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This is why I don't give you a job (andorjakab.blog.hu)
588 points by fourspace 1214 days ago | 529 comments



I can't believe how pro-government interventionist the views are here. Sure the guy's rant was over the top, but isn't this Economics 101? Arn't all the added costs the government puts on hiring workers perfectly reflected in the supply demand curve resolution?

You might not hear about it all that much because it isn't cool to blog about it, but doesn't it make sense that women make less money when, on average, it costs more to hire them?

This isn't about right or wrong, it's math.

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

Social responsibility for a business is to provide goods to the public through voluntary exchange while adhering to the non-aggression principle. Every other benefit should be provided by personal savings, family support, and voluntary donation. If you really want forced help to new mothers or other "disadvantaged" people then provide it by the state where the costs are transparent. The people hurt most by these policies are women who do not want to be mothers.

> But for society as a whole, these things are good. - henrikschroder

I disagree. These interventionist practices increase tension between subcultures. They turn the world into an "us" vs "them" environment, where it would be more optimal to have a "me" and "you" environment.

For example: Affirmative action. Many blacks that get into Harvard and graduate are treated as sub-students by employers like major banks. The reason is that by definition they have, on average, poorer standings when they enter university. A black person that truly deserved to get into Harvard is indistinguishable from one that got there only after the bump from affirmative action. Employers remembering their time at Harvard recall that the black people in there class, while smart, were not of the same caliber as the rest of the class on average.

Furthermore, since affirmative action shifts the whole bell curve to the right, blacks are disproportionally more likely to drop out of university, since they are likely the least academically qualified to be there. This creates further racism as over the years professors tend to note that the blacks they teach tend to drop out.

Another example: Social Security. While the baby boomers were all working they enjoyed some of the lowest rates around. Now forward projections show that the US is unable to meet its SS obligations. Again turning it into "us" vs "them" (Gen X/Y/Z vs Baby Boomers).

> 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. - henrikschroder

People make choices. My choice may be to work until I have enough money to where I can earn enough interest passively while I go to Africa and join Engineers without Borders. Or my choice might be to have children. Either way, my productivity, savings, and future goals need to be harmonized for my plans to come to fruition.

Most responsible, productive people find it very easy to return to the workforce. Sometimes they are a step down or two (as in the case of my mother, who was a former research manager at IBM before she had my brother and me) but if their skills haven't eroded, they quickly gain back, and even exceed their position (she's now fairly high up at AT&T managing the internet pipes between Asia and the Americas, as well as VPN services to huge companies like Siemens).

If the problem that right to return to work solves is post child rearing un/underemployment, and the solution is to stem from the government, then the government should set up organizations that empower employment seeking mothers, not coerce organizations to hire them again.

Furthermore, I've never met any business owner that didn't want to rehire a former staff member after they have had their maternity leave. The only time I've seen someone lean on that law was when they knew they were going to get fired (written up twice out of three times) so they had a child to reset the write-up policy.

> 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.

First off, most businesses do not want a workforce of men like me. Young, well-educated, male, lots of OT. We're too much like cowboys. We hate process. We hate meetings. We might be great at startups, but we are terrible in most other organizations, and yet most of us don't even know it.

As for the cost, "that is what the money is for" if it is citizens that want to be educated. Citizens that want to build roads. Citizens that want to have a safe and peaceful place to live and work. Citizens that want to buy products in an open market. Then those citizens will vote for those things. If you want to tax and impose rules on corporations then extend them the right to vote. No taxation without representation and all that (ironically, this is why governments are taken over by lobbyists, since the defense for having lobbyists was that the government makes rules that impact corporations and that corporations need "sway" in congress to protect their interests). Otherwise, recognize that the products that you use are brought by corporations to you, something most people forget.

> 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. - mtts

It depends on how it has been "spent". From the employer's perspective income tax should be none of his concern. If the citizens vote for a 50% income tax then that is what they should see on their payment stub.

> Being from Europe originally and having lived in Silicon Valley now for more than 10 years, I did the math on comparative taxes. In the end, it's a wash. If you take into account everything. I make more money in the US. But my retirement costs are higher. And by the time I put two kids through college (college is free in some European countries), it basically balances the extra cash I made over a 20-year career. - alain94040

I did the math from Ontario, Canada to Texas a couple years ago. Even with a 10k bump in pay and full benefits, it was a wash. America pays a lot of taxes.

> I propose a new law for Hungary saying that every company with more than 10 employees should have the same percentage of female/male as that of the population or in special cases (like with IT) that of the field at universities. This would stop some companies profiting from healthy 30 year old single men, and then throw them away like rags once they start feeling the pressure or want children. - hmottestad

That would be disastrous. Special cases governed by whom? Elected officials? There is about another 500 pages of laws. Logging towns, IT, Nurses, flight attendants, basketball players, elementary teachers, the list goes on and on.

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I'll take issue with a specific point: affirmative action. Affirmative action starts with a premise different from yours: that college admissions shouldn't be about past performance but about future potential. And if there's nothing genetically wrong with black people, then blacks should be demographically represented in colleges. If they're not, then there's something wrong with admissions.

"A black person that truly deserved to get into Harvard..." You come from the premise that you deserve to get into college based on your past performance. That's valid, but you should be making arguments against the premises of the affirmative action, then.

"Furthermore, since affirmative action shifts the whole bell curve to the right, blacks are disproportionally more likely to drop out of university, since they are likely the least academically qualified to be there. This creates further racism as over the years professors tend to note that the blacks they teach tend to drop out."

According to the guiding principles behind affirmative action, this isn't simply a consequence of the policy, but another injustice to be addressed. Blacks aren't genetically predisposed to dropping out, they just have very different social and cultural circumstances that aren't conducive to graduating. The things that you (I presume) and I (I'm Asian) take for granted, many black people cannot. A proponent of affirmative action would argue that we need more social college programs that help and encourage black students in ways that lead to better graduation rates.

"Many blacks that get into Harvard and graduate are treated as sub-students by employers like major banks."

This is simply prejudice on the part of employers. Why should employers take into account how someone got into Harvard, instead of judging them solely on their performance at Harvard?

My point is that you apparently don't fully understand the premises and reasoning behind affirmative action. Many who oppose it don't.

[Edit]: I suppose my meta-point here is that it's easy to take a hard-line view when you don't fully grapple with the opposing argument. When you really fully try to understand the other side, you come to a more nuanced position, and a respect for the complexity of issues. I think it's parallel to the Dunning-Kruger insight that you don't know what you don't know. Certainty is a sign of ignorance, even in yourself. If you are certain about something, it's time to re-examine your assumptions.

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Affirmative action starts with a premise different from yours: that college admissions shouldn't be about past performance but about future potential.

Why do you believe a black applicant has higher future potential than an equally or more qualified white applicant?

At university of michigan, blacks were given 20 extra points on the admission point system, equivalent to 1 full point of GPA. A black student with a 2.6 GPA would be more likely to be admitted than a white or asian student with a 3.5. Why do you believe that this hypothetical black student has more future potential than the white or asian student?

And if there's nothing genetically wrong with black people, then blacks should be demographically represented in colleges.

Ignoring for the moment that we have little good data on whether or not there are relevant genetic differences between blacks and non-blacks, why would there need to be something genetically wrong for blacks to be underrepresented? Why couldn't (for example) cultural factors cause blacks to be less likely to perform well in school?

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Why do you believe a black applicant has higher future potential than an equally or more qualified white applicant?

One of the premises of AA is that college admissions shouldn't be about qualifications, at least not entirely. The reasoning goes like this: If different races are not genetically different enough to account for large demographic differences, then college admissions should represent the races proportionally. Qualifications-based admissions do not, and this is because of systematic socio-economic/race/culture problems. To account for these systematic disadvantages, we should factor in racial information to normalize the different groups.

Why couldn't (for example) cultural factors cause blacks to be less likely to perform well in school?

That's part of the premise, too. That it's not genetics but many other reasons. But people should be given opportunities to realize their future potential regardless of their culture or the systematic oppression they might live under.

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I'm sorry, but you've still ducked the question. Why does a white/asian guy with a 3.5 GPA have a lower future potential than a black/hispanic guy with a 2.6 (all else held equal)?

Even if you assume that the statistical distribution of black GPAs is lower due to culture, it does not logically follow that the black guy has higher potential.

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> Why does a white/asian guy with a 3.5 GPA have a lower future potential than a black/hispanic guy with a 2.6 (all else held equal)

As far as I know, no one is arguing that he does. Additionally (and I could be wrong here as I don't know where to find the data), I suspect that that affirmative action is never responsible for a white/asian guy with a 3.5 GPA getting passed over for a black/hispanic guy with a 2.6 (all else equal). A more fair question would be:

"Why does a white/asian guy with a 1250 SAT have a lower future potential than a black/hispanic guy with a 1225 SAT (all else held equal)?"

...which is easier to answer. There is a marked difference in SAT scores among races, and a lot of debate about the cause amongst people who know a lot more about this stuff then myself (and given the wording of your comment, I expect yourself as well). At the very least, it's reasonable to suspect that there may be some racial bias in the wording of SAT questions.

Obviously, the issue of unequal opportunity amongst races is huge and complex, and I don't pretend to know how affective affirmative action is at addressing it. What I do know, though, is that it's not as cut-and-dry as you seem to be implying.

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As far as I know, no one is arguing that he does.

Scroll up. Joebadmo argued in defense of AA "...that college admissions shouldn't be about past performance but about future potential..."

I suspect that that affirmative action is never responsible for a white/asian guy with a 3.5 GPA getting passed over for a black/hispanic guy with a 2.6 (all else equal).

Your suspicion is wrong. This is exactly what U-Mich did. I'd love to provide more data, but colleges hate transparency, and U-Mich is the only college to reveal this (they were obligated due to a supreme court case).

http://web.archive.org/web/20080423221308/http://www.umich.e...

http://supreme.justia.com/us/539/244/case.html

Further, nationwide, in 2006, there were fewer than 976 black students who scored 700 on the math and verbal SAT. Yet somehow, the population of black students at top schools is considerably higher than 976. Make no mistake - AA is a lot bigger than a 25 point boost on SATs.

http://www.jbhe.com/features/53_SAT.html

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I stand corrected. Thanks for the data.

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"Why do you believe a black applicant has higher future potential than an equally or more qualified white applicant?"

Let's assume intelligence (and therefore, future potential) can be accurately represented by a number, which we'll call X. Now let's say the GPA of students is a mix of the quality of their education as well as their X number.

The assumption is, black students, who have the same X number as white students, will have lower GPAs, because the education they received is worse. This is due to systemic bias, cultural reasons, etc. Therefore, a black student who got a GPA of 2 is equivalent, in their X number, to a white student who got 3. That's why the GPA most be normalized.

Obviously, my argument rests on the belief that there is some inherent trait which defines intelligence, and therefore future potential, which is deeper than the GPA. This may or may not be true. It has a ring of truth to me, since smart people with worse educations will certainly have worse GPAs.

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If X is some value that best describes inherent affinity to learning, relevant to discipline you want to pursue, and Y is already amassed knowledge and skills, also relevant, then:

Your y prior to going to college/university is a derivative of x and any prejudice, your score on the test is a derivative of x and y and prejudice, your future potential is a derivative of x and y.

The interaction between all these is complicated, depends on how exactly we derive knowledge from intelligence and prejudice, scores from all above and future potential from knowledge and intelligence. It is different for different models of education, types of tests and disciplines. But in general it is most unwise to expect that 10% of any ethnic group has the same future potential, if only because tests show they are less or more educated already.

