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This is why I don't give you a job (andorjakab.blog.hu)
588 points by fourspace on Jan 7, 2012 | hide | past | web | favorite | 529 comments

Dear Andor,

It is hard to leave this post without response. Both because I am Hungarian, and also because I happen to be an entrepreneur. The only reason I think this post deserves a response is because it seems you haven't started your business yet.

So here is my advice: don't do it. Just don't.

Not because of the taxes, but because of your utter lack of respect towards your future employees. If what's really holding you back is that you couldn't deliberately fire them, I see no reason why you would even want to hire them in the first place. I think what you don't realize is that you as an employer would become responsible for your people. They would depend on you and their monthly salary, and I think if you see your employees as some company assets you can just get rid of as soon as things get tough, you really shouldn't hire anyone to begin with.

I would like to believe you are slightly distorting reality to shake things up. But if you are actually serious about founding a business, I would suggest you do not hire your 12 males in their twenties right in the beginning, instead, you hire a few people you actually _want_ to work with, and pay them a decent salary. And pay the taxes, as high as they are. Just because _you_ would be happier with lower taxes, does not mean that it would help the country's economy. Maybe try innovating and charging more instead of low-balling.

Dear Antal,

I am well aware of this type of criticsm, because I've already got it with the original, Hungarian post. I could have rephrased it to avoid some of the misunderstanding. But I didn't change a word, only translated to English what has already provoked a lot of thought.

In fact during my long life as an entrepreneur I employed more people than most of my harshest critics. Most of my employees were actually women. I treated them with great respect and I'd like to believe they're thinking about me as a good boss.

In fact, this post isn't really about me. It's about something much bigger than me. I know it's provocative, over simplifies many things, even populist if you will. It's not an academic lecture. It's how many smallbusiness owners feel about an environment that is leathaly poisoned by corruption. In which being honest makes you very uncompetitive.

I get a lot of advice about how to survive under these circumstances, how to trick the system, how to avoid employees stealing my (intellectual) property, how to do business. In fact, that wasn't my point. I know all that. I'm fine, in fact I'm one of the last persons who will not be fine in Hungary.

In fact I don't mind high taxes and strong social security. What I'm worried about is that it's ok for others not paying these duties, and they make honest smallbusinesses uncompetitive. Among many other things that make this society really, badly, deeply screwed up.

So badly, that Hungary is now marching towards national socialism. Something, that every intellectual should fight tough against. And that's what I'll try to do with my blog.

Yes, I get advice on how to cheat the system, too. But it does not mean it's the only way to succeed. Maybe I'm an odd case, but I have managed to build a business where I can still respect and pay my employees properly, where I could be happy if someone was having a baby, and where I pay my taxes properly. And I still make a profit. Yes, maybe I would earn more otherwise. But I have always seen it as a choice, and my integrity and the well-being of others was more important.

My point was only that the system is not _that_ bad that you wouldn't have a choice. Of course, that choice is yours to make.

I'm not saying, that it's _that_ bad, that it's actually _impossible_ for everybody, in every case. It it _was_ that bad, it would be too bad. :) It would mean, there would not be any companies left. My point is, goverments should not promote the idea, that employers and employees are enemies. Because they're not. Or as somebody here has put it, "business are people". I am, for one.

Yes, social responsibility is a bitch for the individual businessman. Boo hoo hoo.

But for society as a whole, these things are good. Long maternity (and paternity!) leave is good for the children that will one day grow up and become productive members of society. Having laws around parental leave preventing discrimination means that society doesn't have to deal with paying unemployment welfare for women around 30, and having a hard time re-integrating them into the workforce at 40. Instead this cost is spread out among all the companies in the form of employment laws.

I understand that all businesses wish to have a workforce consisting only of young well-educated males that are never sick, never take vacations and work lots of overtime, but there's a cost to getting that, and almost all businesses forget, or refuse to understand the value society provides to them. You want a workforce? Sure, it's gonna cost you, both in corporate taxes, and in social responsibility by employing less desireable individuals. Tough shit, pay up.

I think a demand that businesses undertake some social responsibility is sensible, given the privileges corporations receive (like limited liability). I think many people overlook that corporations are granted real privileges beyond those granted to individual citizens.

But I'd point out that, if one makes social responsibility particularly onerous on individual businesses, "You want a workforce? ... pay up" may reach equilibrium not by people paying up but by fewer and fewer wanting a workforce. Then everyone is poorer.

At the end of the day, businesses are started and run by people. Pro-little-guy positions like "tough shit, pay up" are aggressive stances not just against abstract legal entities but also against often-well-meaning individuals who aspire to offer products and services. Even people strongly aligned with European social democratic values agree that the government can't do everything, so if you want locally produced products and services you have to ensure that the conditions are suitable for people to do that.

Yet, somehow I don't think we'd feel the same sort of emotional satisfaction from "You want jobs? Tough shit, stop voting for policies that make it hard to offer them."

"Pro-little-guy positions like "tough shit, pay up" are aggressive stances not just against abstract legal entities but also against often-well-meaning individuals who aspire to offer products and services." So nicely put. This was an important concern, why I decided to write this post from this perspective. "Business" is a person. I am a person. And if they treat me inhumanly, I die.

Bo-hoo-hoo. Cry me a river.

Funny thing, you don't even realise what a river ya'll crying. I just don't give a job. I'm totally fine. I'm rich, doing nothing, blogging away.

>given the privileges corporations receive (like limited liability)

Corporations don't receive limited liability. The owners of a corporation have limited liability.

Yes, sorry that's indeed an important distinction but I don't think it changes the substance of my comment; the people who form corporations to do business receive privileges.

Also, it's not just the owners; employees acting as agents are typically protected by the corporate veil, so it's not just a fat-cat capitalist protection. This is important for, say, employees managing hazardous waste that may be spilled (through employee negligence) into public land. Or imagine who would be willing to be employed as an aircraft designer if their individual errors could lead to personal legal liability for crashes.

Also, it's not just the owners; employees acting as agents are typically protected by the corporate veil,

That's not true at all. The corporate veil exists solely to protect investors' investment in a corporate entity. It does not extend to any other persons. Employees can and have been held civilly and criminally liable for their negligence.

I'd be grateful for clarification here, as I am indeed not a lawyer.

My understanding of vicarious liability (http://en.wikipedia.org/wiki/Vicarious_liability) is that the corporation is liable for actions of the employee in the course of duties (as an "agent"). I thought that the individual was liable only in the case of negligence outside the scope of employee duties (so if you're a garbage truck driver and also happen to be a burglar, you are personally liable for on-the-side burglaries during your rounds but not necessarily for accidentally crashing into someone's car).

However, I am not an expert and would appreciate clarification.

Edit: I did a bit more research and it turns out I misused the term "corporate veil" which appears to be a term of art (http://en.wikipedia.org/wiki/Piercing_the_corporate_veil) specifically pertaining to shareholder liability and which does not pertain to vicarious employee liability.

Thanks rprasad for pointing out the error. Terminology aside, is the rest of my commentary on vicarious liability accurate?

Instead this cost is spread out among all the companies in the form of employment laws.

No, it's spread out among all the companies that are willing to hire women. The companies that discriminate against women have a competitive advantage over those that don't.

(Note that under normal circumstances, discrimination is a competitive disadvantage. If I hated Indians, for example, I'd never have found my current team.)

Two issues:

1) You overstate the likelihood of the market driving out discrimination. Racist and sexist discrimination has existed for centuries without the market ever reaching the equilibrium state of no discrimination that would result if people were rational market participants (1).

2) Inevitably people bring up Scandinavia in these discussions, and for good reason. Scandinavian countries have both very generous family benefits (including paternal leave!) and high representation of women throughout the workforce. This isn't dispositive, but it does suggest the situation is much more complicated than the original post would suggest.

All in all, I prefer to live in a world where everyone pays their fair share instead of trying to eke out a couple extra cents of profit by not providing parental benefits to mothers and families.

(1)This is actually an even subtler issue, because it's possible for markets to exist where racism and sexism offer a competitive advantage, due to consumer preferences.

Scandinavians have sane laws about parental leaves : both parents get the same amount. Therefore if you hire someone in the 25-30 age range, there is a high risk of having to do without this employee, regardless of his/her gender. IIRC, the rule is 12 months to be split between the two parents, no part being smaller than 2 months.

The 'down' side is that now us guys also get discriminated against. I've been more or less asked straight out about my family situation at a job interview, and I could tell from the expressions on their faces that they didn't like my answer, and I didn't get the job. Of course it's impossible to say why, as there where a couple of other good reasons why they might have rejected me.

A whites only restaurant in a racist town doesn't seem very disadvantageous, in fact that would probably be the selling point.

I would imagine that those who don't discriminate would continue to not discriminate while those who do discriminate would continue to do so. Removing the law doesn't make women less likely to get pregnant. I am not sure your concept that we should remove the laws so that everyone can discriminate against women equally is really advantageous or very upstanding. Nor do I think the idea that people are going to discriminate despite the laws & it's too hard to prove that they're discriminating is a valid reason to remove the laws either.

A whites only restaurant in a racist town doesn't seem very disadvantageous, in fact that would probably be the selling point.

True, but we are not postulating an employer who's customers prefer not to be served by a pregnant woman. We are merely postulating an employer who wants his employees to show up for work.

I would imagine that those who don't discriminate would continue to not discriminate while those who do discriminate would continue to do so.

In that case, why bother with any laws on the topic at all? After all, those who do discriminate would continue to do so.

Removing the law doesn't make women less likely to get pregnant.

No, but it does mitigate the harm that her pregnancy causes for her employer. If she chooses to vanish from the workforce as a result of becoming pregnant, her employer can permanently replace her and is not obligated to take her back 3 years later after her skills have stagnated.

This in turn gives the employer a greater incentive to hire her, since she poses less of a risk to the business.

True, but we are not postulating an employer who's customers prefer not to be served by a pregnant woman.

I believe you stated under "normal circumstances" discrimination is disadvantageous. I am not sure exactly what you would consider "normal circumstances", but I was merely giving an example where discrimination would be an advantage.

We are merely postulating an employer who wants his employees to show up for work.

Which can lead to discrimination because a woman may be turned down for a job because of something she has no control over, her ability to become pregnant, regardless of if she actually has plans to become pregnant or not, or is even fertile.

In that case, why bother with any laws on the topic at all? After all, those who do discriminate would continue to do so.

People still murder others even though it's illegal. Why have laws against murder? They obviously don't work.

No, but it does mitigate the harm that her pregnancy causes for her employer.

Isn't the biggest harm losing an employee & having to hire someone new? That happens regardless of leave laws. True it might be less hassle now that they can fire a now expectant mother, but they probably would save themselves even that hassle by not hiring a woman in the first place.

People still murder others even though it's illegal.

Do you actually believe this claim?

"I would imagine that those who don't murder would continue to not murder while those who do murder would continue to do so. Removing the law doesn't make murderers any less likel to kill."

If not, your analogy is faulty.

Isn't the biggest harm losing an employee & having to hire someone new?

Did you even read the article? ...not only I couldn't fire her while she's away, I couldn't fire her when she comes back either. So I would have to fire the one who's been working instead of her for the whole time. When a woman would come back from the maternity leave I would be legally forced to increase her salary to the present level in her position, and also, give out her normal vacation days...

Do you actually believe this claim?

I would imagine that murderers would still murder & those who don't like to murder wouldn't murder. Laws don't enforce themselves, people still break them & sometimes get away with it. That is no reason to repeal them.

I couldn't fire her when she comes back either...

What would be the point of saving her job for her if you're allowed to fire her immediately upon her return?

So I would have to fire the one who's been working instead of her for the whole time.

So long as it's clear that the job was a temporary fill-in position, I don't see a problem with this.

When a woman would come back from the maternity leave I would be legally forced to increase her salary to the present level in her position...

Like you would have to offer any other employee at that position.

"No, it's spread out among all the companies that are willing to hire women."

I don't think it's a black-and-white issue of giving or not giving a job. These types of government restrictions cause a change in the supply and demand for the protected individuals. This results in a change in their average salaries (i.e. more restrictions reduce salaries). Women are still worth hiring, just at a lower salary, to account for the added risk.

So in the end, the cost ends up being fronted by the women anyway.

Only in countries where there aren't any laws to even this out.

Where I live, there's plenty of laws that stop companies from discriminating against women, thereby removing the competitive advantage, which in turn forces the companies to do the right thing.

Except that the process of proving discrimination is neither cheap nor an easy feat. How do they do it where you live?

You file a complaint with the discrimination ombudsman, they investigate and if they find that you are right they try to reach a settlement between you and your employer. If that fails, either party can take it to the courts.

Yes, there's a cost to these laws and these processes, but I think (and the politicians of my country obviously agrees) that it's cheaper and easier to do it this way, than to add a corporate tax and redistribute that money to groups that suffer from workplace discrimination.

It seems to work here, but that doesn't mean it would work as well elsewhere. There are so many factors that make up a society.

I would have taught it's the opposite. If women are discriminated against because of having children, I guess the companies that doesn't discriminate against women (or even actively helps them) would get all the good ones?

