which involves innovation. Which in America, is easy to do.
That has nothing to do with the point. And again, you’re only focusing on one type of job which is not the only one which exists. There are other people in the world.
> I've done pretty well for myself. Of course I want more, but I'm well past the point of "enough."
And therein lies the issue. No, it’s not “of course”, that idea of “I have enough but want more” is not a universal desire. But it is a major source of the world’s problems. That’s how we get to major corporations exploiting workers, customers, polluting the environment, rigging elections… All because of “more” well past what they need. That is called “greed”.
> Rather, the sheer difficulty of shedding staff en masse—a reality of corporate life—steers Europe’s biggest companies away from making risky bets in innovative fields.
And then the article goes on to defend that point. It explains the difference in cost here:
> An American firm shedding workers will incur costs equivalent to paying those sacked for seven months and be done with it. In Germany costs amount to 31 months of wages for each employee let go; in France 38 months. Beyond severance pay and sops to keep unions happy, the biggest expense is firms keeping unproductive workers on their books they would rather be rid of. New investments are delayed for years as dismissed employees are gradually replaced. American firms quickly pivot to new moon-shot opportunities; Europeans ones are stuck in the same old mire as they haggle with unions, due often to laws devised nearly a century ago.
There's no economically feasible way to hire someone to build a product that may not succeed in the marketplace and guarantee them lifetime employment. That requires a certain about of clairvoyance about the market and many other variables that go into product development that no one has.
So your position is that there is no economically feasible way in Europe to open an new restaurant, bakery, hair or nail salon, or any other new enterprise. Yet reality shows that somehow such activities exist and keep happening.
The section "Classical Liberalism: Roots of the New Aristocracy", summarizes the fundamental philosophy behind why a certain amount of inequality is embraced in classically liberal countries (IE, democracies): Overall, it rises everyone's everyone's living standards; even the poor.
https://en.wikipedia.org/wiki/Why_Liberalism_Failed
(Just a warning: The author is very conservative and outspoken about social issues. Try to read to understand the author's opinion, instead of reading to agree or disagree.)
I’m not saying it’s clear cut. On the contrary, I’m saying it’s not. Unlike the person who responded to me, who claimed “the American worker is much better off than the European worker”, I am not claiming “every worker in every European country is better off than the US American worker”.
Restaurants, bakeries, hair and nail salons are not startups and do not do product development. Their market is known before the business is opened. Running one of those businesses is extremely different than a tech startup, where the risk is from not knowing what the market will be for the product in development.
(And you should know that, given that this message board you caters to the startup crowd, and is sponsored by a company that educates people on how to run a startup.)
I encourage you to read through YCombinator's "startup school" materials to understand the fundamental difference.
Who exactly benefits from a business going under? Its bigger competitors? The less well off are the ones that suffer the most from oligarchic sectors and cartels.
By GDP per capita, 7 of the top 10 countries in the world are European.
https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nomi...
Given this fact, will you now question your priors, or try to find a new justification for them?
Except it is not. I chose to live in the EU when I had the option to move to the US, and it is fine.
Unless your measurement of "being poor" is that you can't exploit people in a get rich quick scheme and make destructive amounts of money but being acquired or dumping your IPO in the stock market.
is it?
>Who exactly benefits from a business going under? Its bigger competitors? The less well off are the ones that suffer the most from oligarchic sectors and cartels.
The big thing going under right now is legacy auto manufacturers in Germany. That's sad, but the same happened in US without all the labor protections. It's just a lifecycle of industries -- they got fat and comfortable.
The way German manufacturers managed to outlive US ones while having stronger labor laws seems to contradict you story big time.
Your entire argument in the original response was “the American worker is much better off than the European worker”. That’s the only reason we’re discussing what that means. If “who is better off” isn’t a good question, then “X is better off than Y” isn’t a good argument.
https://news.ycombinator.com/item?id=45494890
> Saying that immigrants are treated poorly in other ways is just bringing up a political issue unrelated to labor economics.
They are not separate. Saying “it doesn’t matter that you could be wrongfully imprisoned and separated from your children without recourse for committing no crime, but that’s OK because if it doesn’t happen you’ll make a bit more money” is detached from the reality of what matters. Most individuals aren’t money-hungry ghouls who care for wealth above all, including their own personal safety and liberty.
I said the American worker is better off in general. The only question I don't consider is good is, "which types of workers?" Unless your point is that some kinds of workers are better off than others? In which case, make that argument.