In general you cannot estimate if there should be more or less of a certain group if you do not carefully examine the nature of prior disparity. And this is impossible, and even more so when the problem gets politicized.

A side note - free market gets rid of the problem. We do not need a common stand on all the issues, when everyone only risks their own resources, and those who pick right, flourish.

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Asians are also a minority and have in the past faced extreme prejudice similar to Africans and yet are discriminated against by affirmative action in college admissions because their high gpa would normally cause them to be "over-represented". Affirmative action is quite silly.

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I've actually read and thought about these issues quite thoroughly. I've changed my position on a number of opinions, most notably would be the idea that no one should own land indefinitely.

That certainty is a sign of ignorance and therefore I am ignorant because I am certain is false because that argument is circularly invalid. This statement: "If you are certain about something, it's time to re-examine your assumptions." Seems pretty certain to me.

But I'll cede that I do struggle with the complexities. A couple months ago I wrote this: http://zachaysan.tumblr.com/post/11602694501/on-economics where I outline past beliefs and why economic policy is hard to study empirically. To me it fundamentally comes down to ethics.

However, I do fully grapple with the opposing arguments that are in favor of Affirmative Action. I just reject them. I understand their side, I've just been lead to believe it is suboptimal.

"[I]f there's nothing genetically wrong with black people, then blacks should be demographically represented in colleges. "

That sounds like you are projecting your way of western thinking onto a subculture you probably don't fully understand. Maybe blacks culturally value things that we don't, like exercise or leisure. I don't know and I don't care because to me it is racist to favor or disfavor one group based on race. Furthermore it is an affront to liberty to force another institution to commence a transaction they do not want to do (allow a substandard applicant to join).

"Why should employers take into account how someone got into Harvard, instead of judging them solely on their performance at Harvard?"

I'm not saying they should, I'm saying that they do. If the side effect of them doing so (if their rational ends up being right) is that they get higher preforming workers then they will grow and this system of discrimination will grow with them. If they are wrong, then their competitors are able to get black graduates cheaper, and, at the margin, grow faster.

Alan Greenspan only hired female economists because he was convinced that they were just as smart as men, and he could pay them less. Of course his firm ended up being wildly successful.

I'll end with saying that Canada does not have an Affirmative Action policy, And I saw absolutely no systemic intellectual difference between them and the rest of the school.

"The things that you (I presume) and I (I'm Asian) take for granted, many black people cannot." Thomas Sowell, a world class economist, the black son of a poor single mom agrees with me on Affirmative Action. I go with appeal to authority because it is my only defense against an Ad hominem.

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Thanks for the thoughtful response.

That certainty is a sign of ignorance and therefore I am ignorant because I am certain is false because that argument is circularly invalid. This statement: "If you are certain about something, it's time to re-examine your assumptions." Seems pretty certain to me.

Ha, I love the meta-cognitive logic judo! It's a fair point, but I hope the subtext of my entire meta-point is that I regard my opinions with little certainty. Even my defense of affirmative action as a policy is measured, because I think it's a very complex issue that I'm not an expert on. Maybe a better way to put it would've been: "When I'm certain about something, I find that it's generally time to re-examine my assumptions."

But again, what I take issue with is that your argument starts with the premise that college admissions should be about past performance.

However, I do fully grapple with the opposing arguments that are in favor of Affirmative Action. I just reject them. I understand their side, I've just been lead to believe it is suboptimal.

If you did, I missed it. AA is about equal opportunity. It's about providing opportunities to people who are circumstantially impoverished of them.

I don't know and I don't care because to me it is racist to favor or disfavor one group based on race.

From behind Rawls's veil of ignorance and with the premise that education leads to higher wages, one's race should have no bearing on whether they can get into college. If one race is systematically denied that opportunity, then it's racist to not address that systematic oppression.

Now there are plenty of premises there to argue with, but I didn't see you argue with any of them. You instead talked about certain consequences that you perceive from affirmative action that you find suboptimal. But suboptimal increase in tensions between sub-cultures is not something affirmative action was meant to address. Also:

If they are wrong, then their competitors are able to get black graduates cheaper, and, at the margin, grow faster.

It sounds like you're saying that companies that don't subscribe to us vs. them will then outperform companies that do, so it'll sort itself out.

So, what's the problem, then?

I apologize for resorting to ad hominem, I didn't mean to. The last thing I want is to start a flamewar. I should've phrased my response more carefully. The reason I brought up my meta-point is that I read a tone of certainty in your prose. I recognize both that that's subjective and that sometimes it's enlightening to stake a hard-line position and defend it vigorously.

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> This statement: "If you are certain about something, it's time to re-examine your assumptions." Seems pretty certain to me.

No, you're just perpetrating rhetorical nonsense like “intolerance of intolerance is intolerance (and therefore my intolerance is OK)”.

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>And if there's nothing genetically wrong with black people, then blacks should be demographically represented in colleges. If they're not, then there's something wrong with admissions.

Perhaps genetics and racism are not the only factors affecting demographic representation in colleges. See: Asians.

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> if there's nothing genetically wrong with black people, then blacks should be demographically represented in colleges. If they're not, then there's something wrong with admissions.

This is vague and not good reasoning. You say "nothing wrong with black people" (p) --> "demographically represented in colleges" (q). In your attempt at proof-by-contradiction, you notice that NOT(q) is true, which should imply NOT(p)--something is wrong with black people. We know that's not right either, so what's wrong here is the initial p-->q. So you set up a new p-->q with "there is nothing wrong with admissions" --> "blacks are admitted in a demographical proportion", note NOT(q) again and conclude that NOT(p) is true, that is, there must be something wrong with admissions. Whether one wants to accept this new p-->q is completely separate from the issue of something being wrong with black people. Outside of this logic, NOT(q) could be a sign of any number of things besides "there's a problem in admissions."

Of course, the reality is that there are several feedback loops, and the actual causality doesn't flow one way, so it's hard to reason about (1-bit logic is insufficient) and even hard to influence. One might go around starting with blacks were once thought of as genetically inferior which led to some aspects of their current culture, and now that the genetically-inferior problem is taken away, the bad aspects of some black culture are still there, and they in turn go on to feed the continuation of the culture as well as produce subpar students and other bad individuals who will then be noticed by well-off folks who will associate the race with bad people, not because of some thought that they think black people are genetically inferior, just that they've noticed a lot of bad black people--of course, this leads to effects that are barely different from those caused by people actually thinking black people are genetically inferior, so you have "racism" where "racists" can be backed by observation (limited or not) instead of prejudice which will continue to feed into parts of the loop. And forcing employers to hire substandard black workers is not sufficient to fix the problem in the cycle of substandard black workers being produced in the first place, which has many sources like black culture, "racists", its members being on average poor since no one wants to hire them and other reasons, and more. So you try to fix the poor problem, but you don't because it's not as easy as just making sure they can't be refused a job just on their race. So you get employers complaining about the ineffectual overhead, and you spawn a new type of racist who assumes all black people with jobs were put there instead of a more qualified white man due to affirmative action, and these new types of racists start feeding into the cycle too.

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Now that's a hornets nest.

AA does create a "new type of racist" (those that see a minority with access and wonder if that access only exists due to AA) that feeds into the cycle, as you say. But it also gives minorities better, more equitable access, which in turn increases the probability that the beneficiary of AA and that beneficiary's descendants, will have better, more equitable access via an improved socio-economic environment. AA is imperfect, but the alternative is shit.

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Yes, it's a nest, and it's a modeling problem. Few people really talk about inflow and outflow and flux-in-general, I think most just pick one particular issue and hammer at it until it goes their way. There's very little pro/con analysis among single issues, let alone pro/con analysis across the spectrum and over combinations of actions we might have the government do or not do. I'll charitably interpret your reply as saying that (clear AA benefits) - (clear AA harms) + (unforeseen AA plus/minus side-effects) > 0. I might even agree with that, but you've offered no argument for why that is since you likely think "It's obvious" and you've not done any exploration into the space of other possible side-effects or other ways of increasing black people's economic status. My problem isn't with the particular solutions people propose so much as it is with how these solutions get proposed and argued.

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I was glad to see your comment, this one and the previous. I basically agree with you. I can tell you that I have considered many of the inputs and outputs you listed, and perhaps others (do I have a formula with values assigned to each variable? of course not). Ultimately, I'm unconvinced there is a final model that can be applied to address all the issues. Therefore, in the interim while consideration is put into the details of such a possible (or impossible) model, action is necessary. My problem is with discrimination. If there are better alternatives to AA, I'd like to hear them. Unfortunately, nearly every one who argues against AA simply wants to eliminate it with nothing proposed as an alternative.

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> This is simply prejudice on the part of employers. Why should employers take into account how someone got into Harvard, instead of judging them solely on their performance at Harvard?

That's a good point for employers, where they can perhaps reasonably ask a new graduate for a copy of his transcript and see how well he actually did, but in a lot of cases someone evaluating a graduate does not have access to such details.

For instance, if I have to choose between two lawyers, or two doctors, and all I know is that they have degrees from the same school, and that one of them is in a group that was significantly under represented at that school before Affirmative Action and was not under represented afterwards, then it is, from a probabilistic point of view, in my interest to pick the one that was not from an Affirmative Action group.

Example: suppose a school has 1000 people in a given class. Before Affirmative action, the breakdown was 950 from group A and 50 from group B. Group B is 10% of the general population, so is under represented at this school. The school institutes an Affirmative Action program that lowers the standards for group B, so that they are able to change their class distribution to 900 A, 100 B.

If I later have to pick, say, a lawyer, and all I know is that they were both in that class, and one is an A and one is a B, if I pick an A then I get someone who I know met the original admission standards for the school. If I pick a B, there is a 50% chance he met those standards, and a 50% chance he was one of the ones who got in under the lower standard.

Without any other information, I'm clearly better off going with the A.

Note that this only applies to school where they lowered standards for group B to increase their numbers. There are other ways a school can try to get more B. Caltech, for instance, wants more females. Rather than lowering standards, they just try really hard to get any qualified women who apply to accept. They will send a representative to visit the woman and her family to pitch the benefits of Caltech, for instance, whereas if you are a man you'll only get that kind of treatment if you one of those once in a decade prodigies like a Peter Shor or an Arthur Rubin.

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I think implicit in your calculation here is that someone let in on AA grounds is inferior to someone who wasn't. But the premise of AA is the exact reverse, in fact. Saw two candidates A and B are born with equal amount of future potential: 100fp. Candidate B, for reasons of systematic circumstance, did not perform well before college. Without accounting for systematic circumstance, then, candidate C, who was born with only 90fp, will get admitted before B, even though his fp is higher.

It's not a matter of lowering standards, but normalizing them across racial lines.

A common data-based rebuttal to this is that minority/AA students tend to perform worse even in school than their non-AA counterparts. But that's a separate issue, and is pretty obviously going to be the case considering a lifetime of circumstance. The AA response to this is to promote programs that help AA students to overcome their past circumstances and perform to their full potential.

Your example of Caltech is great! That's a perfectly valid way to normalize demographics, I think, but it doesn't seem to exclude AA or even address the same issue. They seem perfectly complementary to me.

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A common data-based rebuttal to this is that...

What data would persuade you that future potential is not equal, if actual data on future (relative to the time of admission) performance does not?

I'm curious whether your beliefs are falsifiable.

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For instance, if I have to choose between two...doctors...