This is true only for irrational discrimination. If you simply hate women, but women are equally productive to men, then you will lose out on getting good women. I.e., you might choose a man of quality Q-d over a woman of quality Q simply because you dislike women.

But in this case, the discrimination is rational. Due to maternity leave, a woman of equal skill creates significant cash flow risks - if she takes leave, you either go for 3 years with her job not getting done, or else you hire a replacement and risk being stuck with unnecessary employees in 3 years.

"you hire a replacement and risk being stuck with unnecessary employees in 3 years"

That is not how it works in Sweden (nor anywhere else that I know of). The replacement is hired as a temporary position until the original employee returns.

Even if that's the case, you would most likely get an employee of lower quality or with a lower commitment if they know they will be laid off in 3 years.

3 years is longer than I've worked at most of my "permanent" positions

This assumes that there are a sufficient supply of men who can perform better than women.

No, this assumes that there are not many women (or men for that matter) whose hyper-productivity can make up for a 2-3 year leave of absence.

Not quite, because not every woman will vanish from work for 2-3 years.

Such laws make an employer indifferent between a man of quality Q and a woman of quality Q + P(taking leave) x (cost of leave). Whether or not hyper-productivity is required depends strongly on P(taking leave) and the cost of leave.

One other thing to note is that a lot of businesses are now granting paternity leave equal or near so to maternity leave.

It is only a competitive advantage for those unwilling to hire women if the cost of hiring women is greater than the benefit of the perspective those women who were not hired could bring to the team. However I do not believe that this is the case.

Way to miss the point of the post. This person won't hire anyone because it is too expensive to run a company with employees. The point is, Hungary has created an environment that greatly threatens the profitability, and therefore, sustainability of private companies. If the company doesn't exist, no oneis hired.

If laws would really require him to pay employees more than himself, he could offer partnerships instead of trying to exploit employees.

Hiring people is now the equivalent of exploiting them?

"Exploit employees" suggests that by profiting from other's time that you paid for is wrong. You are forgetting that the business owner also takes on risk with his investment in employees while employees has a steady income with no risk.

To the partnership answer, a lot of people don't want to take risks in general. This is true even in the US where people are way more entrepreneurial than other countries.

"But for society as a whole, these things are good."

Then why not triple the existing benefits? Why not multiply them by 10 even? If it's an unalloyed good, then why are we being so stingy with the good stuff?

If you account for only one side of the ledger, you can make anything look good. (Or bad.) Unfortunately, reality checks both sides. Wrapping it in a social justice narrative may make it easier to obscure the ledger to other humans but it doesn't fool reality for one Plank instant.

> "Then why not triple the existing benefits? Why not multiply them by 10 even? If it's an unalloyed good, then why are we being so stingy with the good stuff?"

What an absurd, and incredibly disingenuous thing to say. Water's good for you - in fact if you don't have it you die. So let's throw you in a huge pool and see how you like it!

Stop putting words in OP's mouth, and argue against his argument instead of twisting it into an easy straw man.

Tu quoque.

It is, as with almost everything in life, a balance.

It might be the case that the balance in Hungary is off as the author of the article claims, but that claim was buried in a one-sided rant against the cost of accessing the labour pool.

The point of my post was to even the scales, to remind everyone that it costs a lot of money to employ people, because creating employable people costs a lot of money. The CS college graduates we want to interview as potential employees of our dot-com startups don't materialize out of thin air. As cheesy as it sounds, previous generations invested in their future; we have to do the same.

He did talk about a balance, a very important one. He compared the cost of an employee to the value it can bring him as an employer.

A business simply can not hire when the cost of an employee exceeds the benefits, and if it can't make do without employees, it will simply go out of business. It doesn't matter at that point how much it cost to "create employable people" (itself a terribly loaded formulation, but moving on), because society has priced itself right out of the market, apparently.

Something a lot of people seem to forget is that if you want to use businesses as a piggy bank to fund social ambitions, you have to let some money actually flow into the piggy bank. It is not simply a given that money will be there.

As long as the takeup of parental leave among men is as low as it is in most places (outside of Scandinavia), current laws are simply sexist. Women are not protected as much as they are stigmatised.

The cost is not spread around much at all. The entire burden is on women who are discriminated against because they cost more to employ and on small businesses that cannot shift jobs around as easily as big corporations can.

My preferred solution would be to exempt small business (those with less than 20 employees) and don't grant any parental leave or benefits unless both parents take equal leave (Obviously single parents have to be exempt).

Why can't social responsibility be handled at a different layer, though? Why is it the individual businessman who has to pay special taxes for things like that? Why not just take it from general taxes across the board?

Here in Sweden, employing people can be a crippling move for small businesses.

>Why not just take it from general taxes across the board?

Politics. Most people don't see or hear about payroll taxes, but they would notice if you added 5% to their income taxes.

Plus, in a lot of cases it's administratively easier to say "the funding for this social program comes directly from this source of taxation".

You're right that taxes should be designed better; in a lot of cases they provide disincentives for a lot of beneficial behaviour. Taxes are just really hard to design correctly. It's a huge problem no one has control over.

This leads to an interesting digression...

My hacker's mind sees society the same way it sees ie software layers, kernels, APIs, libraries, etc. And from that POV, current society practices seem very inefficient and disorganized, and could be improved readily with a dollop of hacker values (eg lazy but smart) and cold hard logic.

One example: I am becoming more and more in favor of a minimum guaranteed income provided by society. Here are some good arguments in favor of that: http://www.xamuel.com/ten-reasons-for-guaranteed-minimum-inc...

Of course a MGI is heresy in today's society because we are still in a mindset where it's crucial that everyone pull their own weight lest other people suffer - a lingering meme from the days when 90% of the population was occupied with food production.

This of course ignores the notions that 1) society is insanely productive thanks to automation and it requires very little labor to pay for the true necessities of life (see for instance http://www.earlyretirementextreme.com - he lives on $7k a year) 2) many jobs today are marginally useful at best - think paper-shuffling mid-management 3) most of our income goes toward consumerist escapism which fails at making us truly fulfilled 4) much of the economy just exists to satisfy society's need for a status stratification mechanism (eg one is considered middle-class because one has such-and-such job title and education - if this classification went away then there would be general status confusion).

Then again, trying to fix society the same way one re-factors code may be hubris on my part...

Yes, I've long supported the so-called "negative income tax" -- the name is confusing; what it means is that below a certain income level, the IRS gives you money instead of you having to pay it, with the amount you receive being a monotonically increasing function of your income that is zero at the same income at which your tax reaches zero.

Personally I've long been inclined to the view that we should replace our existing welfare, unemployment, and Social Security systems with the NIT. Although SS has been sold as a retirement savings system, it is really a transfer payment system, a reality that is starting to become inescapable. It's just not right, I believe, for a transfer payment system not to involve means-testing -- there's no way to justify taking money from young middle-class workers, many with families, to support retirees who are well off anyway.

For some very interesting arguments against the NIT, backed by some experimental data, see: http://www.econlib.org/library/Enc1/NegativeIncomeTax.html

I actually think the problems could probably be solved, but I have to grant that they are nontrivial.

In order to afford such a plan, governments would have to impose really high taxes. That would be a much bigger disincentive to production than the safety net itself.

The government (at least in Sweden) already imposes really high taxes. And people here are still generally wealthy as fuck (relative to most of the world) and able to use a large chunk of their income for beer, trendy clothes, smartphones, restaurants, travel, etc (ie nice-to-have luxury goods).

It's all a matter of perspective IMHO.

Of course, I'm generally leary of "solutions" that come out of the gov't but that's another story...

Sweden's wealth is made possible by the relative abundance of natural resources for its size and population: it's population (~9 million) is just a bit larger than that of the San Francisco Bay Area, but it has a GDP of $443.718 billion (i.e., higher per capita than most American states, including California).

People tend to ignore the fact that both Milton Friedman, and Friedrich Hayek both supported a negative income tax/basic income guarantee.

Did they support it relative to all alternatives (i.e., relative to pure capitalism)?

I've certainly read statements by Friedman supporting basic income/negative income tax as a more efficient alternative to the existing welfare state. But do you have a citation for Friedman/Hayek supporting it in general?

Yes, you're correct. I should have worded that as supported over our current system.

No he doesn't, because there isn't one, and your interpretation is correct.

Income tax and payroll tax seem to me to effectively be the same layer. Yes, there will be a psychological difference when people see how much is taken out of their paychecks, but that's about it.

What do you think is more effective and cheaper? Legislate against discriminating against females of a certain age and punish companies that violate it, or increase the corporate tax with x%, have Skatteverket collect it, and politicians to re-distribute it in such a way as to provide jobs for females around 30?

It would be very easy to promote the employment of the elderly, the handicapped, whoever every normal person in the world wishes to help. The state should make it cheaper for me to employ them. It's that easy. Instead, they create regulations that harm those, who they aim to protect.

Totally disagree. Whats worse for society is a lack of jobs and miserable people that would bring up miserable kids.

If you've ever been an employer you would be able to relate, grow up.

I don't have much sympathy for companies who doesn't invest in their employees. If you value your employees and are in it for the long run, then your biggest problem are employees leaving you not the opposite.

Otherwise you are free to hire consultants and pay a premium to the agency and (hopefully) the consultant, but don't be surprised when they leave you in six months for something better (paid).

Also fresh graduates or self educated people are loyal and relatively cheap (especially in Sweden). But then you would of course have to invest in them.

"Social responsibility" is a scam to part productive people from their hard-earned money and give it to the leeches of society who sit on their asses waiting for the next reality tv episode.

If a woman wants to have kids, that's fine. Don't ask me to pay for her decision; that's her husband's responsibility. Oh wait. She's an unwed mother, and the father can't be found? Then she made a piss-poor decision in not keeping the proverbial "gate closed", and should be the one dealing with the repercussions of it. Not me, my business, my employees, or my customers.

As for long maternity/paternity leaves being good for children...in what way? Does it teach children a solid work ethic? Or does it teach them they are entitled to copious amounts of time off at other people's expense?

"Social responsibility" is just another term for theft, pure and simple.

The point is that the "social responsibility" produces a better overall society in the cases of the poor unwed mother you describe. The idea is that we all benefit. Those kids don't grow up in isolation and if they turn out to be bad/uneducated/criminal people, everyone else in society is affected.

You say it's a scam, but if so, who manufactured the scam? Are you telling me that those in power got together and decided to build a system which punishes the hardworking and rewards the lazy? Since when do people join a conspiracy to help others and hurt themselves?

You also make gross generalizations in describing the people that benefit from social programs. It's repulsive.

"Social responsibility" produces a better overall society? How? By encouraging a lack of personal/moral responsibility? By legitimizing theft? By acclimating people to expect copious benefits without having to pay for or otherwise earn them?

As for who manufactured the scam, you hit the nail on the head. There are those who are in power and wish to remain so, and the best way to do it is through bribery by theft, aka welfare/"social responsibility". It's not a conspiracy to hurt themselves (laws are for others, not them), but to gain control over others. It's just like giving wild animals food; soon they lose the desire and incentive to hunt/forage for themselves, and you've gained control over them.

Before you accuse me of "gross generalizations", you should know I was born into a dirt poor family. But we had pride, morals and a strong work ethic, and my parents were proud to have never taken welfare. We knew the welfare people and wanted nothing to do with them. Many had kids just so they could collect more welfare per child and proceeded to spend it on alcohol, cigarettes, gambling. Essentially whatever the parent(s) wanted, the kids be damned with most of them turning out bad--prison, murdered, or a second generation on welfare. The theme has continued throughout my adult life, only it's now extending into the middle class as well.

Finally, if you think my "gross generalizations" from personal experience and observations are repulsive, I know people who have a much harder stance on this topic than I do. They're a friend of mine and her colleagues--who are social workers in a major US city. She (and perhaps the others) got into the field to help others get back on their feet--only to find not apathy but hostility towards any attempt to get them off "social responsibility" programs, sometimes to the point where she's felt her life in danger.

A better overall society indeed.

"Social responsibility" produces a better overall society? How? By (hopefully) raising the lowest members of society out of poverty and poor education. Society here meaning "the group", not touching on any sense of morals.

Assuming that your "social responsibility" taxes are only intended for poor unwed mothers is a gross generalization regardless of your personal background.

Being an mother (or father?) is not traditionally a career choice. If the state wants to set up a formal program for people to get paid to have children, it should do that. A system that gives a financial incentive to having children can and will be abused.

Do you have any numbers that actually suggest poor parents are profiting off of such programs? Children are, strictly financially speaking, a huge expense.

Look into the marginal cost of raising a child. Children are a bigger expense for upper-middle class people who expect to send their children to a private school, pay for them to go to an expensive college, want each kid to have their own room, etc. For poorer families the main expense of a child is food. The younger ones can wear hand me downs, it is possible to shove two or three children in one room, etc. The poorer the family is, the less having another kid costs until it is actually a negative cost because each additional child actually brings in income by working.

What incentive is given in systems like Hungary's? Are you saying that such lengthy parental leave is an incentive to produce babies? This would seem to ignore all of the other impacts of having a child on your money and time.

I can't tell whether or not you're serious.