> “it doesn’t matter that you could be wrongfully imprisoned and separated from your children without recourse for committing no crime, but that’s OK because if it doesn’t happen you’ll make a bit more money” is detached from the reality of what matters.
You put that in quotes, but my comments have nothing whatsoever to do with that. Can you clarify what this has to do with whether a country should enact regulations which make it difficult for firms to lay off employees?
> Most individuals aren’t money-hungry ghouls who care for wealth above all, including their own personal safety and liberty.
Great. Again, what does this have to do with labor market regulations? I am not interested in debating "what matters" generally, in a "meaning of life" sort of way, unless you can connect it to labor market regulations, the discussion you entered.
Numbers do matter, just not the cherry-picked narrow ones such as "median wage" with disregard for any context, and all other metrics that could somehow quantify quality of life vs purely financial terms.
> Another factor to consider is the ease of quitting your job. In the US (at least, I have found), it is quite easy to quite your job and find a new one.
Ease of quitting is also a non-problem, most jobs I had in Europe had a 1-3 months notice period which was easily negotiated if you really wanted to quit on the spot, no company wants to keep a disgruntled worker around so it's best to negotiate if said worker explicitly states they would like to shorten it.
> The article explains how American companies are more willing to hire for positions which wouldn't otherwise exist.
That's great for a selected set of jobs which workers would like to do that while being detrimental to society at large, making precarious conditions the default is not great for the less skilled people who prefer stability to keep their families afloat and secure.
> If you are not interested in that, then quit your job and don't work in a position which involves innovation. Which in America, is easy to do.
Not working in "innovation" still has the same precariousness, with no upside, making the divide in society between the haves and have-nots even more intense. It works up to a point, leave enough people behind and you get MAGA.
If you have measures in non-financial terms, I'm happy to consider those, as long as they have to do with labor market regulations.
> most jobs I had in Europe had a 1-3 months notice period which was easily negotiated if you really wanted to quit on the spot, no company wants to keep a disgruntled worker around
I could quibble that 1-3 months sounds like a shockingly long time from a US perspective, but the bigger problem is the "ease of finding a new job" part of the equation.
> making precarious conditions the default is not great for the less skilled people who prefer stability to keep their families afloat and secure.
The industries which don't experience as much instability are less likely to lay off people anyway. So workers who want stability can self-select into government jobs or something, which offer that stability.
> Not working in "innovation" still has the same precariousness, with no upside
Some industries are less precarious, I would say getting paid nearly twice as much is an upside.
> leave enough people behind and you get MAGA.
I don't think there's any strong evidence that income inequality caused maga. I couldn't find any evidence that poorer people are more likely to support Trump. But let me know if I'm wrong here.
If demand for those services exist, other businesses will take it. If the demand is not there, the business should not exist.
How your reply is related to the previous point of "Europe being poor" is for anyone to guess.
Correct, at the time it was about a 50% increase. However, given my food & shelter costs it would have ended up being more expensive for me to live in California.
The post I replied to was about high levels of taxation, which exist in the US also (the treatment of capital gains would have been much more favourable to me).
We can take NY (the state) and the Netherlands for example. Comparable populations (18-19 million), but GDP is 2.17 vs 1.27 trillion in favor of NY.
What it translates to in practice -- what kind of nice things New Yorkers have twice as much? Could is as well mean that Dutch do half the work compare to New Yorkers?
GDP is a measurement of market value of goods and services. This hyperfocus on GDP is a societal disease, and all sorts of terrible policy derives from this hyperfocus.
There's a nice public park on my neighborhood. It's a very scenic place, with a river going through it, with trees along its course, there's also a playground for kids with a large lawn area where people do picnics and relax around. Very pleasant place.
That park generates 0 GDP. From a GDP standpoint, it would make more sense to remove the public park and turn it into a concrete hellscape for people to park their cars. Large cars preferably - huge SUVs or pickup trucks for that matter, no weakass economic cheap hybrids. GDP has to grow after all.
And if that came to pass, the lives of everyone here would be miserable. But GDP would be higher, so that wins.
I’ve lived in both Europe and America, and if my personal situation allowed for it right now, I’d prefer to be in Europe. But I also do think GDP can be a useful metric, especially in the long run. I think Europe has great QoL, but I think it’s naive to not look at the growth rates of the major countries in the world and not be concerned about the long-term future of the European economy.
Edit: you’re also wrong about the park. Someone paid to create it, and someone pays to maintain it. Both of those numbers show up in GDP.