Just to give some hard numbers:

http://web.archive.org/web/20080801022539/http://www.aamc.or...

In terms of grades/mcats, black medical students are about 1 standard deviation below white/asian students. There is little good data on how this gap evolves as medical students become doctors.

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Without any other information, I'm clearly better off going with the A.

Firstly, your opinion that you are "clearly better off" is discrimination. The only information you have (per your design) is that 50% of group B performed lower when they were at a disadvantage (conversely, the other 50% of group B performed as well as group A even though that other 50% were also at a disadvantage - hence, more qualified than group A). Using your self imposed limit on available information, you would be better off selecting the candidate that belonged to group B (50% were effectively equivalent to group A as they performed lower when at disadvantage, and the other 50% were effectively superior to group A as they performed equally to group A even when at disadvantage). If you choose to ignore the existence of that disadvantage then you are correct - but that disadvantage exists.

Secondly, what is the real world example of lacking any further information about a candidate other than the group they belong to (i.e. their race)? And how is selection on that single point of information not inherently racist?

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That's still prejudice. Regardless of how they got in, both achieved the necessary grades to graduate. Look at those grades instead.

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Assuming the grading system measures values relevant to my interest. You talk about injustice like it was some inherent right of a man to be always perfectly well judged. Or is there a limit to it? How much effort are people morally bound to put into making sure their judgments are possibly pure?

Note, we do not talk about judgments in situations where you forcibly affect life of others. No, we talk of, more like, assesments. The assesment takes up enterpreneurs resources, and if the race or gender, or any other tidbit of relevant information, that was already public or got undisclosed by interested voluntarily, is taken into consideration, it only helps to make the recruitment process more efficient. Recruitment has it's product - a good employee on correct position. It also has costs - a HR's salary for example. You may call it prejudice or racism, but it's not the point. If a group of workers loses opportunites because of prejudice, then the group of employers that are prejudiced lose the very same opportunites. Karma. If however they are "prejudiced" and it turns out more efficient, then the only thing you can do about this, unreasonable to me, but suit yourself, is refuse to interact with companies that do not earn a label "no-prejudice" from some reliable third party. +-

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Being refused a job that you're qualified for affects someone's life very much. I don't know what you're trying to justify here.

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Every action we take affects lives of everyone around the globe, and it significantly affects lives of thousands, when You take into account that all society's visible pressure on your life is built upon small decisions of all people that form this society.

When i buy apple, i affect lives of all that stand ready to provide the apple to me. I affect lives of all that stand ready to provide me peaches, grapes, bananas. I affect the prices of all above and so i affect lives of all interested in buying any of the products.

One of the driving forces of market economy - competition - is because of third parties choosing either me or you, and thus affecting my life positively, and yours, conversely, negatively.

What's the problem with prejudice? We are all prejudiced in million ways. That is the essential of being efficient in achieving our goals. We make decisions based on optimal amount of knowledge and information, not more or less. When You are in a hurry in the morning, in winter, You take warm clothes, rather than checking the temperature prospects for all locations you are going to be this day. Why so much prejudice against light clothes, it just might be a warm day! Do You know exactly why is it going to be cold? No, but you reasonably expect it. That is what a prejudice can be - a reasonable, with amount of knowledge and information you posses, expectation.

So when not to be prejudiced? Well, one certainly ought not to be prejudiced when it's unreasonable. If one could really benefit, long-term, from getting information, he ought to do just that. It's reasonable to know some about things that affect your actions.

One then should not be prejudiced when it comes to other human beings, because it does not cost much to get information, and altough it does not much good to yourself, if you don't care, but it can be very important for people around you if you are not prejudiced against them, but get to know them before passing judgements.

But can we force people to first or second one? Not on my watch - unnecessary force is worse than unreasonable, yet peaceful, actions. The only situation when one MUST not be prejudiced is - when you use force. When you are a policeman, a judge, a tax collector. These people should only treat people different based upon difference in their actions, not any kind of traits that are only correlated.

Now back to the point. When I do nto give You a job, i do not affect your life forcible. Assuming you accept private property rights in their basic form, my business is mine, and as long as i keep it away from hypothetical Mr.X's life, it's only him that affect forcibly my life, when he gets a job I did not want to give him. It's actually a hidden ongoing robbery.

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I have to admit it, you're pretty good. Saying racism is an "assessment", comparing it to chosing clothes and then actually accusing them of "robbery"... masterful!

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> college admissions shouldn't be about past performance but about future potential

These two variables are highly correlated. Do you think adding a fudge factor for students from disadvantaged groups will give you a more accurate predictor of future potential than just looking at past performance? Is there any data to support that claim?

> Why should employers take into account how someone got into Harvard, instead of judging them solely on their performance at Harvard?

Judging them solely on their performance at Harvard should still lead you to the conclusion that AA students are worse performers on average. That's true even in the hypothetical world where AA students don't come from a disadvantaged group in the first place. If blue weasels and red weasels have exactly the same distribution of skill, and you add affirmative action in favor of blue weasels, then blue weasel students post-admission will underperform their red weasel peers on average, for reasons that seem mathematically obvious.

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How will someone have an equal chance of succeeding in college if they have experienced a substandard education for the preceeding 13 years?

Affirmative action in college admissions is little more than tokenism. A way to cover up for the disparities in the quality in K-12 education, to pretend socioeconomic differences have no impact on college preparedness, and to white wash the fact that increasingly a high school diploma is no guarantee of a certain level of mastery of mathematics, literacy, etc. In short tweaking college admissions rates based on race is about the least effective way to try to fix problems in educational disparity or even to fix problems of race bias in college admissions.

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Hm. I'm not sure why you would assume that AA tries to address or single-handedly solve the problem of primary education. It's aimed specifically at the problem of admissions. Other programs should and do target primary education at large, as well as the problem of minority students' performance in college. Arguing that AA doesn't fix all the problems of race and education is a straw man argument.

the least effective way...to fix problems of race bias in college admissions.

What are the more effective ways?

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> What are the more effective ways?

Eliminate everything to do with race from college admissions. When I applied, I never met with any admissions in person. The only reason any school I applied to would know my race would be from the question on their application.

Affirmative action is inherently a cause of racial bias (decisions are made based on the color of ones skin). If AA didn't exist, skewed numbers for college admissions would merely be an effect of other, real problems. You don't fix ethnic disparities by introducing more racial bias.

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Eliminate everything to do with race from college admissions.

A relatively simple way of determining race with a high degree of probability is through a person's name (1). Next would be a person's location. After that, a person's primary school location. Or any lists of a person's interests/extracurricular activities. You cannot eliminate determination of race in college admission (or nearly any other application process).

Affirmative action is inherently a cause of racial bias (decisions are made based on the color of ones skin).

Yes, that's right. And on the other side there already exists racial bias. The analogy is steering a car, when you have a car that pulls to the right, you counter steer it to the left in order to go straight. In a car you can eventually address the root cause of the steering issue by taking it to a mechanic (assuming you drive straight to get there!). There is no mechanic to solve the root cause of racism - you can only address the symptoms and promote awareness. With no other alternatives to address racism in the application review process, the only solution is to apply equal and opposite bias to address the symptom of inequality. AA is specifically intended to discriminate against non-minorities in order to counter balance the discrimination that already exists against minorities.

(1) http://www.chicagobooth.edu/capideas/spring03/racialbias.htm... The authors find that applicants with white-sounding names are 50 percent more likely to get called for an initial interview than applicants with African-American-sounding names. Applicants with white names need to send about 10 resumes to get one callback, whereas applicants with African-American names need to send about 15 resumes to achieve the same result.

In addition, race greatly affects how much applicants benefit from having more experience and credentials. White job applicants with higher-quality resumes received 30 percent more callbacks than whites with lower-quality resumes. Having a higher-quality resume has a much smaller impact on African-American applicants, who experienced only 9 percent more callbacks for the same improvement in their credentials. This disparity suggests that in the current state of the labor market, African-Americans may not have strong individual incentives to build better resumes.

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You cannot eliminate determination of race in college admission (or nearly any other application process).

Sure you can. Just don't show the admissions committee real names, inform the committee only of a school ranking (not the specific school), and blank out specific extracurriculars that give away racial information.

Even better, you can just use a point system where everything is objectively measured. Strangely, many colleges dropped point systems after the supreme court ruled you cannot racially bias a point system (but you are allowed to racially bias a non-point system).

AA is specifically intended to discriminate against non-minorities in order to counter balance the discrimination that already exists against minorities.

If this were the true intent, you would expect that the college grades of AA beneficiaries and normal students would be similarly distributed. Do you believe this to be the case?

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If this were the true intent, you would expect that the college grades of AA beneficiaries and normal students would be similarly distributed.

As a natural result of AA or as an AA policy? The existing discrimination is with access/opportunity. The intent of AA is to counter balance access/opportunity discrimination. Over (much) time, results of counter balanced access/opportunity will equalize and AA will become less essential. The goal is equality of opportunity, not equality of outcome.

Perhaps college admission practices might be limited to a point system, but then you ignore the bias that exists in primary school. A point system itself is discriminatory against minorities. AA counter balances that.

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The net result of a biased filter is that the victims of the bias must perform at a higher level to pass through the filter.

I.e., suppose the filter were set to exclude students of quality Q < 10, but were biased against black students to the tune of 2 points. Then we'd expect non-black students to have a quality distribution bounded below by 10, and black students to have a quality distribution bounded below by 12.

If we gave black students a bonus of 2 points, their quality distribution would again be bounded below by 10.

Of course, if our original filter was unbiased, then we expect the quality of black students to drop to 8. What do we see in the real world?

A point system itself is discriminatory against minorities.

By definition, a point system which ignores race cannot be discriminatory. It literally lacks the ability to discriminate.

    admitStudent :: Student -> Boolean
    admitStudent student = -- code does not refer to student.race
                           ...
If you disagree, you should be able to provide a pure function for which this test fails:

    admitStudent ( student { race = Asian}) == admitStudent (student {race = Black})
(In Haskell, x { a=b} takes a record x, makes a copy, and sets field a equal to b.)

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Are you suggesting that blacks have a higher rate of dropout due to AA enabling Q=8 blacks into schools? Firstly, your premise is flawed because if prior to AA only Q=12 blacks were admitted to schools, you would expect a higher rate of dropouts if Q=10 blacks are admitted - assuming we exclude a host of other significant factors for the purposes of analyzing your over-simplified algorithm. Secondly, your premise is flawed because graduation rates for blacks have been steadily increasing for decades. From 28% in 1990 for black males to 35% in 2006 and 34% in 1990 for black females to 45% in 2006 [1]. Harvard itself has an overall graduation rate of 98%, and a black graduation rate of 95% - hardly disparate.

Regarding your second point: A point system can, and is, absolutely discriminatory. The points come from somewhere. In this case, lower level education results. The only way a point system admission policy would not be discriminatory is if low level education results were not derived based on racial bias. Unfortunately, they are. Low level education will pre-select non-minorities for higher points values. So a point system college admission policy may be devoid of intentional bias, but only because it ignores the established bias of the pre-selected point values it receives as input. That in itself is therefore bias (and now that you know it, well, it would be intentional).

[1] http://www.jbhe.com/features/50_blackstudent_gradrates.html

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Are you suggesting that blacks have a higher rate of dropout due to AA enabling Q=8 blacks into schools?

Dropout rates are dependent on a lot of factors, including financial aid and similar things. College GPA is a much better measure.