What if the woman was not poor or not unwed at the time of conception? What if her husband lost his job? Do you think having children should be a privilege limited only to married couples with at least a quarter million dollars in savings? And if so, do you at least support the state giving out free contraceptives to the "leeches" who aren't in such a financial position?

If a person can't afford their child, what do you recommend? Leave the kid near the dumpster to fend for him/herself? That'll teach a strong work ethic, right? Because we all know maternity leave is just a euphemism for vacation.

There is plenty of evidence that maternal leave is beneficial for children. Go to Google Scholar and search "maternal leave child outcomes".

A sampling from one paper:

>We find considerable associations between early returns to work and many of the outcome measures [regular medical checkups and breastfeeding in the first year of life, the receipt of all DPT (diptheria, pertussis, and tetanus)/Oral Polio immunisations (in approximately the first 18 months of life) and cognitive and behavioural assessment scores at age 3 or 4]


You've just summarized the philosophy of Ayn Rand, yet you would not have hired her.

@georgefox, I do think that you shouldn't have children if you can't support them, but that is their decision to make, and they should bear the responsibility for their decision.

@brown9-2 In theory it does, but if businesses don't hire said unwed mothers because government policies make it too expensive, it doesn't benefit anyone.

If someone cannot afford to feed his or her child and the child starves--literally or metaphorically--who's bearing the responsibility?

Edit: To be clear, I agree that you shouldn't have a child you can't afford, but mistakes happen, situations change, etc. It's a lot more complicated than the commonly portrayed notion of welfare mothers defrauding the government.

A classic among businessmen all over Europe (I'm Dutch).

And it's wrong(1).

When you spend 3000 Euros to hire someone who nets 1500 Euros, the difference is not "stolen" by the government, it's what you pay to have access to a pool of highly educated potential employees who get free(ish) health care, childcare, pensions that you as an employer don't have to worry about.

There are of course places where such taxes are not levvied, but it's a mistake to assume an employer can simply pocket the 1500 Euros difference as employees will demand higher salaries so they can save up for their own medical care, child care and pensions.

(1) Except the bit about maternity leave: it may not be three years (!) all over Europe but even if it's a mere six months it's enough to cause small businesses to be very reluctant to hire women in the child bearing age.

You're right, the money is not stolen and the comparisons to other countries/systems are sometimes very odd. But if you take away 50% from everybody, the assumption has to be that everybody wants to buy all the same things in the exact same amount and quality.

The government takes away your "right" to find your own balance between opportunity and security. The government takes away your choice and your power as a consumer to discriminate between different suppliers, which causes those suppliers to be worse than they might otherwise be. For some things, like health care, the assumption is broadly correct, if the quality controls work (that's a big if). For most other things it is not correct at all.

Not everybody wants to retire at the same age or at all. Not everybody wants to secure the same pension or start saving for it at the exact same time of their life. Not everybody wants to go to university. Not everybody wants to have children or send them to the exact same (mostly broken) type of school.

Not everybody wants to buy expensive protection against being fired or getting sick for a week. Not everybody wants to support the local opera house, museums, the government's very own TV network or that network's very own classical orchestra. Not everybody wants to subsidise railway lines to remote parts of the country or the post office there.

And then there's the problem that some groups of people that are close to the government or belong to well unionised traditional industries are getting a lot more out of it than everybody else. The system isn't driven by need, it's driven by affiliation. Affiliations are a complex web and hence entitlements are organised in an extremely complex and ineffecient way that makes people want to stay put once they have a achieved a certain entitlement status.

At the end of the day, we're paying 50% into government coffers and yet we have widespread poverty in many European countries because the poor are a minority without much of a say in anything.

I'm not arguing for letting people go hungry, untreated and homeless when they cannot help themselves. I'm arguing for redistributing money instead of forcing canned buying decisions on everybody. I'm convinced that catching those who fall does not take 50% of all monies earned.

> But if you take away 50% from everybody, the assumption has to be that everybody wants to buy all the same things in the exact same amount and quality.

Not really. It's a matter of risk pooling and public good. In health insurance, for example, it's understandable for a healthy person to pay a premium higher than the value of the services he actually receives. In exchange, if he suddenly gets in a car accident, an expensive procedure may be affordable. Additionally, his disabled neighbor may be able to afford his otherwise extremely expensive care. This sort of scheme only works effectively when everyone participates, especially the healthy, low-cost folks, who bring down the cost for everyone else.

The same or similar concepts apply in unemployment insurance. Someone with a stable job may not feel he needs unemployment insurance, but paying into the system makes the system possible. If only the unemployed and underemployed paid for unemployment insurance, we wouldn't have such a thing.

With education, things are a little different. There are some people who will never have children to benefit from paying for public education, but these people indirectly benefit from living in an educated society. I don't have children, but I'm more than happy to contribute to public education, since I value literacy not only in myself but in others.

Arts (e.g., your TV, symphony, and museum examples) are basically an extension of education, though I suspect some people would probably argue against me there.

Infrastructure in rural areas is expensive, but in my experience, at least, those rural areas are often poorer than the more urban areas. Your options seem to be (a) cut those people off from society, (b) subsidize their infrastructure, or (c) pay them to move elsewhere. I think (b) is the most reasonable option.

In the end, the people in the most need generally have the least to offer, so the people with the most to offer either have to subsidize, or the least have to go starving. Universal, progressive taxation seems like a very reasonable way to accomplish the goals of a civilized society.

I don't know if what I am saying contradicts you, but health insurance certainly can serve a rational purpose even if everyone that bought it was young and healthy. You premium simply needs to cover the average cost per subscriber plus some profit for the provider. It can (and possible should) also function the way you describe with the lower cost subscriber subsidizing the cost of the higher cost subscribers. But that is not an inherent part of insurance.

Agreed, that's a huge part of health insurance, and that's why I would never consider dropping coverage. But in practice, wouldn't health insurance almost have to subsidize the expenses of high-cost folks at the expense of low-cost folks? Actuarially, you'd have to manage to get exactly the average cost from each subscriber (plus an equal or proportional amount of profit) in order for that not to happen.

Now I'm assuming you're strictly talking about health insurance (though the same concept applies to homeowner's insurance, etc.), but isn't subsidizing high-risk/high-cost subscribers inherent in some forms of insurance? Take a pension, for example. Some people will live much longer than expected; some will die a year after they retire. The only way to account for this, other than periodically adjusting each retiree's income based on how unhealthy they are, is to pay for the pension of one ancient retiree with the funds from one who died young.

There is not "widespread poverty in European countries". "Widespread poverty" is what they have in Africa. In Europe the poor are kept fed, housed and clothed precisely because the admittedly very large and inefficient in many ways governments spend some of the tax money they bring in to keep them that way.

This causes problems, to be sure, in that it disincentivises some, but not all wellfare recipients from trying to escape their poverty, but it prevents people from dying of hunger in the streets, which is, imho, a good thing.

I would say that the differences in poverty between Africa, and Europe have more to do with the extreme difference in wealth than with the difference is social welfare systems.

If those things are predominantly healthcare, police protection, civil administration and national defense, then yeah, actually it's a pretty good assumption that everyone wants those things. The cultural items you cite are tiny as far as expenses, and presumably the're popular enough to resist periodic efforts to cut their funding. Any quibbles about apportionment and overhead from the government would be dwarfed by the inefficiencies of breaking them out of gov't (see the US healthcare system).

Nail on the head.

Did you see the chart in the article? Did you read the bit in the article where he declared that he considers 30% fair?

According to the chart, Hungary takes 50% more than the Netherlands. Are there any objective metrics at all that suggests that Hungarians are 50% better educated, have 50% better health and child care or 50% better pensions?

Stealing might be an inflammatory word, but what's going on in Hungary (and, indeed, many other European countries) certainly isn't a mutually beneficial transaction.

Do you realize 50% of a Hungarian salary is way less than 30% of a Dutch one?

The problem here is that Hungary's cash salaries are much cheaper than average, whereas Hungary's non-financial compensations are merely quite cheaper than average.

The only systemic problem described in the article is that private bosses have to shoulder the burden of helping mothers and older workers. Helping them is a societal decision, it ought to be supported by society: if you want to help pregnant women, let bosses fire them, then have the government compensate them with tax money coming from all companies, not only from those which hire child-bearing-age women.

No, not fire them. You shouldn't be able to fire someone just for having a child, that's a terrible disincentive for talented women to join a business (and also for people to have kids, which damages society as a whole).

Simply have the state pay their wages while on maternity leave (and the father's on paternity leave). That's how it works in Canada. Works well.

The point in the article is more subtle than that. AIUI that's what happens in Hungary too. But he has to hire someone else whilst she's on maternity leave (and though it's not mentioned, that recruitment process itself could potentially be quite expensive), and then, when she comes back, he now has to fire that replacement person (which is slightly tricky, as Europe doesn't have 'at will' employment practices, so either there'll be severance payment involved, or he could hire someone on a more temporary basis from the outset, but that's almost certainly going to be at a higher rate). And then, the mother has accumulated holiday days all the time whilst off on maternity, so will either take them all off at the point of official 'return', and thus he'll have to be paying two people for the job at that point (or else she doesn't take them all at once, but takes them in large chunks over the next few months, making it even trickier to have someone else cover).

How does Canada handle those parts?

I don't know the best solution, and I bet there's no perfect one. But for many qualified jobs, employees are not easily interchangeable. You cannot replace and reemploy women based on their family needs without disrupting the business needs. Unless you provide employers with a solution to this, there's a disincentive to employ women in non easily replaceable positions.

Hungary might be an outlier but right after it comes France and I'd say that the French get quite a lot for their money.

So like most things, "it's complicated". This article oversimplifies to the point of it being flat out wrong.

And not only that, it's completely unoriginal, being an exact transcript of what every shopkeeper in Europe will tell you after you've bought him a few drinks.

Look, my post isn't about Europe, but Hungary. And here, we do not get enough for our money. When you go to a hospital, you're scared to death. Okay, I didn't write a dissertation. It does simplify things, yes it sounds like whining. But it's very original. :) It is how I felt when I first wrote it in Hungarian, and I was sober. I wanted to buy beers, but they refused to sell it after 10 pm. Why? It's now legal to drink, but illegal to buy at night. My overall point is that the state is like an elephant in a porcelain store.

The problem you are facing is that very few people are familiar with your situation and so they take what they understand from their country or what they see in the news about some other country on the same continent as yours and they apply that view to your post. So it's no surprise that even with so many comments, very few have anything to do with what you wrote.

I don't understand Fidesz - or their motivations. I don't have the context (I'm rather new to living in Hungary) but it looks to me like they think they can tax their way out of the hole the socialists left behind. The fact that we have the highest VAT in Europe now seems to corroborate with this view.

The problem is - it doesn't work. People just find ways around the taxes. They have to do so. People need to eat and live and if they do everything above board they will not make it.

So as I read your post - I was bemused, trying to picture this Hungarian who pays all his taxes.

High taxes are not a Fidesz invention. It was always like this since 1989. In fact it was Fidesz who won the elections by lying they will reduce burdens. Of course, the did the opposite. They increased them, and completley destroyed the whole economy. Now we have the VAT world record: 27%. All three rating agencies downgraded us to junk, the Forint is done. It's a huge problem for millions of people who have depts in CHF or Euros. They are basically screwed, big time. I wouldn't be surpised, if it was our PM and friends shorted the Forint.

As for paying the taxes? Some people do have to. You may go to jail if you're in the way of people who have good political connections.

So then the problem isn't taxes but what your government does with them?

Fine, I can see that. But your post barely says anything about this problem, focusing instead on how much it is you would have to pay.

Which is exactly what every shopkeeper does after you buy him some drinks. Hence the confusion :-)

The problem is very clear. Burdens or legal businesses are high. This gives illegal business (that our goverment doesn't stop, being extremely corrupt themselves) a very unfair advantage. It's like boxing with an opponent who has a gun. This is the problem.

And yes, also, that when you get sick of it all, and go the hospital that is financed with your tax money, not those, who do not pay the taxes, you are literally scared of the conditions. You are walking on tiptoes in piss.

This is basically what I can whine about when you have paid me a drink.

I don't really understand why maternity leave is a problem. The employer can hire someone for a specified time, say three years, then take back the young mom. In Hungary a lot of companies do this, and the new hires themselves are usually young women, who'd like to take the maternity in a few years, anyway.

It's a problem when businesses still have to pay the employee's salary while she is on maternity leave in addition to the salary of her replacement. Also, there is a lot of productivity lost during the transitions. If it were me, I would prefer to keep the "replacement" rather than hire the old worker back. Apparently you can't do that in Hungary.

It's a problem when businesses still have to pay the employee's salary while she is on maternity leave in addition to the salary of her replacement.

This is not true, the maternity is paid by the state. He mentions the high taxes as another problem, but in fact that's why they are that high, it's the same problem looked from the other side.

Also, there is a lot of productivity lost during the transitions.

It's common here, that women on maternity take a correspondence course or learn languages, etc. Often they are more skilled at the time of their return.

The law is like that because companies are much more powerful than the individuals. They have to take you back, that's fine, but still they can (and often do) offer you a position 300 km from your home, or exclusively in night shifts, effectively force you to quit.