In terms of college GPA, if the admission system is biased in favor of a group, then the GPA of that group should be below average. If the admission system is biased against some group, then their GPA should be higher.

If AA nullified existing bias, then the GPA of black students should be more or less the same as the GPA of white students. Is this the case?

The only way a point system admission policy would not be discriminatory is if low level education results were not derived based on racial bias.

If true, this suggests that there should be a gap between low level education results and standardized test scores (which are immune to racial bias, since the scantron doesn't know the race of the person filling in the bubbles). Does this gap exist?

I.e., do black students have systematically low GPAs, but SAT scores comparable to whites/asians?

Similarly, if you want to minimize racial bias in the system, you should favor standardizing testing standards as much as possible - i.e., focus more on SAT and AP, less on GPA. Do you favor this?

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Dropout rates are dependent on a lot of factors, including financial aid and similar things. College GPA is a much better measure.

GPA is dependent on a lot of factors, including teacher bias, prior experience with instructional learning and similar things. Dropout rates are a much better measure.

If true, this suggests that there should be a gap between low level education results and standardized test scores (which are immune to racial bias, since the scantron doesn't know the race of the person filling in the bubbles).

It suggests no such thing. It would only suggest that if you believed every child taking a scantron test had received equal levels of prior education.

The fundamental flaw with your logic is that you believe incorrectly that everyone has equal opportunity at some point and you've decided to base all of your calculations off of this mythical point in time that everyone has equal opportunity and therefore any deviations from averages is a sign of actual inferiority in the capacity to take the average advantage of that equal opportunity. The reality is that no one ever has equal opportunity - from the moment of birth on. Black children are often born into a far more disadvantaged environment than white children. To overcome that disadvantage and succeed takes considerably greater amounts of effort, if not innate intelligence in some percentage of cases, to equal the success levels of those white children born to environment lacking that disadvantage. Everything prior to college admissions was not equal opportunity, everything prior to a scantron test was not equal opportunity. Equality of opportunity is not normalized after a scantron test, it is not normalized after college admissions and it does not normalize through college and post college.

Two people are sitting down. One has a 50 lb weight tied to his arms. Everything else being equal, which of those two will need to expend a greater amount of work effort to stand up? Does the fact that the individual with the weight took 25% longer to stand up mean he is less capable than the one with no weight? If they both took that same amount of time to stand up, which one would be more capable?

AA doesn't cut the weights off - nothing can do that. But it is a method of recognizing that those weights are there and accounting for them to some degree.

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Black children are often born into a far more disadvantaged environment than white children.

If that were the case, you'd try to measure disadvantage. Lots of information is already available to admissions counselors - family income, what schools were attended, etc.

In reality, AA benefits primarily upper middle class black children. AA is not about disadvantaged backgrounds and it's disingenuous to pretend it is.

Equality of opportunity is not normalized after a scantron test...

You previously discussed discrimination. I pointed out that a scantron can't discriminate. Now you are moving the goalposts.

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I pointed out that a scantron can't discriminate. Now you are moving the goalposts.

A scantron cannot produce an equalized result because everything leading up to the test was already unequal.

I'm not moving the goal post - I'm simply pointing out that every goal post you set up (first it was college admissions, then it was scantron tests) is not arrived at from a position of equal opportunity. The "goal post" is prior to birth - every one has equal opportunity at that point, of course no one gets to choose to whom they're born. Once born, there is no more equality of opportunity.

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> You cannot eliminate determination of race in college admission

In many countries university admissions rely only on standardized test scores. Name, location and previous education don't matter.

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Not in the United States, which is the country I assume OP was talking about.

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Affirmative action is idiotic, likely from the start. It seems entirely wrong applied to most every situation. For example, would it make sense to force restaurants to always have a demographically aligned percentage of black patrons at any given moment? How about local little-league baseball teams? school clubs? technology events?

> "discriminate against ... in order to counter balance the discrimination" Doesn't that sound like a bad idea?

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A friend of mine, when filling out the paperwork for joining the army, listed as his race "North American Indian." He's a caucasian with a dark complexion, and he figured (rightfully so) that being misrepresented as a minority might be helpful in the future. Years later after he finished his Masters program I wonder if he got into the university because of affirmative action. In fact he might have taken the slot of a qualified black student. That would be something.

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How will someone have an equal chance of succeeding in college if they have experienced a substandard education for the preceeding 13 years?

Affirmative action in college admissions is little more than tokenism. A way to cover up for the disparities in quality in K-12 education, to pretend socioeconomic differences dont aff

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I find it hilarious when people state their partisan opinions as fact, and then sound surprised that some people believe otherwise. This is why every policy article turns into a flame-war.

Pro-government interventionist? You really mean the liberal democrat view. You shift closer on the pole to the conservative republican viewpoint. Simple as that. Lets not act as if either viewpoint is math here, and not just a set of ideas.

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Conservative Republicans are often in favor of government assistance to mothers because they want to encourage families. Conservative Republicans are in favor of wars without end, of a restrictive policy against drugs, of restrictive policies against the internet and are generally against the protection of the environment. They are for indefinite property ownership, even if we end up living to be 500 years old. They are against immigration. For the death penalty. For standing armies. For conscription in times of war. For a strong national government. For copyrighting a number. Against free use of encryption. For clandestine intelligence operations.

I'm none of those things. I'm a geolibertarian.

The math part of it was the resolution in the supply demand curve when government intervention increases the burdens on commerce, not whether or not the government should provide services to new mothers.

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I didn't want to assume you were a republican, I just noticed that your views are skewed closer to the conservative right. Sorry for the confusion.

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Yeah, pro-government interventionist is a pretty hilarious phrasing. Let's talk in comical absolutes, that's guaranteed to generate insightful discussion.

What's anti-government interventionist? You don't believe in having police to intervene if you're getting your ass beat? Don't believe in courts to intervene in contract disputes? Man, I am so right I can barely stand it.

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"What's anti-government interventionist?"

Some flavors of crypto-anarchism. For instance, I believe that with the development of certain technologies the approval of the general population will be irrelevant.

To be fair though, things that I would consider "anti-government interventionist" are quite rare and almost without exception theoretical.

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How would you phrase it? Call them liberal? Socialist? Conservative? Populist? Corporatist?

It is phrased that way on purpose because most political leanings favor government intervention between individuals where neither party is committing force or fraud.

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I'd talk in specifics instead of loaded terms and comical straw-men.

In the linked article, I'd have a problem with the length of that maternity leave, 3 years seems excessive. I generally think the US system of "you can be fired for anything besides discrimination" is the right system for knowledge-worker jobs. I've got a lot less of a problem with the idea of taxes in general, since stuff costs money, and am unabashedly in favor of government-provided healthcare on a dollars and cents basis: Every other developed nation delivers healthcare more cheaply than the US's system, no matter how messed up their national healthcare system is. I'd much prefer paying X additional dollars in taxes if the alternative is 2X additional dollars in healthcare premiums.

EDIT: Sigh, apparently my support for a shorter maternity leave term than 3 years angered an anti-government-interventionist.

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I'm going to actually add on to this and zoom out a bit and explain why "pro/anti government intervention" is a silly distinction.

You already conceded that government intervention is necessary in the form of a police force and a tort system. Let me throw a few more at you:

* Roads?

* Should it be legal to build a giant transmitter to jam my competitor radio station's signal? No? Ok, you're in favor of the FCC in some form).

* National defense?

* Regulations prohibiting me from selling a bunch of rat poison labelled as "Tylenol"? If you're in favor of that regulation, then welcome to the FDA in some form.

* Public schools and/or a voucher system to pay for private schooling?

It turns out that if we look at preceding items in terms of a sheer "NO GOVERNMENT INTERVENTION" dividing line, you're probably in favor of government intervention in all of them. It's just a question of quibbling over the details.

That's why I think "pro government intervention" is a silly way to look at any situation.

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" Roads?"*

This particular item has always bugged me. Why is it that this particular type of construction project is so often considered to be something we need a government for? It's like planting flowers in your garden with an excavator.

My theory is the attitude is largely historic. The Romans excelled at road building, but the manpower needed at the time to pull of projects of that scale was only available to governments.

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How would you propose funding the building of roads, though?

The problem, as I see it, is that road funding is particularly prone to monopolistic abuse - if you're the only one collecting tolls in a certain area, you could literally charge whatever you wanted, without any possibility that a competitor could undercut you because the realities of 2-dimensional geometry prohibit them from building competing roads.

I'm not saying that there's necessarily no way to manage this, but this is the obvious complaint that most people in favor of public roads see, and I've never heard a compelling argument as to why the road-owners wouldn't charge excessive fees for transit in the absence of some top-down regulation preventing them from doing so.

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Subscription perhaps. That's basically what we do now, except I cannot unsubscribe from roads while buying a subscription to trains. (I can buy a subscription to trains (monthly pass), though my mandatory subscription to everything else partially subsidizes my train subscription too...). And I can certainly lose my subscription to roads (lose my "license"), although I still have to pay for it.

Bear in mind I'm not necessarily suggesting the privatization of roads. I just don't like roads being done by the same organization (or a sub-organization) as the one that does bombs and hospitals.

Some things make some sense to combine, such as "traffic policing" and "roads". Traffic police are after all the way you make sure people without a subscription to roads don't use the service. For the most part however, the various services a modern government is said to be required for have very little to do with each other.

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What do you propose instead? Charges to be collected at every crossing?

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Why not have a completely independent organization responsible for building roads?

They would be a "government" except they wouldn't involve themselves in the slightest in offtopic subjects like defense, healthcare, education, etc. In other words, not a government at all as we commonly think of it.

The importance of completely separating the organizational structures should not be underestimated. If you did so, you would no longer have the people in charge of building roads being picked by their stance on Iran or abortion...

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No. Every meter. RFID perhaps; EU tried to experiment with GPS too. As far as i recall, too no avail tough.

There are things in economy called "public goods". Long story short, as soon as owners can collect toll efficiently, the roads will cease to be one. The government will hold on to that tough.

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Any place a libertarian supposes just government intervention it is to allow coercion-free individuals life, liberty, and property.

Roads: In general, I prefer privatized roads, like the 407 near where I live. If roads are to be built they should be financed by individuals, corporations, counties, townships, and regions. Ideally these would be funded by donations. Social pressure could be used (ie, a Google map of every house that didn't pay its share of the cost) to expose to the community who the cheapskates are, but tolls at city entrances are fine too. I could talk all day about an ideal libertarian state with contracts being enforced everywhere, but for practical purposes this is a non-issue once brought down to the township and one of the last things that would be worth privatizing. Take the example of an enemy of yours buying up all the land around you and stopping your freedom of movement, do you not have right of way to leave? The way these things should be paid for if they are to be done by the government is through the rent of land from the government. No one created land. No one can morally claim first ownership of it.

Radio: Radio should be treated like property. Rented from the state, just as land should be. People have the right only to jam the radio signals within their own airspace, no further. The state has the right to enforce destruction of property.

National Defense: No standing armies. Lots of nukes paid for through the rent of land. Make it a impossible for another nation to attack you. When all you have is nukes the whole world knows how you will respond to an attack. Voluntary organized (by the government) army and navy reserves for responding to national disasters and enforcing national waters.

Rat Poison => Tylenol: Fraud. Murder. The problem with the FDA is the "F" and the whole idea that they can stop a fully informed adult from taking a drug because it doesn't have their stamp on it. This could also be done through organizations like Consumer Reports. Quibble: Do people sell street hot dogs with rat poison in them? No. People are generally good and we don't need to assume Rat Poison is behind every Tylenol bottle. We would save more lives by subsidizing vegetables (which granted, I'm also against).