I concede point one, I guess I didn't completely understand the guys complaint.

As for point two, just because she's more skilled doesn't mean there isn't a productivity loss. It takes a little while to get settled (back) into a job. If the employee on maternity leave has been taking correspondence courses, good for her, but her replacement has spent that time working at the actual job. If the replacement has been doing good work, I would rather keep him/her rather than hire back the original worker, who might be "out of the groove" after a long maternity leave.

"It's common here, that women on maternity take a correspondence course or learn languages, etc. Often they are more skilled at the time of their return."

If they can learn a language or take courses, why can't they come back to work?

You can learn a language at home by using Rosetta Stone software, and take correspondence courses also by staying at home. It's hard to take a baby to work. Small children require attention in fits and spurts that are not conducive to doing work that requires long periods of concentrated cooperation with other adults.

Don't underestimate the difference between The Netherlands and even a seemingly well developed country like Hungary. Our GDP per capita (PPP) is over twice theirs. What could you still do with half your income? Arguments that hold here don't just carry over to there.

But they do. The philosophy of the system is the same, just the details, the macroeconomic variables are different. Hopefully they will even out in several decades. The Netherlands are a good example of what we are trying to achieve. (I live in Lithuania, a country with a similar GDP (PPP) per capita to Hungary.)

After the first paragraph I was already thinking "Wow, I don't want to work for E760 per month, that's basically on the poverty line!"... then I checked where the guy was from; Hungary is a backwater, and absolutely NOT representative of the EU, probably not even of the old eastern bloc.

Three-years maternity leave? That's unheard of in western Europe, most countries allow for less than a year (my wife got 6 months in the UK); men only recently started to enjoy some rights in that sense (in the UK it's two weeks).

He talks about a post-50 "protected age" where you can't fire people. That doesn't exist in the UK, where we have the opposite problem (firms firing people near pension age, and then hiring youngsters at 1/3rd of salary). I know in other countries laws are tighter (in Italy it's fairly hard to fire people, for example), but as people say over there, "Facta lex inventa fraus" (as soon as a law is written, a way around it will be found"): in countries with rigid laws, firms now hire almost exclusively on a temporary basis, i.e. they hire people as contractors for years or even decades, abusing the relationship.

The high taxes and pension contributions are also a factor in Italy and in France, but not elsewhere.

What this post is representative of, is the general douchebaggery of European "entrepreneurs"; they usually come from "old money" (banks are very conservative with their lending, favouring entrenched players) and bring a terrible mindset to the workplace, i.e. "screw the employees, they're just idiots anyway". This obviously doesn't motivate workers, keeping productivity low.

There are real entrepreneurs in Hungary, like myself, trying to get a product off the ground, raising money, eating ramen.

Some startups from Hungary with funding:

  - LogMeIn: remote-login-as-a-service, had Nasdaq IPO
  - Ustream: live streaming, raised $100M
  - Prezi: nifty presentations, raised $10M
  - Indextools: webmaster tools, acquired by Yahoo
  - Pocketguide: nifty iPhone tourist guides, raised couple $Ms
  - Gravity: recommendation engine, raised couple $Ms
Yes, we'd need a lot more.

For those of you who've used the Hamachi VPN software, LogMeIn are the guys behind it.

Arhh yes, the open source VPN software that LogMeIn decided to buy that they essentially broke the app with a software update to then force everyone to pay (I don't have the exact figure) something like $200+ a year to use.

I remember those guys!

    Hungary is a backwater, and absolutely NOT representative of the EU, probably not even of the old eastern bloc.
Unfortunately, it is. For example, the median salary in the Czech republic (the western-most "eastern Europe" country, also in the EU) in 2011 was around 630 Euro (net), which is about $10k per year (net).

I also cheer for the lofty let's-share-the-social-burden ideals that people present in this thread. But I fear these folks are just blissfully oblivious of how their money is redistributed and where it really ends.

> Three-years maternity leave? That's unheard of in western Europe, most countries allow for less than a year (my wife got 6 months in the UK);

9 months is the "baseline" maternity leave in Finland. My sister had a baby and ended up being away from work for almost two years. She just started working again this week, and the same company was legally obligated to take her back.

Still not three years. You wouldn't get three years in Italy, nor in France or UK, i bet not even in Germany.

If you have someone gone for a year in a small company, that's a huge problem. It's not that they're remote for the year, they're gone. They don't know the new staff, work, projects, etc.

One of the favorite words around here is "pivot" and ponder how a company can pivot successfully with some of these considerations. Sometimes a pivot will completely change a product, business model, industry, etc and the company has to hire or layoff people accordingly.

It sucks by all measures (I've been on the wrong end of that), but ponder how much more difficult that gets when some of your staff is untouchable.

Even if it's not a problem, it changes your mindset and gives you yet another thing to worry about.

Not all the ex-socialist block have 3 years maternity leave. Here in Bulgaria it is 9 months and it is payed by the state (from social security fund). Also the taxes are a lot lower. You have medical insurance (cost of having non-payed health care system: 8%) + social insurance (pension, unemployment compensation, maternity leave: 22%). This insurances are calculated on base up to 1000 euro - so your insurance taxes are max 30% of 1000 euro even if you get more than this level. Over the rest of the money you have 20% flat state tax. On every purchase you have 20% VAT.

Being an entrepreneur is like that: high risk, high stakes, high stress, (hopefully) high rewards. That's how it works. If you want to reduce risk/stress, then you would have to accept less rewards. No employer will ever accept that, so i don't see why workers should accept to suffer in order to make his life easier.

As an entrepreneur, it doesn't make sense to accept no profitability though, and that's what the original article was all about. Trying to maintain profitability in the face of all the obstacles he mentioned.

Yes this is the same sort of individual in the UK that pops up from the CBI crying wolf when ever anything changes in employment law - claiming that its hard to fire people.

Actually its not, employers always have the whip hand - what they are complaining abotu is that its harder to act in grossly bad ways in the UK.

I'm an entrepreneur from the UK living in NYC on an E-2 investor visa. The key factor in employing people in NYC is the 'at-will' employment : Just as I only have to give people one day's notice, so they are only obliged to give me the same. The reduced 'friction' in the system means that I can grow a company much more quickly - and not have a trailing obligation if an employee doesn't work out. This is a huge benefit compared to the UK. You may point out that this gives me incredible power over my employees : But it works both ways - somehow wages for those employees are higher than they would be in the UK...

As for maternity leave, the same issue exists in the USA, to the extent that any firing of an employee has to be non-discriminatory. As for health-care : That's a very expensive nightmare in the USA, and it would be far more efficient IMHO for it to be wrapped into a % tax levy, rather than flat monthly rates (but that's a rather political statement in the US).

Wow I always hear people talking about why Silicon Vally cannot be reproduced in Europe, but I have never seen anyone put it so pointed. Thanks for education someone in the States about the realities of some areas of Europe.

As far as I know the rant is about Hungary, not the European Union in general. Labour and tax laws aren't the same everywhere in Europe, and the Hungarian economy is hardly representative of the EU's.

Reproducing Silicon Valley is another story. Arguably it's very hard to do even in NY or other parts of US that are more or less similar to California. After all, labour law is just one of many factors. For instance, even with all that overhead, I bet it's still much cheaper to hire a bunch of top-notch, English-speaking programmers in Hungary than in California.

> even with all that overhead, I bet it's still much cheaper to hire a bunch of top-notch, English-speaking programmers in Hungary

Actually, towards the end of the post he delineates the real tragedy: nobody starts a legal small consulting business in Hungary, for all the reasons he states. It's cheap to hire hi-tech labor in Hungary as long as you just send checks to individuals and leave the government out of it as much as possible.

So the situation is that the gov't, through heavy-handed social legislation, makes it basically impossible to start a small business legally. Big business I suspect has ways and means of gaming the system and making a profit regardless. Bad for Hungary.

Hungary is a bit extreme, but there are many countries in the EU and in the eurozone with very similar problems. "Social protection" needs to be cut down in most of Europe, we cannot be competitive otherwise.

Heh. Downvoted as expected. Still true though.

Sure I understand that different parts of Europe are different, it was just nice to see someone explain it, because we in the states keep hearing regulations are overbearing in Europe. I understand that it's not all of Europe, and that was my point, we tend to get the rolled up news over here and not being close to the situation it's can be difficult to understand the dynamics. This article helped me understand the nuances of the gripe.

Define "top-notch". Because under my definition of the term, I would expect there to be very few engineers in Hungary that match that description.

IMHO, Silicon Valley works because it houses a hugely disproportionate amount of the very best engineers, and from my experience the top .1% or so of engineers open up possibilities that otherwise simply aren't there.

Yes, the capital is here, but I think that's an effect and not a cause. If you took Facebook and started it in any other place in 2004 (with just a handful of exceptions) with exactly the same access to funds I highly doubt it ends up as it is today.

Eastern Europe is notorious for highly skilled engineers. Because careers in Engineering and natural sciences have a long history and have always been viewed as prestigious positions.

And not everyone has emigrated to California, some have but US emigration is just too rigid. Many of us would want to move to SV, but unless we want to endure H1B slavery status our doors are pretty much closed.

However if anyone out there wants to take a shot at hiring some of us as contract workers, contact me.

I am from a milieu with excellent Engineering talent and could easily build a 5-10 man team of excellent engineers at roughly 60.000$ annual price point.

I'm all about the don't complain about down votes protocol.

However I am getting massive down votes here, for something that is neither rude, neither false, neither off topic.

I find this kind of attitude (not even bothering to teach me a lesson if I erred) very rude.

Totally agreed with. We have an office in Romania and they do better work than most developers I've worked with in the UK.

...Oh and they cost roughly 70% less

All companies started in Hungary, even if they later become US entities, chose to keep their engineering in Budapest, because talent is available, and for much less than in SV. Also, it's less saturated.

E.g. I had a chat with a VP of a chech-US startup and they were inquiring about the possibility of expanding in Hungary, because they satured their chech sources, but SV is too expensive / also saturated.

Also, companies like Morgan Stanley, SAP or Microsoft are not starting new offices or expanding in SV, but they are over here.

So, talent is available. In fact, this is so obvious that companies like Morgan Stanley et.al. showed up here, giving good salaries, making my job as a startup guy trying to hire much more difficult.

To be fair though, specific talent like "has worked with Hadoop for a year" or "has worked at Google on the core search engine" is not present here. Also, people are much more likely to prefer to work at a BigCo than in a small startup, compared to SV.

You will not experience the problems I pictured in the post, when you don't have to compete in Hungary. In other words, of course it makes sense to hire excellent Hungarian engineers, and sell the product elsewhere. Problem is, when you have to compete with companies, who do not pay their taxes, who do not pay social security after their employees etc, and their prices are HALF of your costs. And of course they have excellent contacts, and they will sue you with obviously false claims, and then you go to court, and loose. Then you will understand depression.


I understand what you're saying, and it's true, in fact I've worked at small companies and been subject to it.

My post was specifically meant to refute the parent's point that:

"I would expect there to be very few engineers in Hungary that match that [top-notch] description".

:) Thanks mate.

> Define "top-notch".

According to the dictionary: outstanding, notable, superior. Seriously, though, take any reasonable definition. If you asked me a number I'd say 1% but yeah, you could say top 0.1%. I can't see how that gives any more precise information though, given that we don't have a practical, objective way of measuring programming skills.

> Because under my definition of the term, I would expect there to be very few engineers in Hungary that match that description.

Why? I'd expect any country with >10 million people, very high level of literacy, a couple of good universities and internet connectivity to be home to a good number of top-notch programmers. I can't see how that's particularly controversial.

In any case I'm not sure why you're taking issue with this. I never said that Hungary has proportionally as many top-notch programmers as in Silicon Valley. My point is simply: hiring people in Hungary is no more expensive than in California in terms of U$; if you have a company with 20 programmers in SF you could sure find 20 replacements in Hungary and save on payroll.

Here's my minimalist definition of "top-notch engineer" in regards to Silicon Valley startups:

- has experience working in the early stages of a venture-backed startup

- went to one of the top schools in the world, such as Stanford, MIT, Harvard, etc

- has an extensive personal portfolio of software projects on which they contributed

My point is that Silicon Valley "works" because it has lots of people that meet 2 or 3 of these bullet points. There is no place in the world that really comes close.

Nobody is objecting that you can surely hire people cheaper in other countries, but for small companies the cheapest labor source is almost never the winner. It's far more important to have the very best engineers.

> - has experience working in the early stages of a venture-backed startup

This has no effect on someone's ability.

- went to one of the top schools in the world, such as Stanford, MIT, Harvard, etc

Those are not "top schools in the world". The only advantage they provide are great contacts and opportunities thans to those contacts. In terms of knowledge, many schools around the world (including many in the former Eastern bloc) provide excellent education.

> - has an extensive personal portfolio of software projects on which they contributed

Again, this has nothing to do with being in SV. Many bast-known open-source projects were started outside US (I'll leave it to someone else to list them, but I'm sure you can think of a few off the top of your head).

Woz would have met at most 1 of your bullet points when he started at Apple.

The world was a way different place 30 years ago. You couldn't reasonably have expected someone to have an extensive software portfolio or have experience at a tech startup. Now, both are commonplace among top hires.

The definition of a "top-notch" programmer is about how competently he/she can write required programs, not about how "commonplace" among Valley programmers are his/her biographical details.

ADDENDUM - An example of your bullet points working just as badly more recently than 30 years ago:

Cevat Yerli when he started Crytek

I would expect there to be very few engineers in Hungary that match that description

And you would be so incredibly wrong. Hungarians are smart. Smart like Americans used to be, back in the 19th century when an American who did his work out in the barn could revolutionize entire industries for breakfast.

And why are there so many top-notch engineers in SV? Because of the climate, because there are more natural-born engineers, or because many top-notch engineers have moved and move there because there is the capital and the best environment for startups?

And why would you expect Hungary to have very few top-notch engineers?

There are a lots of misunderstandings about cost of firing, cost of employment, etc... in Europe. What is true is that it is complicated because every country is different, and some countries can be anal about one thing that others are not. A typical example: in France, you often have to consult union before having to fire people (especially true is big companies). The key point though is "consult". Whether they say yes or not is actually irrelevant (from a legal POV, that is).

I am also tried about the "stealing your money argument". In the US, the salary you get after taxes still needs to be used to pay health insurance and retirement. In continental Europe, that's part of the 'stolen' money. You can argue whether it is a good system or not, but an honest comparion is to e.g. remove the social contributions for health (around 6-7 % for a beginner engineer with a good degree), and pension (around 10-12 % IIRC). When comparing e.g. the US vs European country, this has to be taken into account (the graph in the OP is pure non-sense in that regard for the OP argument).

As far as Silicon Valley goes: from all countries I have been working in, Japan has by far the lower income taxation. Yet, it does not especially thrive in a silicon valley manner (I also believe California is far from being the state with the lower income tax in the US ?).

>remove the social contributions for health (around 6-7 % for a beginner engineer with a good degree), and pension (around 10-12 % IIRC). When comparing e.g. the US vs European country, this has to be taken into account

Then you'd have to remove our 7.65% for Social Security and Medicare (employers pay another 7.65% on employees behalf).

I'm glad we can't reproduce Silicon Valley in the EU. I'd rather we had healthcare and education for all, a top quality transport infrastructure and a more equal society.

If we're going to build tech clusters, let's do it on our terms.

Healthcare for all? Not in Romania where in many cases you'll simply die if you can't afford to pay for treatment and very often for diagnosis as well if it involves advanced checks taken for granted elsewhere in the West. Poverty is the problem. And I doubt it'll get solved anytime soon given the business environment here.

I'm not american, but I think your comment is in bad taste. The region is looking at an Argentina-style economic collapse. It's disingenuous to say you have better social programs when, you know, you might not have been able to pay for it.

Once again, I feel like pointing out it's not only Europe. The US is just as insolvent, and whatever chain reaction might start from Greece can/will reach any Western country at least. Asia is in better shape right now.

Every time a country takes on more debt, it means it's failed to live within its means. Very few countries have managed without taking on more and more thin-air money year after year.

Western economies are just a huge intertwined clusterfuck. Don't think you're safe.

Please explain which Asia? The Asia which has generations of poverty and casting and wants to do nothing about it? The asia that is largely influenced by super radical islamic clerics? The Asia that will die off soon because its birth rate is so low that it won't replace its aging population? Or the Asia that is so reliant on American and other Western consumers that they have to continuously deflate their currency in order to keep their citizens from revolting against what is one of the largest plutocracies of all time? Sure the west has problems but nowhere near Asia's.

> The Asia which has generations of poverty and casting and wants to do nothing about it?

No, the Asia that has recently engaged in less gambling at the casino of the "financial services industry" than the West.

Generations of poverty? Well, that can be explained by human nature. Various "Elites" oppressing/abusing/killing people, and confiscating the wealth created by them. Our problem as a species is that the West consists of the same homo sapiens as all the Asian countries you have a problem with. In other words, our collective problem is that we're all human beings.

Fair enough. I actually do think there are countries that are in a better relative position than both the U.S. and Eurozone, but none that I can think of in Asia. Specifically, most of the Northern European countries (Finland, Sweden, Norway), Canada, Australia, and, surprisingly, Brazil.

Yeah, the Nordic countries seem to be in better shape, likely thanks to their heavy taxation.

The PIIGS countries have recently adopted "austerity measures", but for example here in Finland, our taxes and price-levels are so ridiculously high it's like we're in some kind of permanent austerity mode.

Our VAT was recently raised 1 percent, to 23%. It would be quite an accomplishment in the field of pissing away taxpayer money if Finland was broke. Oh wait.. even Finland can't get by without more debt practically every year. Go figure.

As for the overall shape various countries are in, at least Germany, The Netherlands and Denmark seem to be doing alright.

In Asia, I bet at least Singapore, Hong Kong, and probably South-Korea are in decent/good shape. Australia has a nasty property bubble going on, probably about to deflate. Same thing in China, but they've gone completely overboard what with all those ghost cities etc.

Things vary on many axes, though. I'm pretty sure that, in Silicon Valley, if you came out and said you would never hire a woman or an old person, you would be fired immediately and blackballed from managerial positions for life (or if you were the owner, sued into oblivion). Meanwhile, in Hungary, I'm going to guess Jakab Andor keeps his job and will be free to hire or not hire who he likes--- because Hungary presumably doesn't take antidiscrimination laws as seriously as the US does.

(Also, there's much less corruption in the US, which is probably the key difference.)

Just because you can't say it, doesn't mean its not in the back of every hiring managers mind. I've certainly heard people refer to it privately.

Anything that increases the base costs of starting a business, such as these, will reduce entrepreneurship.

He's saying it in the context of pointing out problems and inefficiencies of the system. I interpreted it as "these laws designed to protect women and the elderly are in fact incentivising bad behavior by employers, and thereby doing them harm, not good."

Actually he says he wouldn't hire anyone, because he won't be attempting startups in the first place. You shouldn't get in trouble for your hiring policies when it is simply: "I don't have employees."

He didn't say he would never hire a woman or an old person, he said he wouldn't hire a woman or an old person in the context of a startup.

He might be a HR manager in a larger company with good resources, happily hiring all kinds of people for all we know.

I agree, that this problem is the most obvious with small companies. But I think that even on the national scales these regulations harm those, whom they aim to protect. It's a wrong concept to treat the employer and employee like enemies. The good concepts would be win-win-win scenarios. For example, goverments should REDUCE the cost of hiring the handicapped instead of forcing companies to hire them.

A government can't say "no prenancy until you have saved enough to raise your child without working", it's unenforcable.

If you force companies to pay for women being pregnant and raising children, companies hurt. If you force companies not to pay, women hurt because pregnancy means instant unemployment and loss of income. If government pays, everyone pays in taxes even startups and people with no children (but at least the cost is spread widely). If nobody pays and it's left to charity, women and children live in poverty and suffer from that.

In individual cases, a couple can choose when to have children such that they can win no matter the situation, by deciding to save, or arrange to live on one income, etc. But I don't see any win-win scenarios that can be enforced from outside by legislation. Can you?

For example, goverments should REDUCE the cost of hiring the handicapped instead of forcing companies to hire them.

How could they do that (without charging you taxes to pay for it)?

"How could they do that (without charging you taxes to pay for it)?"


Let's say, in my country €760 NET is a very good salary. If I advertise the job, I get thousands of people to choose from. Some of them will be handicapped. Let's say there is a goverment regulations, that employing the handicapped is duty-free, like cigarettes at the airports. Now I have two options. I either choose somebody who isn't duty-free, and pay €1572 (the empoyee still gets only €760), or, if I'm LUCKY, I will find a somebody suitable for the job among the handicapped persons, and I can choose him or her for the job. That way I've cut my employment costs two half, without paying ANY taxes. It's a nobrainer, even if I have to make some changes in my office to accomodate it for the duty-free person. Because I can slash my employment costs into half on the long run, without paying 1 cent less Salary than to everybody else. And the state? It's a win-win-win. Now they have a lot less people to worry about.

if you came out and said you would never hire a woman or an old person, you would be fired immediately and blackballed from managerial positions for life

I took it as an example of why he won't hire anyone and why he won't even sell his apartment and start a venture. As such he would have no company to represent in saying those things. Further if you never hired anyone, I am pretty sure you could state your reasons in America and not run afoul of legislation. Now if you openly stated such and then hired only 25-50 yr old males, sure you are asking for it and are going to get it.

Europe (at least in my country, eastern Europe) has strict social security laws. Firms cannot fire a person if he/she takes a vacation for child care (men are encouraged to do that too!). The vacation lasts up to 2 years (IIRC). The time is paid for by the government, but you lose your highly-qualified and trained employee for 2 years.

Facts aside, I don't approve the author making such a big thing of it though it sometimes may be an issue (if you're hiring for a long project where replacing people is REALLY expensive).

In Spain you cannot fire a pregnant woman. It could be even illegal asking for it in a job interview... Recent laws allow the father taking the 50% of vacation for child care. In candidates lists -algo by law- there must be 50/50 men/women. So, definitely, Hungary is not representative from European Union.

In countries such as Canada or the US it is effectively illegal to ask any personal questions in a job interview (religion, age, social & family status, ideology). In Spain those kinds of things are the first questions a woman gets asked, and for most common jobs, children (present or future) in practice mean she won't get the job. I am not aware of any restrictions that discourage this practice or allow her to safely refuse to answer.

I know of at least one employer who privately boasts that when he needs to hire a woman, he will only hire a lesbian, to avoid this issue altogether.

> when he needs to hire a woman, he will only hire a lesbian, to avoid this issue altogether.

What a moron. Lesbians have children too. From my own anecdotal information on this, about in the same proportion as heterosexual women.

I don't think it is fair to call somebody a moron for being unfamiliar with a topic that has, in many countries, been "neither seen nor heard" until quite recently.

He is certainly incorrect, but a moron? No, he needs correcting, not insulting.

Not in all places of the world. In a lot of places they won't even admit publicly that they are lesbians...

It's illegal to hide your pregnancy from your employer. If you do so, you simply don't get compensated and expressly give the right to your employer to put the contract to an end.

In what country? You have no obligation in Sweden to tell anything about pregnancy or illness you may have.

As far as I know, in Spain the mother must disclose her pregnancy before 6 months.

And during the recruitment process, to the best of her knowledge.

Same in Switzerland.

But don't forget that in the Eu you pay less of your income for health - and a heath crisis wont lead to family poverty

Some one I know moved to the states (from the UK) working for citibank and was paying much more just for his health cover than he would for all the UK benefits.

Health crisis won't lead to family poverty? Is this true for all 27 member states? I've already pointed out that it isn't in Romania. What about the other East European members? Can anyone tell us?

There are degrees to this, bad health will cost you money and reduce your earning power in all the states. However if you fall in bad health in the northern states treatment will be paid for and dying as result of lack of health care is very rare.

You can buy your own high-deductible health-care plans in the US through most of the major providers (costco also has their own now).

It's not the best, but you won't go broke if you have any sort of health emergency.

Hrm. How good are they? I've read articles about people who have gone broke even though they had health insurance.

The title should be "why I don't give you a job without doing tax evasion".

In Romania it's about the same: the taxation for an employees is high and so is social security (pregnancy leave, difficulty firing, etc). But people don't complain as much because tax evasion is really high.

Of course, this is really annoying for me because if your customer is in the US they will not pay you behind the counter, they will do a wire payment or such, which goes straight into accounting and is taxed.

In this regard, tax evasion becomes unfair competition.

Also in Romania -

Some companies are preferring contractual work and abusing it, by putting clauses in the contract that employees cannot quit for the next 5 years. This works in the cases were employees need to travel a lot (for example) and in the contract it is stipulated that if you quit, you have to pay the costs of accommodations, food and "training" provided during the contract, which is not feasible for most people.

This IMHO, is equivalent to modern slavery. If you're not able to quit, you cannot complain, you cannot negotiate a higher salary and you are at your employer's mercy.

It's only fair if employers cannot fire people at will (without being sued to oblivion). "I can leave anytime I want but you cannot fire me" doesn't make sense.

(For the record I am for at-will quitting and firing)

Good luck at your next meeting with the firing squad!

I assume in any relationship both parties can abuse their position.

But, as an employer, I feel I am clearly at a disadvantage.

It's easy to put clauses in a contract, but it doesn't actually mean they could be enforced in a court of law, even in one as bad as Romania's.

Having seen the restrictions the local Labour Department (ITM) puts in place, including the kind of stuff you may add to a contract makes me doubt what you say is more than a scam. I have never seen such a contract nor do I know somebody in IT working under such conditions.

Even a non-compete clause is something that I cannot add to a contract because it's super-expensive. According to the law if I want a non-compete on an employee, I have to pay him at least 50% of his salary for the duration of the non-compete.

There are many restrictions in place because companies don't play by the rules either. Some things I've seen in practice: civilian collaboration contracts, which have far less restrictions than regular working contracts; collaboration contracts with authorized individuals (PFA); minimum wages declared, to escape taxes, the rest of the salary being paid illegally.