Public Schools/Voucher: Ideally donations and paid for by the parents. The whole system needs to be reworked. Why can't I teach math to highschool kids? Oh right. The government says that, regardless of whether or not I'm teaching at a public school, I need to have a teaching certificate. That's a problem. Schools are prisons that only server the bottom 90th to 70th percentile until at least grade 10. But again, this, if done through tax, should be local _only_. No child left behind is a terrible program and a perfect example of letting cities and states be the deciders of education.

When I say pro-government interventionists I (generally) mean the government interfering with mutual exchanges between consenting adults absent force or fraud.

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Surely if the roads are funded by townships or regions it's no different to the current system (i.e. it would need to be funded from some kind of regional tax, rather than a federal or statewide tax as it is now). I think roads are often used because they're a good example of something which seems to be a natural monopoly, where many people find a libertarian treatment lacking.

I'm skeptical about the viability of a donation system for anything, but as it's never been done in practice, it's hard to have much meaningful discussion about it. It's worth noting that even Friedman thinks the government should fund education (and believes in some form of accreditation at least for teachers) (http://www.schoolchoices.org/roo/fried1.htm)

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> … but isn't this Economics 101?

The problem, in my opinion, is that this is only Economics 101. During the last 50 years or so, economists found quite a lot of exceptions from the rules taught in this class.

What I find puzzling is that many American libertarians seem to be so intellectually lazy when it comes to Economics 102 if you can call it so. You may want to read "How markets fail" by John Cassidy to get an overview over the topic.

Here's a review by Business Week: http://www.businessweek.com/magazine/content/09_47/b41560797...

> This isn't about right or wrong, it's math.

You may want to read Hume, again. "Is" cannot justify "ought". Given an "ought", though, economic theory tells us that we (as a society) will be willing to bear the economic costs for a particular policy based on ethical considerations.

Material wealth is not the only thing worth having.

> They turn the world into an "us" vs "them" environment, where it would be more optimal to have a "me" and "you" environment.

Yes, it would be nice to have an 'me' vs. 'you' environment, but that's not going to happen under any law. Read up on a good book on social psychology: It will always be 'us' vs. 'them'. Men and women, for instance, have opposite preferences when it comes to mating. Young women will always have different preference to old women when it comes to finding a mate. Young men will always have different preference to old men when it comes to distribution of wealth. And these are just the preferences inspired by sex.

What would you do when all the roads around your house are owned by old men who double the prices for usage because they can?

How much liberty will you have, then?

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Those who add value, have nothing to fear. Anyone below average or anyone insecure about her value, wants socialism and unions.

The society-first groupthink belongs in the XX century with its mass conveyor belts and replaceable workers.

If anyone wants to survive today and tomorrow, they need to increase their individual value as set not by a government body, but by the market, aka flesh-and-blood people.

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On the contrary, "every man for himself" belongs in the XIX century. In essence, you're advocating that weaker individuals should be trampled under feet.

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> You might not hear about it all that much because it isn't cool to blog about it, but doesn't it make sense that women make less money when, on average, it costs more to hire them? This isn't about right or wrong, it's math.

Have there ever been lower taxes for women in any country? This would make sense, wouldn't it? Society wants (and needs) women to have children. So why shouldn't we pay for it, instead of the employer or the women employees?

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> Have there ever been lower taxes for women in any country?

Yes, that is the way it is in India, and it has been for many years now (as long as I remember). Here are the current rates: http://en.wikipedia.org/wiki/Income_tax_in_India#Tax_Rates

Also note that the rates are lower for those (of either gender) above 60, and lowest for those above 80.

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Very interesting. Not only for that, but it's the first time I've run across the S Asian numbering system. Fascinating.

http://en.wikipedia.org/wiki/Indian_numbering_system

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Michael, I suspect you've been using been using the South Asian numbering system all your life . Surely you write 1,2,3,4,5 as and not I, II, III, IV, V ;)

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Point taken; but I was referring to the groupings of digits in large numbers. I'd never seen anything like,

    10,00,00,000
before.

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I don't want or need more women to have children, and I have no desire to pay for it.

Why can't we just let in more Chinese immigrants if there's not enough people? China already has plenty of people who want to have more children without me having to pay them to do it.

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You agree to pay for it by being born.

For the USA the China way perhaps makes sense. But most countries are primary site of one or more core nations, and the state is created to promote and nourish that nations. The constitution says that. This obviously includes watching how many children are born and making sure there are enough to pass the culture forth.

By the way, this is right because you having children makes us all richer in the long run; you driving around on a nice imported car or having a slightly larger house do not.

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>> this is right because you having children makes us all richer in the long run

I disagree. Rampant demography is one of the cause for poverty in many parts of the world. While you can say it makes sense to have 1-2 children to pass to the next generation, having 20 children does nothing good does not make anyone richer in the end. Booms in demography always have detrimental effects, because ressources and economies do not always scale well to deal with it.

>> You agree to pay for it by being born.

I fail to understand how you can "agree" on something by being born, since being born is nothing volontary, while an agreement means there is conscience behind it. Your sentence does not mean anything at all.

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We're talking about development, urbanized countries. In those, you having children leads to economic growth and other positive effects in the long run.

There are a lot of places where you agree without actually agreeing. See taxes, citisenship and EULAs.

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Even in urbanized countries, I think there is a sweet spot for the number of children that should be desirable vs what would cost you massive problems later on. If you are talking about having 2 children just to renew the generations, I have no problem to follow you on that path, but more is questionnable when you already have massive unemployment, a crumbling debt on the whole of society and an education system which has become the synonym for disaster. Growth comes from solid standards, not from loose ones.

About your second comment: maybe it's just about words, but technically speaking you do not "agree" with your citizenship, you are just born with it. It's like having parents, you do not "agree with it", it's just given. And this is different from EULAs where you do "agree" (since you have to signify your agreement explicitely) while the legality of the EULAs is, in general, highly questionable.

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In Spain you pay less taxes for hiring a woman than a man. This also applies when hiring young or old or disabled people. So, you pay max taxes hiring a 30-some man without physical or mental disabilities.

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Interesting suggestion, but part of the problem is that a woman who works 5 out of 10 years at $100k pays the top marginal tax rate for those 5 years and no taxes for the next 5. A less ridiculous tax policy might get you that for free.

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That's happening in Finland, you earn less you pay taxes progressively less. And we have this thing called parental subsidy or something like that, it is about the money needed feed a child. Only thing this has solved is the possibility to have 20 children in one family. The new problem is that this one religious group is having those large families, and nobody seems to have the time to actually raise those kids.

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Individuals (whether man, woman, or 'family') receive tax breaks for having children (ie. dependents) in the United States.

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> People make choices. My choice may be to work until I have enough money to where I can earn enough interest passively while I go to Africa and join Engineers without Borders. Or my choice might be to have children. Either way, my productivity, savings, and future goals need to be harmonized for my plans to come to fruition.

The flaw in your argument is, that you are in a position, that you can afford to make such choices. Most people here are in a sector, that is in a bubble right now (IT/web), so they dont have much problem getting a high paying job (when people working for other industries are worried about getting any kind job.).

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For both discussions about governmental policies regarding conditions of employment and discussions about college admission policies, it's important to look deeply into the details of what the policies actually do. If long-term, sustained economic growth that spreads prosperity around the general population is the goal, then it is certainly possible to have too much governmental intervention, governmental intervention that denies employers flexibility and keeps the masses from helping themselves through free enterprise.

Your comment mentioned "affirmative action" in the context of college admission, and hived off many subcomments of varying quality. College admission practices in the United States are partly constrained by federal regulations (applicable to all colleges, government-run or privately run, that receive federal grants or admit students who receive federal financial aid) and partly constrained by state law in some states or by agreements in NCAA athletic conferences. Not all colleges have the same admission policy. Few people are aware that Harvard, which endeavors to interview all applicants for undergraduate admission and receives application forms with the applicant's real name in all cases, nonetheless reports to the federal government that 12 percent of its undergraduates are "race/ethnicity unknown."

http://members.ucan-network.org/harvard

In United States federal law, all colleges are required to ask their applicants and enrolled students questions about federal defined "race" and "ethnicity" categories. But students are not required to answer those questions, and more than 1 million currently enrolled students in United States colleges and universities are reported as "race/ethnicity unknown."

http://talk.collegeconfidential.com/college-admissions/12282...

I know a family of "black" people who have a daughter studying at Caltech, which is reputed to pay very little attention to "race" as an admission criterion. I knew that young woman as she was growing up (she and my oldest son were classmates in a mathematics summer program, through which I met her mother) and she certainly had a variety of college choices when she was applying for college. It may be that she particularly likes being at Caltech just because it is reputed to admit qualified applicants, period, without consideration of issues that don't pertain to the applicant's ability to succeed in a legendarily tough academic program. Throughout the United States, when organizations make clear what personal characteristics they are looking for, and what benefits there are to joining [insert name of college here, or insert name of employer here], then young people of all varieties of ethnic groups step up and develop the qualifications. One of the best ways to honor the young people who develop competitive qualifications for competitive opportunities is for colleges and employers to make clear that what they are looking for is qualified applicants, irrespective of the social categories the applicants may belong to.

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"doesn't it make sense that women make less money when, on average, it costs more to hire them?"

Why is there an assumption that a women should cost more to hire? Don't men also take paternity leave? Why is it assumed that a woman must be solely responsible for childcare? No one seems to worry that a man might have children when hiring.

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Why can't you believe it?

Do you not deal with people in a daily basis that disagree with your libertarianism or your presuppositions?

I read you are a data guy, I am a statistician myself, dealing with data this should not surprise you.

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I've always found Hacker News to be, on average moderately libertarian. Californian libertarian if that makes sense. When I first got here most posts were fairly left of center, which greatly surprised me.

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> People make choices. My choice may be to work until I have enough money to where I can earn enough interest passively while I go to Africa and join Engineers without Borders. Or my choice might be to have children. Either way, my productivity, savings, and future goals need to be harmonized for my plans to come to fruition. Most responsible, productive people find it very easy to return to the workforce. Sometimes they are a step down or two (as in the case of my mother, who was a former research manager at IBM before she had my brother and me) but if their skills haven't eroded, they quickly gain back, and even exceed their position (she's now fairly high up at AT&T managing the internet pipes between Asia and the Americas, as well as VPN services to huge companies like Siemens).

what you are saying here is that, although having children is typically something that two people do, the onus falls on the woman to bear the career hit, and have to run faster and harder to return to the same place.

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> the onus falls on the woman to bear the career hit

Yes, women have uteri and lactate while men don't. It really is that simple and societies have compensated for this for millennia by putting (or pressuring) an obligation to provide for a woman on the father of her children, a practice later institutionalized and extended in marriage.

Is there a better solution? Perhaps, perhaps not, but the reasons for that one are pretty clear.

Also, I'm a little concerned with the fact that this private family matter now involves government and employers. There is a worrying, at least to me, trend of corporations and governments regulating more and more of our private lives.

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>That would be disastrous. Special cases governed by whom? Elected officials? There is about another 500 pages of laws. Logging towns, IT, Nurses, flight attendants, basketball players, elementary teachers, the list goes on and on.

I don't think it would be disastrous. Except for it being a complicated law and wondering who would handle the special cases I don't see you giving any real reasons for it being disastrous.