Also, I know of at least one instance in which the owner of a company asked his employees to sign their resignations, without a date added. He can fire anyone when he feels like it.

     I have never seen such a contract nor do I know 
     somebody in IT working under such conditions ...
IT is one of the very few privileged classes in Romania. People working in IT are blessed. It does happen a lot less in this field and usually the fraud committed is more subtle, but it does happen. I was talking about my godson btw, he's not working in IT, but he is a knowledge worker and he has 3 years of his contract left.

Also, asking for a return of "subsidies" is completely legal.

     Even a non-compete clause is something that I cannot 
     add to a contract because it's super-expensive.
IMHO, non-competes should be banned completely. And I'm glad that you are unable to add it to your contracts ;-)

This brings us back to my original comment where I said that generally companies do tax evasion in Romania and most "job creation" involves a certain degree of tax evasion. I guess the same happens in Hungary too.

About firing, it does seems fair to me: an employee can just quit at any time with no reason so a company should also be able to fire at any time.

They way I see it, asking for a return of "subsidies" should be regulated some more. But not outright banned since I can clearly see some situations where it would make sense.

I am able to add non-compete to a contract, it's just not worth it because the ex-employee will still be getting at least half a salary each month. I don't see why they should be banned.

On non-competes - because the potential for abuse far outweigh the benefits for employers. It is also a way to subvert the free-market rules.

In California non-competes are not valid, except for equity stakeholders. Silicon Valley is in California and clearly the lack of this privilege hasn't done much harm to businesses - quite the contrary, if the correlation with their success in the software industry says anything about it (the same argument could be made pro software patents, however software patents have only began to be seriously accepted / enforced recently - and I feel like Silicon Valley will see a decline because of it).

I don't think it's clear that you have the disadvantage.

As a boss, you have more influence over your employees' daily experience than possibly anything else in their life. The reverse just isn't true.

We are a 3 people company doing software and we all do teleworking. (We used to be 4 people in 3 cities, now we are just 3 in 2 cities.)

So, I don't see how much my position as an employer impacts my employee's daily experience. They are free to do what they please, they just have to perform some work on a laptop for 8 hours a day.

The disadvantages are many for a company, starting with the fact that you have to play by the rules that are enforced by various entities that usually can't wait to fine you.

Firing an employee is rather complicated [1] and you are not allowed to do time-limited contracts much. So, once you hire somebody you do it "for life".

In a small company I would say any employee influences about as much my life as I influence theirs. I had a guy quit on me out of the blue this year (got another offer) and it was a bit of a shock for my business -- I'm not certain there is anything I could do that would impact an employee that much except suddenly firing him, which is restricted as I've just said.

1. Actually they changed the law recently, it might have become less complicated, not sure...

You can put a lot of stuff into contracts that are unenforcable in court. E.g. you can't sign yourself into slavery.

Are you guys/girls based in Romania? Good to see some population from RO here on HN. I've got some fantastic developers in our office there.

Yeap, small company from Timisoara (http://www.josekibold.ro/ ).

Yes, I'm from Romania.

The author realizes that these 5 restrictions don't even apply in Silicon Valley, right?

1. I can fire you, if I want to.

California has at-will employment, but you sure can't fire someone based on gender or age anywhere in the United States—and he opens with his desire to do just that.

2. If VAT goes down to at least 20%, better yet 15%.

Sales tax alone is not 20%+$.01 anywhere in the Bay Area, but there are a surprising number of added taxes here and there—Healthy San Francisco, for example, or the California state gasoline taxes—that can make the surcharges on consumer goods add up to that level.

3. If the state takes away "only" 30% of your money.

Federal income tax + California state income tax + FICA significantly exceeds that for most people in the technology industry in Silicon Valley.

4. If higher income is not exponentially punished.

The US certainly does have a progressive income tax scheme.

5. If the states punishes corruption instead of decent companies.

No-bid contracts, anyone? The US is hardly free of corruption.

He's asking for a place that doesn't exist. Moreover, it's a place I wouldn't want to live in; I don't want to live in a place where it's legal to discriminate against minorities, in particular.

>California has at-will employment, but you sure can't fire someone based on gender or age anywhere in the United States—and he opens with his desire to do just that.

I don't think you understand his position at all. Trying to fire someone in Europe is often compared to adopting a child, lawyers will take cases against former employers on commission because the probability of winning the case is extremely high. There is no comparison when it comes to US at-will employment, for eg. you have to be able to prove that the employee you fired for coming drunk to work was really drunk, that you gave him written warnings, flowed the formal procedure etc. To be fair tough, employers often use employment agencies that exploit loopholes but it only serves to increase the cost of labor. The only ones benefiting from these laws are the public sector and government owned company employees (ironically even government owned companies resort to exploiting loopholes because even they can't operate under the regulation). And these are probably much higher percentage of workforce than in the US.

And the corruption he is talking about is tax evasion and gray market, that's a huge part of the economy in these countries.

Also, I'm thinking the "progressive tax" in the US kicks in at a much higher nominal amount then Hungary, and that it's disproportionate to the cost of living difference.

I'm from Hungary, and I never heard of anyone suing their employer after getting fired. I'm not saying it doesn't happen, but you have to realize that the US is super-litiguous, E.European countries in comparison are at the other end of the spectrum: it doesn't really occur to people here to sue after losing their jobs. It's just not part of the culture. Also, private individuals can't afford lawyers, and don't want to deal with them.


In much of the world people will complain to a government department if they are discriminated against, and expect the department to investigate impartially.

It is typically only in high-value cases (ie, C-level executives, sexual harassment cases where high levels of damages are expected etc) where people usually seek private representation.

(I'm from Australia, and this is the case here. In my state I'd use this procedure: http://www.eoc.sa.gov.au/eo-you/making-complaint)

Of course they do sue. There is the whole "Munkaügyi Bíróság" (Work Court or whatever) to deal with the zillion lawsuits against companies firing people. And I'm not saying it's wrong. I'm saying, more often than not, these regulations backfire, and harm those, whom they should protect. Goverments create an environment in which employer and employee see each others as enemies, literally. They promote this view. Here I experience public anger against companies, investors, banks, especially multinational companies, but even smaller companies, who look successful. "Workers" see companies as their enemies. This is plain wrong, and bad, and nobody benefits. Only the corrupt, inefficent, incompetent goverments.

Yes, you're right. My point was that Hungary is probably still better than say the United States, which is famous for being a very litigious nation. Unfortunately, I can't find number to back up my gut feeling.

As a neighboring Croatian I'm not 100% certain about Hungary but it seems very similar, so I think you need to chat with a few lawyers about this, the case about guy getting fired for coming to work drunk and then being rehired and the employer forced to pay the salaries in between because he couldn't prove his claim isn't made up :)

They sue with the help of unions. True, this doesn't apply for startups, though.

My wife was fired when she was pregnant, because she was pregnant - which is illegal here in Italy - and they were so kind as to write so in a letter (never underestimate human stupidity/arrogance). We're taking the case to court, and I can tell you that there is no "on commission" here in Italy (also forbidden by the law).

And I - sincerely - wish you all the best, and I hope you will win. I'm not against decent, and fair laws that protect women's rights to pregnancy. But it's a national issues. The state must cover the bill. When they try to get the bill payed by the employers, it backfires, and at the end of the game, HARMS women, who can't get enough good jobs.

Thanks :)

That's illegal through all the Europe and that's OK and how it should be. We are speaking however about possibility to fire person who harms company intentionally.

P.S. 3 years maternity leave in Hungary looks really bad IMHO.

3 years maternity leave in Hungary looks really bad IMHO.

On the other hand, it looks really good for the children. This is worth paying for.

So pay for it, instead of asking someone else to pay for it for you.

OK, I don't know about Italy so fair point "Europe" is too broad. But still you've confirmed his point about not wanting to hire women, especially if Italy is comparable in maternity leave. And don't tell me you aren't expecting to win this case.

As a matter of fact, businesses not wanting to hire women is a problem in Italy, even if guaranteed, paid (by a national "insurance" agency) maternity leave is just 5 months here (usually 2 months before birth, and 3 after).

5 months don't look as too much to me; this notwithstanding many businesses only hire young women if they sign a blank resignation letter (which of course is illegal too, but very difficult to prove). I agree it's a very complicated matter.

The best solution imho would be to have more state-subsidized childcare solutions (we have some, but much less than needed), which would make young mothers more productive for employers, but I understand that most free-market advocates wouldn't agree :)

PS Yes I expect to win the case, because my wife's former employer so patently broke the rules. But here in Italy justice is so slow (next month there will be the first hearing, 8 months after we sued) and compensations so little that very often employers get away with it. I decided to go to court more to defend a principle than for an economic reason.

Well the point is - what's wrong with firing them ? If it's easy to fire someone it's also easy to hire and if they want to and hire her back afterwards or arrange some acceptable maternity leave and things like being available on-phone or one two days a week two months after birth, etc. that would not be possible under the "protection laws". Is she any less skilled after delivery. You could also accept a different pay, etc. But the point is there is a cost to the employer and regulation just reduces market flexibility and creates situations where it's tougher for a women to get the job in the first place. And as far as I know you get benefits for child, especially in the first year, from government, I'm not sure what's the situation with that in Italy.

Benefits per child are very very low here, and many couples don't have children because if the woman loses her job, with the added expenses too, it will become very difficult to make ends meet. Also for this reason Italy has one of the lowest birth rate in the world (second only to Spain, if I recollect correctly).

With generous (eg like in France) benefits per child, or generous unemployment benefits for young mothers, I could agree with more flexibility. The problem is, benefits cost immediate money from the State while putting the burden on families and businesses only costs in the long run. Given our current debt, the choice is very limited...

I think fiscal burden as opposed to regulatory burden is much less costly to the economy and the inflexible job market creates structural problems and prevents innovation, but at this point - with the interest rates countries such as Italy have to pay - I don't see that happening.

I think the best thing countries in Europe could do is implement something like a negative income tax and kill all that regulation and special programs/taxes/bureaucracy but I haven't even heard anyone in Europe propose such a move.

I can assure you that there is a lot of talking about that. Right now, there is serious discussion here in Italy about taking away some job protection from those who have too much (usually older people) and give some more to those who have none at all, through some kinds of contracts (usually younger people).

I don't think that deregulation is always right, but it is when you have too much - and we do have too much regulation, too much discretionarily applied.

But that's just talking about labor restrictions, and it's standard political bickering, nothing revolutionary will come out of that, Europe is too populist for any real change to happen. What I'm talking about is restructuring the tax/welfare system with something like this : http://en.wikipedia.org/wiki/Negative_income_tax

Eliminate paper currency and only have digital transactions, force the banks to disclose accounts and transaction information to remove gray economy and use NIT scheme instead of all the special programs. That way everyone get's the same safety net when they are unemployed or poorly paid and you can have unregulated at-will employment because employees aren't forced to negotiate for bare minimum.

It's wrong if they fired her because she is pregnant (and about to take the maternity leave I presume). Its almost the equivalent of firing a male employee who accrued a lot of leaves (by not using any) and about to use them.

> but you sure can't fire someone based on gender or age anywhere in the United States—and he opens with his desire to do just that.

i think his desire was to be able to fire people who don't do their job or dont do it well

...or get pregnant.

It is a very grey area. Too much government regulation and how the hell can it be profitable to hire someone. Too little and individuals get borked if they get pregnant/sick/etc.

Personally I would sacrifice less pseudo stability for less regulation. I believe many problems start off with good intentions, especially when it comes to more regulation.

I think you guys didn't quite catch his point... he doesn't hate women and children, he hates that the state forces him to employ a person for 3-6 years! without working. I support maternity leave but that's ridiculous if true.

I don't know how it works exactly in Hungary, but I doubt that the woman on maternity leave would cost him much, if anything. He probably simply has the obligation to hire her back after the leave.

He explained that he'd have to hire another person in the meantime, and pay her accrued vacation time. Then potentially lay off the second worker.

In all fairness, the author just said that he would like to be able fire any worker, even if they were pregnant women/young moms or older folks, which instead have a special protection that would make it impossible even if they're not working well. [BTW, I personally agree with a special protection for pregnant women, but the costs should be on the State]

Isn't there a major anatomical part of the disappointing gender discrimation from this post that everyone is neglecting? Men have babies too, they may not carry them to term but they are undeniably a major part. Shouldn't the problem be considered that society forces women to be the ones to take responsibility over the child after it is born? Then companies use this to punish women because they may take a "vacation". How is caring for a child while your husband is allowed to choose what he does a vacation?

Rather an extension to your logical argument (not disagreeing or agreeing): Either men should take paternity leave to let the women work or then they should support the family financially.

More generally: Having children costs something, because it requires work input. Who pays for the children? The men, women, families, their employers, the state (=also people who don't have children)?

Paternity (as opposed to just maternity leave) is for me the solution to many problems. Here in Sweden this already exists (18 months to be shared between parents as chosen, with some extra for the person actually physically giving birth for time spent in hospital during pregnancy). There is even some debate about having to use 9 of the months for each parent.

Possibly a necessary means to end (if you believe in this kind of logic) but hopefully not an end in and of itself.

(Already got enough minus points for pointing out gender issues and advocating free education so may as well dig myself even deeper :) )

And the state passes that right along to the business / people through taxes.