In Norway we actually have such laws in place, though they don't govern employees, but rather the boards of big public companies and also all state owned companies.

I think some of the segregation of gender in certain workplaces is much due to there having always been segregation there and this affects the young because of their parents, social norms and just the plane average and normal. It's time to make a change.

Women should work and earn as much as men. Children should go to kindergarten from an early age to facilitate this.

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>Social responsibility for a business is to provide goods to the public through voluntary exchange while adhering to the non-aggression principle.

Wouldn't it also be a social responsibility for a business to insure that they protect whatever commons(s) they interact with, like the environment?

I don't think their social responsibility is merely about providing goods, but behaving responsibly in all manners of conduct.

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I think some degree of affirmative action is good. Racism still exists, and explicit quotas to ensure that a few black applicants can get a spot at a college or a firm seems like a reasonable strategy to counteract kneejerk discrimination. It doesn't seem unlikely that given two equal applications, one with a black name and the other with a white name, that someone might consistently accept the white one instead.

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There is a worrying undercurrent of self sufficency worked for me, it should work for everyone in many us style right of centre commentary these days. I understand it's heart felt but

- most jobs don't pay enough to save. The average blue collar wage in US has not moved in nearly 30 years in dollar terms.

- most people (it seems) who push this view come from states that have lots of space few people and net inflowss of cash from the rest of the us.

In other words saying everyone should Save is a good idea but like saying everyone should be thin, we don't live in bodies or society adapted to make that happpen and it's not clear how to get there

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The thing (in many European countries) is that government doesn't 'steal' your money, but that out of every salary you have to pay for many different things. Income tax is only one aspect.

For those interested, this is the reality in my country, Slovenia, which borders Hungary (I may have botched some numbers regarding taxation, but the principle behind calculations stands):

1. Out of every monthly salary you pay: income tax, state/public pension fund, health insurance and also a small tax (<1%) called parental security.

2. A woman or a man may take up to 12 months of parental leave, which is fully paid by the state. The government uses money from 'parental security' tax to pay for this privilege. It works, because at any given moment there are many,many more employees not on parental leave than those on parental leave.

3. A woman is entitled to sick leave during pregnancy if her doctor makes such decision. So it may well be that she is absent for two years from her job. And it is also true that many women abused this privilege simply by convincing their doctors that they 'cannot perform on the job while pregnant'. A few years ago there's was a sort of clampdown to this practice by tightening the control on the doctors' decisions. So it's not that pervasive anymore.

4. A woman is also entitled to reduced workday (only 4 hours instead of 8) while her child is under 6. Her salary is of course halved, but state covers her pension fund as if she worked 8 hours. Many women don't decide to use this option, simply because a halved salary puts a lot of strain to majority of families' incomes.

5. Regarding firing workers: similarly to Hungary it's very difficult to fire someone and almost impossible to fire pregnant women or old people. Therefore, majority of people under 35 don't have regular contracts, but they work via independent contracts or the so-called self-employment companies (you establish a company in which you are a sole employee and then go work to another company which pays you via your small company). Needless to say, job security is practically non-existant if you aren't on regular contract.

6. Progressive income tax is also here, however it's not as brutal as in Hungary. Lower salaries (<1k euros) are actually not taxed that much. The problem is only that the highest tax bracket (41%) comes already at 2k euros and that hits middle class the most. We, skilled professionals, are usually complaining the most about this fact. There are discussions to change this taxation in order to stem the brain-drain. It's also important to know that progressive taxation is applied on 'past-the-post' principle: e.g. you are taxed 41% only for your income that goes over a certain amount. This means that if your salary is 2k euros, you'll be taxed 41% only on income past 1.5k euros, that is 500 euros will be taxed 41%, 1.5k euros 27%.

7. Grey economy/tax evasion is certainly a problem, however the tax bureau is becoming more and more powerful and it's connected with banks. It's actually not that easy to cheat anymore. That goes for majority of people/businesses, richest top 5% still game the system by moving the money to Cyprus/Luxemburg shell companies and so on, but this can't really be helped unless it's solved on EU level.

Ok, I'll stop now :-). If you have any further questions, then do ask.

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That's still far lower taxes than I pay in the USA. SS, Medicare, State, Federal really adds up.

Federal 25%(over 34k), Medicare 15.3% (below ~120k cutoff), Medicare 2.9%, Virginia 5.75% (over 17k /year). Now many people get tax breaks for various things but 50% income tax rate is fairly common for the upper middle class without much in the way of a safety net or public heath care.

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It's not quite that straightforward, is it? State taxes are federally deductible. And virtually everyone in the upper middle class owns a home and takes a whopping deduction on mortgage interest, and property taxes are also deductible.

I'd also push back on "not much in the way of a safety net". I'd like universal single-payer health care, but in the meantime it's worth remembering (a) once you hit retirement age, you very much do get public health care, and (b) retirement age is when you're most likely to incur medical expenses.

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If he's in Virginia (I was there 9 years), it takes a significant income to have a home. My old one bedroom condo at 835 sqft was 240k in 2005. A single family home in a reasonable neighborhood starts at $300k pretty easily which is easily 2-3x prices here in Austin.

The problem is that salaries in DC aren't double Austin.. they're more like 1.3-1.5x.

Also, once you're about the 50k threshold for income, some of those deductions - like for student loans - start decreasing and disappear.

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A $300k single family home is a starter home in the upper middle class.

The only deductions I mentioned --- mortgage interest and state taxes --- don't vanish at $50k.

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This is why I refuse to buy property in the DC metro area. Not a good deal at all. Better to export the salary elsewhere.

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This places people who have absolutely no desire of ever owning a home (such as myself) at an unfair disadvantage.

Higher taxes because I choose to pay other people for housing for the rest of my life? Huh?

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You might just as productively debate the whole concept of the progressive income tax scheme, because the mortgage interest tax deduction is probably the most popular deduction in the code.

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Although I don't in fact like the progressive income tax scheme, I don't see why it isn't possible to critique this aspect of it while supporting the concept at large.

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I generally don't agree with your premise, that it's unfair to advantage homeowners in the tax code. I think society as a whole benefits from increases in home ownership (homeowners are stakeholders in neighborhoods). I think the tax code can either be simple or effective.

You are free to disagree at length with both of those beliefs and I won't fault you for doing so, except that if the best argument you can muster is "no fair, I just want to rent" I may roll my eyes.

But the thing I really wanted to point out is, there are 104905480 things we can debate on HN where a change of perspective might be productive. This isn't one of them; the mortgage interest tax deduction is a psychological pillar of the middle class of the US and eliminating it would be painfully disruptive to huge numbers of voters.

Narcotics will be decriminalized nationwide before we lose deductible mortgage interest, is my prediction. People have strong feelings about drugs, too, but the decision to legalize them or not doesn't change whether they can still afford the cable bill.

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"You are free to disagree at length with both of those beliefs and I won't fault you for doing so, except that if the best argument you can muster is "no fair, I just want to rent" I may roll my eyes."

This is fundamentally an issue of the tax code, once again, favoring those who are well off while disadvantaging those who are not.

If that doesn't concern you, then so be it.

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The mortgage interest deduction is subsiding those who make the choice to reduce their labor mobility; why would we subsidize people who want to reduce their competitiveness in the labor force?

Hopefully the mortgage interest deduction will go the way of ethanol subsidies.

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The equivalent UK benefit (MIRAS[1]) was abolished by the Conservative party, which out of the two main parties would be the right wing party of home ownership. It can happen ...

[1] https://en.wikipedia.org/wiki/Mortgage_Interest_Relief_At_So...

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High levels of home ownership causes long term economic harm by preventing people from moving around in response to better job offers etc. More importantly the mortgage tax credit simply increases home prices vs. making them more affordable. The reality is it's wildly understood as a bad idea economically, but it's so popular it's simply being chipped away by capping it and not indexing the cap to inflation.

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These numbers don't add up for me. I make just over six figures a year and my effective tax rate at the end of every year is roughly 20% (according to TurboTax). Single, no kids, no house.

As tptacek pointed out you are ignoring that the state tax is federally deductible and that the income tax rate at the 25% bracket is the marginal rate.

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The key to taxes in the United States is that they are broken up into a large number of categories. 20% sounds about right for "Federal Income Tax", but that's only counting the largest tax of 4 or 5 taxes levied directly on salary.

At that income level (around 100k/yr), the tax federal taxes reported to you on your last pay stub of the year should be around 28%, when you count FICA (6.2%) and Medicare (1.45%). Add to that whatever your state income tax is (most states have an income tax). As an example, I have to pay 4.63% to the state of Colorado. I think most states that impose an income tax are within a few percent of that. Then add the hidden employer side of payroll tax (another 6.2%), and you end up with a figure that is close to 40% of income.

Minimum standard deduction and a single personal exemption will remove a few percent from this figure at filing time, and you can delay tax payment through 401(k) contribution, but it is still a very heavy tax rate. It is just well hidden from the average income earner by putting the taxes into a number of buckets.

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I'm a little uncomfortable talking in specifics here, but I'm not close to 50% effective tax. IL's state income tax is 2 points lower than VA's (or was until recently) but that's 2 points.

20% sounds low to me too (makes me wonder whether he missed FICA), but add all them together and you're still not giving half your money away.

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That 41% that I've mentioned is just income tax on my brutto salary. Pension fund is ~15%, health insurance 8.5%. In addition to my taxes on brutto salary, the employer is levied additional taxes for my health care and my pension (so called employer's mandatory participation). In total, the cost for the employers quickly adds up, so (for example) 3000EUR brutto will give me 1700EUR netto and the total cost for employer will actually be 3483EUR.

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Just want to point out that if 8.5% is getting you single-payer health insurance without deductibles, it's still a better deal than the prevailing rates for low- (not no-) deductible private market health insurance in the US.

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My experience so far in Hungary - and I expect Slovenia to be pretty similar is that you can't really compare the benefits between state provided medical in Central/Eastern Europe to what can get through private insurance in the U.S.

I never knew someone in the US that had to get cash to the doctor on the side or bring their own toilet paper and food to the hospital.

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Know any Slovenians who got bankrupted by appendicitis?

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I'm not exactly sure what grandparent is implying. Health care in Slovenia is actually pretty nice (you most certainly don't need to bring your own food or anything else in the hospital) and covers most of the situations you might encounter in your life, with one ugly exception: queues for some non-life-threatening operations and/or examinations. Most notorious being orthopedic surgery. It turns out that what isn't life threatening today, might become very dangerous for your health in the timespan of several months, before it's your turn to be operated on. So many people who get stuck in queues pay additionally from their pockets to get the necessary examinations/operations as soon as possible in privately owned medical establishments. Another funny thing stemming from this fact is that many doctors/surgeons work in public hospitals four days a week and then privately a day a week or some similar arrangement.

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If it's better in Slovenia, then I'm glad. Not trying to imply anything and I apologize if I caused offense.

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That's not what I'm talking about. I'm saying you can't just compare costs straight across by looking at taxes vs. premiums because in the health care system here there are a number of hidden costs.

I had a friend who broke his arm. The emergency room doctor wouldn't touch him until the family provided some cash.

If you have to provide extra bedding, food and toiletries for a hospital stay on your own - those costs aren't reflected in the taxes that one pays for health care.

This has nothing to do with debating the merits about either system, I'm purely talking about trying to accurately compare the costs.

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I'm asking seriously: how much cash? Couple hundred bucks?