This is exactly what I meant: That the cost should be distributed on all businesses/people and not just on those businesses which hire young women/potential mothers. This does more than pay itself with a higher participation of women in the workforce; it's just a distribution of risk without adverse selection as with mandatory car insurance.

The cost should not be distributed. The cost should go directly to the business that is employing these women. If a business employs anyone they hope to do so by creating more value then the value then is spent on the employee. Even if the cost could be distributed, it has little impact on the fact that when the women goes on leave she is taking some 'business knowledge' that will take time to replace. The ability to even determine the value lost is impossible except under very general assumptions.

Car insurance isn't compulsory in all states (assuming you are from the US, but most require it). In NH you simple have to prove the ability to provide personal responsibility. If the roads were private, then it should be up to the owner of the road whether or not insurance is required.

3. If the state takes away "only" 30% of your money.

Federal income tax + California state income tax + FICA significantly exceeds that for most people in the technology industry in Silicon Valley.

Does it add up to anywhere near the ~52% his graph says it is in Hungary? Or are we talking around 35% or so?

The solution to all such problems is as obvious as it is unlikely to happen. It's not "women get six years' vacation if they want it". It's not "at-will employment". It's complete freedom of contract in the context of secure, effective, and responsible government.

You and your employer come to an ex ante mutually beneficial agreement. A secure and effective government will enforce such a contract, unless it represents an egregious abuse by one of the parties. A responsible government will formulate a wise definition of egregious abuse.

Once you start to enumerate all unenforceable contracts, you will come to understand how far we are from this situation. And when you look at how insecure, ineffective, and irresponsible governments are, you'll see why we may never get there.

And this is, in large part, why startups work so much 'better' than larger companies.

Startup hires tend to be somewhat self-selecting, as the jobs tend to draw young males without families. The risk of the job makes it more appealing to those types, but the field is generally overrun by men, which is a topic that seems to come up every few months as well.

What that means is that the eco-system is better for lean startups. You don't have to have the 'buffer' budget over actual costs that corporations do. Large companies typically offer paid vacation, matching 401k, disability leave, maternity leave and all that jazz.

If you're working on a lean startup right now, ask yourself what would happen if your lead developer disappeared for three months.

This is one of the real disadvantages we face as a nation because, in large part, the people we outsource labor to don't have these protections.

I don't know if I buy it. Startups have plenty of benefits from being unbureaucratic, willingness to take risks, and small enough to pivot. I think that the fact that they pretty much only employ middle-class white men under 30 is a pretty significant brain-drain, though, as people with experience age out so quickly, people from other fields don't join, and there's a monoculture of viewpoints.

What? How exactly was he describing a non-lean company? Hell, he was angling his wife as a supplementary source of income, and his home as investment capitol!

I believe you misunderstand me. I never said that he wasn't a lean company.

I was comparing the average lean startup to the average large corporation. Neither made-up example was his company.

I do not understand. Is your comment even related to the article at all then? This whole article is about how startups don't work in Hungary, and you're talking about how this is evidence why startups are so much better?

I believe you're either taking my comments out of context or are predisposed to bias against it for some reason.

The point of the article is that employees are expensive. Certain types of employees are potentially more expensive than others. He wants to avoid hiring the low-risk people, but isn't allowed to. The self-selection of startups is... y'know what? I'm just repeating what I said originally.

The hardships encountered in Hungary are the same sorts of hardships that large companies have to put up with, to varying degree. That was the basis for my comparison.

If you don't get it, sorry. I honestly don't know how you read the article and read my post and don't know how they relate.

I think you're right; you don't understand. He's taking the arguments made in the sub as to why it's hard to start a business in Europe, and extending them to the inherent competitive advantage of startups over large corporations elsewhere. The fact that startups largely don't have to deal with the issues described in the sub, while large corporations do, contributes to this advantage.

I'm a woman running a small ISV in Croatia, and a mother too. I would never hire a woman either, for the same reasons. As a matter of fact I wold not hire anyone locally, I just opted for the "outsoucing" via VAs and such. The thing is that it's very hard to fire someone, and human workers cost too much.

Sort of "meta", but interesting: http://andorjakab.blog.hu/2012/01/03/hungary_not_funny_anymo...

That blogpost made me kind of like a celeb, a bloghero or something. Fact is, that single blogpost generated half a million pageviews, 91141 Facebook likes in a matter of days. It was covered on national television, I was "the blogger of the week" at the biggest local blog provider (blog.hu), a whole bunch of responses were written by big names in the trade.

Newmedia analysts were trying to figure out what made it such a big meme, out of the blue, from totally nothing, without any mainstream media promotion. People shared it like hell, on Facebook. Likes were rising by hunderds, by the second. Like this: 30145, F5, 30359 ...

What made it big should have been obvious- it hit a nerve. It rang true. He wasn't just ranting and making shit up.

The right-wing Hungarian government changed the law of work relations. This rant was part of the campaign to gather support for the initiatve. It represents a very popular opinion, but popular does not mean true. For your information:1. Is it almost impossible to get a job if you are over 35; 2. Several people over 55 were fired recently. There are horrible stories.

Just as an added fact, for those who don't know it, Hungary is currently ruled by an extreme right-wing party which is pretty much doing away with democracy.

Edit: The EU is considering if measures should be taken; I hope they will, and fast.

I hope Hungary will not get financial aid from IMF and ECB (if I remember correctly) or will make it extremely hard to get it. That will harm Hungary in short term but in long term it will be good for all the Europe. It will send very good signal for all other Europe countries where right-wing extremists do stupid things (especially Eastern Europe).

P.S. I'm from Eastern European country and I see some similarities with Hungary.

I would like even more the EU to have a direct way of dealing with this kind of situations, but for now I agree with you - that's the fastest way to pressure the Hungarian government.

The current Hungarian government is not extreme right-wing, but surely undemocratic. But they changed the work code in favour of Mr. Andor Jakab. There is a new mass movement against the government, based on the trade unions. A new democratic government would mean an unhappy Mr. Andor Jakab.

Right-wing label does not mean anything. The same's true for left-wing label.

Politics has more than one dimension, and we're not even sure which dimension is described by this left-right dychotomy.

Counterpoint to the idea in this article - I don't like the idea of at-will employment. I'll keep the political or ideological ranting off HN, but in short, I don't think that being able to fire any employee for any reason whatsoever is a good idea.

Interesting to hear how things are in other parts of the world, though.

EDIT: If you're downvoting, by the way, please leave a comment about why. I don't really care too much about the karma, but I'd love to hear why people disagree (and for the record, this comment is at -1 at the time I edit).

You can get this right now in many state university systems in the US if you want it. Especially in the case on non-exempt employees. Unless the employee does something criminal I would say it would takes a minimum of a year to fire someone but probably more, and with clever enough employees it can be nearly impossible. Because of seniority and the like it can be really hard to layoff a specific employee even when there are budget cuts that eliminate positions.

Here's the problem. Bad employees tend not to leave of their own free will, in my experience the worse they are the more this is true. However, really good employees tend to move on every few years as they grow into new opportunities. What this means is that every time you replace a good employee you roll the dice that you'll get a bad one. There is now one position that is likely locked in place with bad employee. Over time this leads to a lot of bad employees, which in turn lowers your retention rate of good employees.

Now there is a standard tactic to fight this (and this same tactic would work in your senario as well). Make the bad employee extremely uncomfortable. Within the rules of the system do everything you can to make work suck. This does work reasonably well. The problem? Terrible employees are immune to this. So if this tactic is abused you end up with only terrible employees.

So in short, without the ability to fire people easily you tend to go on a downward spiral of increasingly bad-mediocre employees.

It absolutely can, and as noted even if it works you still run into issues.

The overall problem is that in the end it becomes a game between bad employees and the management see how can play the rules against the other the best, which is a phenomenal waste of time and energy.

Improve your recruitment, hire good people. Take advantage of any probation period. In the UK this is generally 3 months, and can be extended. During this period employees are just 'at-will'.

In the UK it can be up to 11months and 3 weeks before the main employment laws kick in.

I like the idea of an employee being able to quit at a moment's notice, and that goes hand in hand with the ability of an employer to make the same choice.

To be honest I find the idea of paternalist employers rather revolting.

I actually agree with your point there - if the employee wants the privilege of being able to quit at a moment's notice, they should also be willing to give up their employment protection. However, if the employee is willing to give notice, then there should be equal protection for the employee.

It's possible to arrange such things contractually.

Right, but my opinion is that the protection option should be the default, with employee (and employer!) free to negotiate a mutually beneficial agreement.

In my mind, it's a matter of inertia - if "protected" is default, then if an employer wishes to have the ability to fire anyone at will, they need to offer concessions - whether it be a higher salary, or the ability to quit at will, or whatever.

However, if "not protected" is the default case, then it becomes far more difficult for an employee to obtain such protection, as it's not beneficial to the employer. And as such, barring anyone who can negotiate their own contract (the minority, generally), most people will remain unprotected. And I believe that to be a problem, for reasons I mentioned elsewhere in this comment thread.

In many jurisdictions it's not possible (i.e., not enforceable in court) to sign away your statutory rights. This protects those with less power/resources (employees).

Equal protection would be severance equal to the advance notice period.

"""I like the idea of an employee being able to quit at a moment's notice, and that goes hand in hand with the ability of an employer to make the same choice."""

Not even remotely the same.

Because those two, worker and employer do not even remotely share the same power...

Agree. In a startup or a small business, the employer is the weakest. He/She must pay a high enough salary to get a competent worker, must pay for training, must pay salary while the worker is employed even if the company is not making money, must be aware and comply with labour regulations or risk a fine...

The employee just has to show up and do a barely acceptable job to get a steady pay.

Except that when you have a small company like mine. I have 3 employees. If anyone leaves it will hurt me as much as if I fire them.

If you're downvoting, by the way, please leave a comment about why.

I think the comment is too political and lacks content. The Guidelines say: "Please avoid introducing classic flamewar topics unless you have something genuinely new to say about them." Although I don't wish to be a jerk, I also don't think the comment meets this criteria. So I downvoted it.

In reading comments, I try to upvote those written by people with special knowledge or insight, usually gleaned from particular experiences in the field or unusual reading / insight. I often downvote those that seem to lack such insight, or be random, or that don't have "something genuinely new to say," or that are too overtly political.

I'm not downvoting you because I disagree with you—I actually haven't given much thought to the issue of at-will employment versus government-mandated employment and so don't really have an opinion—but because of the lack of content in the comment.

Start a company. Hire some people. Run it for, say, ten years. Come back and review what you just said.

Mark Twain: Someone holding a cat by the tail learns something he can learn in no other way.

Hah, I'll freely admit that I'm not experienced with the "other end of the cat", as it were. But I do stand by my personal principles, even thought they might be inconvenient. And as I mention in my reply to InclinedPlane, I'm not saying that I'm completely opposed to the concept - but rather that at-will should be a contractual option, rather than a default.

I am simply saying, in a very simple way, that opinion on certain topics is only valid when it comes from the right perspective. This has nothing to do with personal principles or morality. It's business (and reality) 101.

BTW, I say this from the perspective of having lived on both sides of that equation. I've even done things like not taking home a paycheck during bad times in order to make payroll and keep people employed. Business isn't black-and-white and it is usually far harder than it looks from the outside.

Who has the "right" perspective, the employer or the employee? This is what contract negotiation is about. Both sides are right and both sides are wrong, and the contract is the compromise.

"""Start a company. Hire some people. Run it for, say, ten years. Come back and review what you just said."""

Even if he disagrees then, so what?

Company owners/directors vs employees is a 1:x ratio, where x can get to 100,000 and more.

The law should protect the general population (employees) more than the few directors.

And if you are worried about other companies having an unfair advantage make this mandatory in all states. And penalty-tax international goods imported from countries without something similar.

Else, you are competing with the lower common denominator, ie. with what people are willing to do in a poverty stricken country somewhere on the world, where even kids are allowed to be put to work, etc.

Which is unfair to both you and to them (because it makes it possible to perpetuate their relative misery as a "strategic advantage").

The counter argument isn't that directors should have more power at the expense of employees, it's that the harder it is to fire someone, the less likely a company is to take on employees they don't absolutely know they will need for a very long period. This slows down the entire economy severely which hurts employees much more than directors (harder to get a job in the first place, less options for switching jobs if you don't like your current). This feeds into the political system: When most people are in employments for life, and has never had to justify their own contributions and have no pressure to keep their skills up to date, they will not (broadly speaking) support politicians who will diminish their rights, leading to further entrenchment.

The current state of the Spanish economy, particularly the crippling high youth employment is the primary case study for this situation.

What if we replaced "employee" with mechanic? Would you be in favour of making it illegal for people to switch mechanics 'at-will'. Then you would have to prove that your mechanic was terrible before you could use someone else.

Wouldn't you consider a mechanic a contractor? And you should be able to end a contract with a contractor too (depending on the terms you signed together). An employer/employee relationship is (at least legally) a whole different kettle of fish.

The laws differentiating between a contractor/employee vary based on country, state, etc. But at the core they are the same thing. One party is providing compensation in exchange for a service.