The system you describe is obviously corrupt, and I sympathize with the frustration, but I might prefer a system where I had to spiff doctors a couple bills to get an arm set over a system where I could be both insured and bankrupted by minor surgery that happened to snag a loophole in my policy. That's the private market insurance system we have in the US.

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I'm not sure what he payed and that was a while ago. Most Americans that I know in Hungary, when they need something done they go to Austria.

I lived in the US most of my life. The health care system there is pretty messed up - in my opinion. But when I moved to Hungary I realized I'd been quite naive about how things are here.

I assumed it was a rather cut and dry fact that health care would be better here - and it isn't as simple as I had assumed.

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I suspect you'd get near royal treatment with a couple hundred bucks...

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... and don't forget the other things we don't include in our taxes here, but that are covered by your taxes in many other (especially European) countries: health care, retirement, disability insurance.

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Australia will tax residents for offshore assets. Most countries don't. Of course, it's easier to cheat (as the banks overseas may not co-operate), but that might change with more international co-operation.

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I remember reading a story about a wealthy Australian that went to court regarding his offshore assets. The assets were under a trust that locked him out of making any decisions, automatically triggered when he became a defendant in such a court case.

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Trust structures in Australia are a big loophole, that's true.

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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.

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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.

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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.

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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.

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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.

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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."

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"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.

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Bo-hoo-hoo. Cry me a river.

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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.

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>given the privileges corporations receive (like limited liability)

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

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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.

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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.

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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?

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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.)

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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.

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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.

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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.

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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.

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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.

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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.

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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...

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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.

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"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.

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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.

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

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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.

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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?

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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.

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"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.

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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.

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

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

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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.

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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.

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

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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.

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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.

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

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Hiring people is now the equivalent of exploiting them?

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"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.

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"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.

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> "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.

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Tu quoque.

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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.

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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.

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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).

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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.

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>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.

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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...

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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.

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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.

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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...

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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).

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

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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?

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

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

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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.

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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?

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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.

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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.

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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.

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"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.

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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.

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"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.

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"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.

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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.

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

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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.

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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.

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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.

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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]

http://onlinelibrary.wiley.com/doi/10.1111/j.0013-0133.2005....

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

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@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.

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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.

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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.

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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.

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> 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.

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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.

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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.

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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.

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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.

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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).

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Nail on the head.

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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.

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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.

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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.

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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?

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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.

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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.

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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.

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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.

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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.

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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 :-)

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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.

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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.

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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.

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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.

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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.

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"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?

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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.

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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.

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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.)

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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.

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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.

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

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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!

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    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.

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> 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.

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

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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.

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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.

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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.

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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.

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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.

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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).

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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.

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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.

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> 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.

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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.

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Heh. Downvoted as expected. Still true though.

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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.

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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.

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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.

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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.

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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

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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.

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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.

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Szia!

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".

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:) Thanks mate.

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> 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.

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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.

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> - 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).

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

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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.

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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

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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.

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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?

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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 ?).

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>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).

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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.

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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.

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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.

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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.

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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.

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> 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.

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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.

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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.

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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.)

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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.

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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."

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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."

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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.

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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.

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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.

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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)?

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

Easy.

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.

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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).

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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.

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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.

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> 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.

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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.

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

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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.

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

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

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

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Same in Switzerland.

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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.

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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?

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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.

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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.

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

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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.

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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.

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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)

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Good luck at your next meeting with the firing squad!

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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.

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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 ;-)

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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.

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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).

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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.

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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...

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

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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.

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

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Yes, I'm from Romania.

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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.

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>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.

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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.

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This.

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)

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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.

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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.

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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 :)

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

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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).

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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.

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Thanks :)

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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.

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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.

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

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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.

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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.

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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.

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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...

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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.

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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.

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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.

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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.

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> 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

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...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.

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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.

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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.

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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.

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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]

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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?

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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)?

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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 :) )

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

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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.

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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.

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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?

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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.

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1- The competition sells the same service, but illegally, under really crappy circumstances, charging €9 per hour. They simply pocket the money, without even issuing an invoice, it doesn't even include the VAT. They don't have to take any responsibility, there are no warranties, they officially don't even do anything, there's not even an official, legal trace of their existence. They don't have to rent an office, hire an accountant. By doing this 5 hours a day, they can easily make €1,000. They would point their middle fingers to my €760 job offer, where they wouldn't be allowed to do crappy work, but show up in time every day and meet very high professional standards in their work, they wouldn't be allowed to defraud the customers, and if they did, they would be fired.

If your business plan calls for entering a market where the going hourly rate (legal or not) is 9 and you want to charge 37, your business plan is seriously flawed to the degree that every other explanation you've provided for not starting the business is moot. You have no business plan and therefore you won't hire anyone because you have no business. Find a new market.

2- The competition would do smear campaigns against my company. I would have to face anti-capitalist propaganda, I would be seen as a greedy asshole who charges €37 for what they charge €9, I would be an enemy of the nice Hungarian people, while others work honestly for the fraction of my price...

Without knowing what business you're talking about, it's hard to view this complaint as anything more than irrational defeatism.

3- Many of my employees would only come to work for me to learn my business secrets and to steal my clients. They would lure them by lying that they will get the same value and quality of service, but at the fraction of the price. After they stole enough clients, they would deliberately cause a lot of harm to my company to get themselves fired. They would then go to court, stating that I fired them illegally, and they would win the case. In the meantime, they would of course work happily for the stolen clientele, that has cost me a fortune to build up. And of course they would be offended. They would trumpet on all kind of forums, that they have worked for my company, they know what they're talking about. Not only it is very expensive, but the service is a piece of crap too.

Granted, I'm entirely unfamiliar with Hungarian employment law, but this also sounds like irrational defeatism, or at least a failure on your part to understand best practices in documenting employee behavior. In addition, why doesn't this cataclysmic issue affect the 9/hour competition?

4- Complaining about all this wouldn't help, no one would give a flying fuck.

Complaining about real issues is one thing. Complaining about the market when your business plan is pie-in-the-sky and everything and everyone is out to get you is quite another.

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1) You don't get it. Your competitors cheat. Illegally. They don't pay customs, they don't pay taxes, they don't pay social security, and they get away with it. No matter how good your business plan is, your illegal competitors, who often shamelessly copy your otherwise excellent product / idea / service will do it for 1/3 of the price. They simply have a huge, very unfair advantage against us, who do business legally.

2.) This is personal experience, a lot of them, not a single case, and common sense in Hungary. Happens all the time. Our goverment does it for God's sakes. Read some Hungarian forums, and use Google translate.

3.) Because the €9 competition is mostly private persons. They don't hire anybody. Court cases here can last 5-10 years. 3-4 years is very common. And it really is very flawed. I tell you one example how intellectual property is treated. My blogpost was published in its entire length maybe a 1000 times without any permission, whatsoever. Including political parties. It doesn't even occur to their mind that's illegal. The same thing happens if your employees take away your client list, your software, whatever they can. You just don't win the case at court.

4) I know how to do business, my business plans are perfectly sound. This is a blogpost, with a fictional, generic scrap, so that everyday people get an idea. But your comment basically proves me right. People generally don't care, no matter if I whine. I can whine all day long, nobody gives a flying fuck. Not my goverment, not my customers, not the justice system, nobody cares if corruption kills my business. So, I don't give a job man.

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You don't get it. Your competitors cheat. Illegally. They don't pay customs, they don't pay taxes, they don't pay social security, and they get away with it. No matter how good your business plan is, your illegal competitors, who often shamelessly copy your otherwise excellent product / idea / service will do it for 1/3 of the price. They simply have a huge, very unfair advantage against us, who do business legally.

You need to find a business which is less easy to copy and/or one in which you can offer significant benefit vs. an illegal competitor. It's that simple. In the U.S. we have an identical situation to what you describe in the services industry: outsourcing. I need to charge X in order to survive as, say, a web developer, whereas someone in India or Vietnam can charge 1/X for essentially the same service. Now it's my decision whether to create enough benefit for a customer to continue in that field, knowing that many potential customers will simply outsource, or identify another field where I can provide a service that is not as easily outsourced.

Competition is competition, in respect to your business plan the legality is irrelevant.

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Outsourcing is similar, but still very different issue. Agreed, as a web developer you have to compete with worldwide competition, that may be "unfair". Yes, you have to find a business plan, that still works. It's that easy.

But nationwide local corruption is a different game. Let's say you run a small restaurant. The guy next door opens one, and their menu is as good as yours, but costs 1/2 of your prices. You can't match them, because of all the dirty tactics. You have two options. Go out of business, or start using those dirty tactics too, and then you become a part of the problem.

You can tell me there are other options, like, I don't know, turning my restaurant to something completely different, but the principle still stands. Whatever I do, if it's successful, illegals will copy it exactly, but sell cheaper. It's just a question of time. It's a national sport.

It's the survival of the most corrupt (not the fittest).

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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.

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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 ...

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

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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.

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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.

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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.

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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.

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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.

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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.

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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).

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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.

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This can backfire.

http://en.wikipedia.org/wiki/Constructive_dismissal

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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"""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").

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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.

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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.

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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.

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It's possible to arrange such things contractually.

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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.

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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).

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

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"""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...

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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.

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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.

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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.

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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.

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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.

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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?

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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.

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

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Mechanic is also an individual.

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Why it isn't a good idea?

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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 :)

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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.

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... 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.

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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 :)

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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 :(

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Such as..?

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

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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.

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

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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.

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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.

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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

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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.

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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 :)

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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'.

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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.

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IAAL.

"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).

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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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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?

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"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.

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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.

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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.

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Resounding upvote for this comment.

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I run a company in germany, if my employees want EUR 1500 net salary, which is very little for a trained professional, it costs my company roughly EUR 3000. So not that much better.

I dont know what this guy is doing but he should just sell his service internationally so he could easily charge double the money and would solve most of his problems.

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Exactly my thoughts. Most of EU has similar tax/vat and generally in favor of employees. Yet it's not a problem to start a company in the "west block". He complains about corruption too, though. I can believe that being an issue i Hungary.

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But he's hyperbolising, too. An illegal freelancer for a quarter the price is no competition for a legitimate business. Most business clients will not even consider paying black cash in an envelope, and the illegal freelancer will also lose out on social insurance.

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It's interesting that you speak of salary in net. In Australia we speak of it in gross, and the rule of thumb is that an employee costs about 30% more than their gross, which includes 9% mandatory superannuation, payroll tax, and other sundry employment costs.

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See! The net salary and the total cost of employment are the sole interesting figures when comparing internationally, the gross salary is a largely arbitrary figure between those two.

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It's an honour to be discussed here, HN is my #1 source of useful information. I won't disturb. But please let me use this chance to get some tech help. The Hungarian version of this post (http://jakabandor.blog.hu/2011/07/27/tolem_ezert_nem_kapsz_m...) has 'lost' it's Facebook likes. I can't figure out why. If you check it with a tool (http://saqoo.sh/a/labs/fblinkstats/) it's there, but 0 is displayed on the blog. Any ideas?

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I see 91,143 people like this - on that blog post. Facebook like are seen when you type exact same URL. When there is a link with dynamic atributes like http://www....blogpost?commentform234 than it'll not show the likes, comments etc.

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That's not the issue. It doesn't work with a clean URL either. What I see now is strange. It doesn't work with Firefox, but it does with Chrome. I have this issue for half a year now with likes disappearing.

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I always say. A country can be valued by how it protects it's weakest.

I wish people would realize that in a society we should all work together rather than have the strong huddle in a little pile and point and laugh at the weak or needy.