People that oppose 'right to work' and 'at-will' employment tend to not understand this until you put them in the position of the party that is providing the compensation. Once they are forced to pay for a service they do not want/need/like they are less likely to support laws like the ones in the article.

Good point about services that you don't want/need/like but is an employee really providing a service? Isn't some onus of responsibility on an employer as the One in the position of power? I think employing someone should be a long term commitment that involves education to bring them up to a level that you consider good enough. Otherwise shouldn't you just outsource the work?

Employers typically impose must more stringent requirements than a typical contract. For example, I can have multiple car mechanics, but typically can't work multiple jobs, and have multiple on back up if one falls through.

A mechanic is a business selling its services. An employee is an individual. It's an apples-to-oranges comparison.

Mechanic is also an individual.

In Australia, you have to have a reason to fire someone, unless your company is small (<25 people?). That reason can be a great variety of things, but if they haven't done anything that you can pin on them as 'dismissably wrong', you can retrench their position instead. This is a way of saying "it's not you, it's us", but the catch is that you can't hire someone else to do that role for 6 months, ie: you're being held to your claim of 'downsizing'.

Why it isn't a good idea?

Well, in short:

1. Anti-discrimination laws still apply, even in at-will states in the USA, but all that means is that the employer has to state that they fired the employee for ANYTHING ELSE, even if it's actually for a discriminatory reason.

2. Being fired without cause means gives greater opportunity for employers to abuse their employees - and, considering the general principles of game theory, it WILL happen.

3. Notice vs. cause can be separate things, but many people nowadays don't have the ability to survive longer than a couple of weeks to a few months without a job, and being fired without any notice can literally ruin someone's life.

Again, this is only a personal view - I'm no economist, and I don't pretend to have all the answers. So, please take this with several grains of salt :)

A wrongful termination suit is not based solely on the employer's reason for termination. That would be silly. Business owners are advised to document infractions so when they fire someone, they have written evidence in case a suit is brought against them.

I do agree that it will shift more power to the employees and it might help them in certain situations. But if you make it more difficult to fire a person, a business takes on more risk and loses more money when they hire someone who isn't good. Businesses will become less willing to take on new employees.

... but many people nowadays don't have the ability to survive longer than a couple of weeks to a few months without a job, and being fired without any notice can literally ruin someone's life.

I don't find that a valid concern. If you don't have a cushion of at least 3 months (better, 6 months, ideally a year), then you're taking a big risk. You're living above or too close to your means.

Sure, there are exceptions. Not everyone is in complete control of their situation. But I've found that most people could be, if they really wanted to be. Instead they spend money on unnecessary stuff (often including families at or below the poverty line), or feel the need to "keep up with the Joneses". And sure, there's a whole psychology behind all this that makes it understandable, but the bottom line is that you're taking a huge risk with your financial health by behaving this way, and there will be strong consequences if you lose your job.

I'm absolutely not in favor of stronger protections. I want to be able to -- by default -- quit on the spot. I've never done it, and hope I never have to, but I want the option, as the default. If a company wants to fire me for reasons relating to my competency, then bad on me. If I'm not creating enough value for the company, because they want or need to go in a different business direction, then I don't want to be part of that organization, fulfilling a useless role. (And also bad on me for not getting myself into a position where I'm creating enough value.) If a company wants to fire me for a political or discriminatory reason, then I really don't want to work for them anyway. Life's too short for that crap. (Not saying that we shouldn't have protected classes and try to police discrimination, though.)

Admittedly, I'm at the "high end" as far as the workforce goes, as I'm sure many others here on HN are. My skills are in high demand, I'm good at what I do, and I'm able to live happily well below my means. So it's likely true that I don't "know how the other half lives". And frankly, I don't want first-hand experience. I want to keep my skills sharp and make myself valuable whenever and wherever I can. Maybe someday I'll find myself in a bad situation, but I have to believe that I'll have the skills and work ethic to keep myself on my feet.

Yet most people do, so it IS a valid concern.

I hope you don't find yourself in a bad spot. I made mistakes and now I can't quit my job - it'll be a learned lesson, I hope :)

Those are certainly valid concerns, though that does bring in a lot of grey area definitions for valid reasons to fire someone that are hard to define :(

Such as..?

If you don't have a good reason for firing someone, why should you fire them?

Because the labor market isn't perfectly liquid. Let's say a manager randomly decides that he's firing all the blond haired people in his company. Those people will be harmed. Even if perfectly competent at their jobs, they very well may not find another job right away. It may even be the case that an equivalent job doesn't exist nearby and the employee is SOL if forced to quit without planning. Furthermore, once the company fires all the blonde haired people and this becomes known, there will be cases where competing jobs can now offer less pay because it knows a competitor is no longer willing to hire blond haired people.

Now, you might say "the company that fires all the blond haired people will eventually die at the hands of a company that gains an advantage by accepting blond haired people." True, but it's a slow bleed, and that certainly doesn't help the blond haired people who were arbitrarily fired.

In case you're skeptical, all this and more can be observed in the case of US black people up until the civil rights era.

Why do you think being able to fire any employee for any reason is not a good idea?

Would be interested to hear your thoughts on competing individual rights inside a capitalist society. More specifically the company owners right to make a profit versus the employees right to make a salary. Interested to know your opinions on why the employers rights supersede those of the employee.

I think you're confusing "rights" and "freedom to persue".

Capitalism is about free trade and voluntary exchange (of whatever); "right to profit" and "right to salary" sound both horrible and rather anti-capitalistic.

Actually agree with you that maybe I shouldn't have gone for capitalism to get my point across. But then again aren't you confusing the concepts of "free market economy" and capitalism with the former just being one possible form of the latter. Another possible form being a "social market" which should allow for some kind of state intervention on a lot of the issues being raised here.

PS A genuine thank you for engaging in discussion as opposed to hit and run downvoting

Among other things: it puts your entire staff in a short-term thinking mode.

If I'm walking into work every day wondering if my door badge is going to work that day (one of the psychologically damaging aspects, IMO, of door badges -- I've had co-workers comment "well, I've still got a job" as they walk into the office) based on the capriciousness of a boss (some of whom are very capricious), well, I'm not going to be focusing particularly on the long-term elements of my position. In fact, I'm going to be spending a fair bit of time looking at alternatives and networking.

In ecology, the growth you get in an environment that's continuously disturbed and disrupted is best described as "weedy". There may be vegetation (and even some animal life), it's not going to be particularly productive. What you're getting is lifeforms that are selected for survival capacity, not, say, wood or food production, or even necessarily stability.

Nial Fergusson, though frequently not the best guide, does point this out in his Ascent of Money, noting that one of the requirements for successful and productive economic activity is stability. This applies equally to firms and individuals. Many of the structures we've adopted (debt, savings, finance, subsidized mortgages, various "golden handcuffs") exist either to buffer change or incentivise stability.

Kicking (or threatening to kick out) the legs from under someone isn't that.

Unfortunately, there's also been a lot of cargo-culting built around this: people in the U.S. who bought houses to ensure personal financial stability .... because buying houses is what financially stable do. Unfortunately, that's confounding cause and effect. You buy a house when you've got an assurance of lifetime (or at least long-term) employment, in part to help cement you with that employer. Similarly, establishing large lines of credit (or revolving debt): useful when you've got a reliable, if perhaps fluctuating, income stream to meet those debts.

Anti-discrimination measures, seniority rules, tenure, unions, labor review boards, and the like, all seek to change the power balance of the employer/employee relationship. Which, for any employer with n>1 employees, is greatly skewed in the employer's favor. While this may make for an economic climate which doesn't expand as quickly, it may also make for one that's more stable in a downside movement. Looking at economic growth between the US and established (e.g.: not modernizing, BRIC nations) economies, particularly in Europe and Japan, might be instructive (I haven't done the analysis). However northern Europe (particularly Scandinavian countries) have done quite well over the past 20 years or more.

If your landscape is rapidly shifting and/or doesn't sustain the level of existence you're trying to establish, you're going to want to move elsewhere (physically or figuratively), reduce your needs, or strengthen your foundations.

As to Mr. Andor's statements concerning his employment growth plans and policies:

1. He could move his business to a more hospitable environment.

2. He could find himself competing (successfully or otherwise) with those having different policies. This is "letting the market sort it out".

3. He could petition his government for changes in law and/or practice that better suit his business goals.

I'm not sympathetic to the arguments he provides, and suspect that he'll find that he's greatly limiting his enterprise's growth prospects by foregoing any possible payroll expansion.

Please see my response to kiba, below. I'll reiterate, though - it's a personal view, and I'm no economist, so please take it with several grains of salt :)

Consider this hypothetical: You don't like the idea of at-will employment. How do you feel about the idea of being able to quit your job at any time?

You're relying on your employer for an income, this is true, and thus being fired in a way you don't feel is justified seems unfair. Naturally.

Your employer is relying on you to do a job and has invested (lets say hypothetically) in your training, and thus you leaving arbitrarily (say you got a better job) seems unfair to them.

One solution to this would be employment contracts that require you to stay at the job and the job to remain open to you, for some period of time under certain conditions.

Would you accept giving up the right to leave arbitrarily in exchange for the employer giving up the right to fire you arbitrarily?

"How do you feel about the idea of being able to quit your job at any time?" - Very strange things are happening here. For example, if you become homeless, you can't exercise your freedom to be on the streets anymore. If you're on the streets, you are _fined_. If you can't pay up, you are prisoned. Now it's easier to see how unjust this is. You will feel less sympathy for a small business owner, who can't exercise his or her freedom to give a job to whoever he or she wants, until he or she wants on whatever terms they agree. But soon you may find yourself "protected" by the state in a very similar fashion, how our poor homeless people are now protected in Hungary.

Actually, this is the common case at least in Germany, and also in a bunch of other European companies. Employment contracts have a termination time that's usually 3 months; if the contract doesn't state anything it goes up even higher over time.

Of course, if both parties agree, it's a wash.

In Poland it works the same. For the first few years it's one month termination time both ways, then 3 months. But many people work on "junk contracts" that does not offer any such protection, and allow employer to pay less taxes (skiping social insurance etc).

We also have paternal vacations, but much shorter - 20 weeks to share between father and mother. And employers still complain that it's too much.

IANAL, but "at will" doesn't actually mean that a person can be fired for any reason, even without cause. That's something employers say to discourage lawsuits. It's not actually true.

"At will" means there's no contractual agreement and an employee can be terminated for documented performance issues or for business reasons (i.e. layoffs) without it being treated as a breach of contract.

In a contractual arrangement, for either party to walk away (even for business or performance reasons, unless stipulated) is a breach. In at-will employment, it's not a breach of contract. That's not the same thing as saying that people who are unjustly fired (e.g. pregnant women) have no recourse.

That said, it's usually not in a person's interest to pursue a wrongful termination lawsuit. It's much easier and less risky, in most cases, to get another job.


"At will" means there's no contractual agreement and an employee can be terminated for documented performance issues or for business reasons (i.e. layoffs) without it being treated as a breach of contract.

That's not true at all. You are misunderstanding contract law. An employer-employee relationship is a contractual relationship, even if not formally memoized in writing.

"At will" simply means that the length of the employment arrangement is not defined, and continues so long both parties agree it shall continue. If either party decides it should not continue, that party may end the arrangement (the employee by quitting, the employer by firing). An at-will employee can be fired for any reason, so long as it is not one of the prohibited discriminatory reasons (i.e., age, gender, etc.). There is no need for the employer to document the reasons for termination, though many due as a matter of course (usually, to defend against discrimination lawsuits).

That said, it's usually not in a person's interest to pursue a wrongful termination lawsuit. It's much easier and less risky, in most cases, to get another job.

LOL. If a person is fired for discriminatory reasons, it is definitely worth the effort to sue. In addition to salary for the period of reasonable unemployment, they are also entitled to punitive damages (usually 3x actual damages).

I know someone who got a six-figure settlement because he could establish that the process leading to his termination was atypical-- that he didn't have the same amount of time to improve performance and the same opportunities (i.e. transfer) as other people in the same circumstances. This wasn't a discrimination claim. He was white, male, and in his late 30s. IIRC there is language (at least in NY) covering people who are terminated and not given the same process as someone else. Companies aren't required to have a termination process, but if they have one and don't follow it, they can get in trouble, unless there was obvious cause to fire the person on the spot (i.e. he did something illegal or dangerous).

It could be that the firm was more worried about image than losing the lawsuit, but my point is that it's not that simple. You may not be able to get wrongful termination, but there are other claims. Example: you don't get along with your boss and (instead of getting fired) you try to transfer to another group. If this works, great. If it doesn't, because said boss said something negative about you to the manager of the group you're trying to transfer into, then he interfered with your relationships elsewhere in the company. Get him for harassment, IIED, et cetera.

LOL. If a person is fired for discriminatory reasons, it is definitely worth the effort to sue.

I said "usually", and I should have qualified that with "for most HN readers". If you're 55 and on the cusp of retirement, or if you're a member of a minority in an obvious discrimination case, it makes sense to sue. If you're a 25-year-old white guy in finance or technology, it's usually not worth it to risk your reputation, because lawsuits go into the public record.

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