I propose a new law for Hungary saying that every company with more than 10 employees should have the same percentage of female/male as that of the population or in special cases (like with IT) that of the field at universities. This would stop some companies profiting from healthy 30 year old single men, and then throw them away like rags once they start feeling the pressure or want children.

To give incentive to the law I propose giving higher tax to those companies not following the laws and increasing them at an exponential rate yearly :)

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The real problem is not that women won't get a job, but that the non-corrupt tax paying companies get kicked out of the price war, because they have to charge more, to compensate for the high taxes. Hungary takes more than a half of peoples salary (and a whole lot more after), and most of the companies just don't pay the taxes for your real salary, only for the minimal wage.

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I'd like to think of myself as responsible person in all possible aspects. That of course means, that I'd like to be socially responsible too. I would even go as far as saying that I actually am socially responsible. My point is, the sort of regulations you are proposing don't work. They impossibly violate the rules of life, especially when it's a small business. These regulations do a lot of harm. I do believe seriuosly, that society must protect its weakest. So goverments should make it cheaper to employ them. That's fair enough. And then, please, let us do our business. We businesses are people too. We can't be treated like this, or we just can't survive. We have to close shop, if all sorts of regulations are against our freedom to do business the way we think it makes sense. Well, something like this... :)

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If it governs every business I'm sure the fittest business would survive.

And I think that regulations mostly do good and are important to stop bullies from eating up society.

I'm sure most business thought that outlawing slaves in the US would ruin them. Now business are thinking that hiring women of child bearing age will ruin them. They probably also think that not being allowed to dump their waste in the river will ruin them too.

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You see, they DON'T govern every business. That's the issue. They govern only the decent, good businesses. This die, the corrupt ones (that are NOT governed by any regulations, nor taxes, nada) survive.

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Don't blame businesses, don't blame women. Blame governments that refuse the responsibilities of taking hard, but necessary decisions, because they're afraid it'll cost them votes. They instead play shady games that only appear to resolve issues, when all they do is to force/allow both businesses and people to dabble in gray areas.

Let's speak hypothetically. Let's say we're a government that sees that we have too many expenses and as a result have very high taxes. Yet, we still have some unresolved social issues for which we have no budget, such as maternity programs and 50+ employment protection (yes, these should be state responsibilities, no reason to offload it to businesses). We could decide to reshuffle our current programs to make room for these, but that would certainly means cutting into some other established programs (unpopular decisions = no no in politics). Alternatively, we could yet again openly increase taxes, at the risk of looking even more expensive than neighboring countries and losing even more businesses (no no). We will do neither, instead we'll come up with laws that makes us look good with the people (3 years maternity, ensured reemployment, 50+ protection, all bankrolled by businesses), while allowing employers to find loopholes (discrimination).

The issues themselves remain unresolved and everybody goes home happy.

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I submitted a post about this at one point, but Hungary is going through really terrible cultural and political troubles. I really feel for the Hungarian people - in that context, the frustration in this post makes much more sense.

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Is it just me or does this writer have an incredibly pessimistic view on his own workers?

Re [sic]: "they will just steal my ideas...", "women will take 6 year vacations (out of spite?)", etc.

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It is reality. It does happen, that you're a smallbusiness owner, and somebody you used to hire 6 years ago shows up. She's back from maternity leave. And you have to rehire her, increase her salary to present level, pay her 4 months of fully paid vacation. And either grow your company - if you can -, or make room for her. How? By laying off somebody else. Maybe the one who had to hire when your employee 6 years ago went left to raise children. This is not a 'pessimistic view', this is what happens all the time.

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Nobody ever said the transition from a small business to big business is a simple one.

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Especially not this way. Whenever the goverment says they're about to help us in the transition, I'm already in horror.

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Being from Europe originally and having lived in Silicon Valley now for more than 10 years, I did the math on comparative taxes.

In the end, it's a wash. If you take into account everything. I make more money in the US. But my retirement costs are higher. And by the time I put two kids through college (college is free in some European countries), it basically balances the extra cash I made over a 20-year career.

Of course, for any given situation (single, dual income no kids), your results will vary. But I'd argue that a household with 2 kids is fairly common.

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Even if it is a wash, and the costs of things end up being the same, the real issue is the question of who should be spending the money you earn.

Should the government be allowed to forcibly take your earnings away to pay for your kids college and purchase retirement for you?

What if you decide your kids would be better off earning their own way through college, or what if you want to retire in a location with nice weather and a very low cost of living?

It sounds like living in Silicon Valley has not made you more wealthy, it's just provided you with a wealth of choices that the author of this article doesn't have.

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The links below present the governmental spending over the last 100 years or so: - this is partly in Romanian partly in English, but you should get the point: http://www.logec.ro/2011/12/12/ultima-prezentare-a-lui-lesze... - this is for US only: http://www.usgovernmentspending.com/us_20th_century_chart.ht...

What these tell me in simple words is that, more and more, some smart asses are taking decisions on our money. I really can't understand people arguing this as a good think as I can't understand how 300-1000 (representing government and parliement) persons do know better than we what we need. This trend is taking more and more from our rights to decide how, when and what we need. It also reduce the incentives to perform (as Jakab Andor put it in his article) and increase the stimulus for free rides. It also increase the chances of monopolies to develop with all the disadvantages that these are bringing (as a side note, by Misses these are the only real monopolies). Unfortunately, under current conditions, I don't believe this trend will change any time soon and we (both US and EU) have a good chance of becoming socialists with democratic hats in the next 50 years or so. This unless some major shift happens, but most probably this won't be a nice and quiet change. And, frankly, I'm not sure what freaks me out more: going in this direction or hopping for a sudden shift.

Secondly, I think discrimination per se is wrong and not productive. However, there are two contradictory types of laws that together increase the cost for a company: the ones that punish discriminations and the ones that adds taxes or additional costs for complying them. This leads to a natural behavior from the business side to reduce their cost. So, in this case I don't believe we are talking about discriminations per se, but about reducing costs in order to compete in a given market. In this respect, I totally agree with him. Whenever this conditions appears there's a good chance to create a black market. The size might differ from country to country based on culture, public enforcing power, the level o burden brought by regulation, but it will exist at some extent.

Coming back to the example with pregnant women, I don't think it's fair to say that we as a society want to stimulate birth, but "you" should bear the cost. It would be much fair to have this done on the society cost not on a particular business that have this case… for example, not by making the employer keep the job (or bear any other costs), but by supporting women until they get a job and perform additional activities to increase their changes to get a job. I'm not saying this is what I would recommend, but I think it's much better than the alternative.

However, I couldn't stop noticing that Jakab Andor only mentions to ways of doing business (besides the "do nothing" option): struggle with a regular business model with a small margin or cheat. These are both sadly choices. I think he missed the "think bigger", at higher margins, be faster or smarter approach.

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In Russia if you don't minimize taxation with tricks and do it straight, you pay like 1,2$ for each 1$ your company makes. So mostly companies aims for super profitable niches, like selling chinese shit with 1000-5000% margin.

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Or you have the 'official' salary of $50/month, and you get the rest paid to you in cash in the envelope each month.

Well, at least that's how things were about 10 years ago when I left - it could have changed a lot.

There was some economist who estimated that if a business in Russia pays EVERY tax it's supposed to by the law, it will pay way over 100% of the profits in taxes. So technically there is no business that is following the law 100%, giving the 'controlling organs' the power to ask for bribes. Could be an urban legend though, I don't have links.

Edit: The parent talks about general taxation, and my take is about the taxes a company has to pay for each employee on top of her salary. Still, I think, "white" and "grey" salaries is an interesting point.

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Most big businesses in Russia work with grey schemes. One of the reason not so many foreign companies here, as they forbidden to pay bribes. Yet most people get payed in white. Some hire people by contracts as invidial entrepreneurs so they don't pay 54% of taxes for them, plus theese employes pay only 6% from their salaray instead of 13% to government.

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That's how things are done in Korea. Your official salary is only a tiny fraction of your actual salary.

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Care to elaborate? I've been thinking of possibly setting up some kind of shop in Korea, so it would be interesting to know more.

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My ex was Korean. Her dad worked at an insurance company, and every month he got his (tiny) official salary as well as an envelop full of cash, which was 4x more money. I asked her about it and she said small companies are normally completely "off the grid" from a tax standpoint, so mid-sized companies need to do this to compete. And they all do.

She opened a bar and never, you know, registered as a business or kept books or did any of the other business things you'd need to do in the US to stay out of jail.

Her impression was tax receipts come mostly from the giant chaebol like LG and Samsung.

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OK, thanks for the information! I wonder how all those small companies manage their cashflow though. Can they receive money to their bank accounts just like they would if paying taxes? It's kind of difficult to imagine they're all shuffling cash around.

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My impression (maybe wrong) is that Korea doesn't have the cash reporting rules we have in the US. So yeah. Cash.

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The same system in Azerbaijan.

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> you pay like 1,2$ for each 1$ your company makes

Sorry, I call BS. This figure is just made up.

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Dmitriy Potapenko sounded this number, when were interviewed about taxation in Russia and Czech Republic. And he owns big retail networks, restaurants and etc. For example McDonalds to cut taxes is working as shops, not as restaurants :)

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This was a really long, enjoyable article. My question is, how does the company that he works for manage to pay him enough to buy a 90k flat? Are they shaddy like the other companies he described? Is he shaddy and not paying his taxes? How did his employer manage to do it and why can't he just follow that path?

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In Hungary smaller companies usually cheat on their taxes... it's a national sport.

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haha I really do believe that is true.

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Maybe he simply inherited it. Maybe he works for Google Hungary or other international company (overall charging rate he has mentioned in article does not look that bad in international context).

What really looks bad how Hungary's laws make companies noncompetitive. E.g. higher employment taxes means people will work in other EU countries if there is possibility.

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I had a female boss once. She said the exact same thing about not hiring women because they get pregnant.

I'm a man in the U.S.A. We don't have all of the laws as described in this article (most of us can be fired for any reason at any time). We're on our own. My wife got 4 weeks leave when she gave birth and that was at 50% of her normal income. Then she went back to work (and governments wonder why births are declining).

Anyway, I was shocked that my boss felt that way about women employees and because she was so matter of fact about it. She didn't have children herself and was past child-bearing age. She was very successful (several master degrees and a very wealthy husband). She was one of the best managers I ever had. But basically, she was a woman who would not hire other women.

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My message is completely different. I do want women to be able to have a long, paid maternity leave. It makes sense. But my goverment shouldn't kill my business either. Isn't that fair to ask? When I'm doing business, I'm a paying a ton of money, thousand times more than the average guy. It doesn't make sense to further punish me, through killing my business via absurd regulations that don't make sense.

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Then you're not making sense. Do you want to be able to fire pregnant women, or do you want to be able to refuse them employment after they return? That would be a horrible thing to do, perhaps it's good that you're not an employer then ;-)

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You misunderstand. Taking care of people is not my responsibilty. It's the state's responisbility. That's why we pay all the taxes and social security.

A business - especially a small business - isn't a place for altruism. I just can't afford hiring people to help them get along with their lives. A business is a business, not social welfare itself. It pays for welfare, but it _is_ not welfare.

I stated exactly what I want. I want to be able to decide on my own, who I hire, who I do not hire. It is as simple as this. They CAN create regulations that FORCE me, but then I choose NOT to do business.

I also suggest other means of helping underpriviliged people to obtain jobs. Such as making me pay LESS if I employ them. That would make sense, in business terms too.

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Oh yes. I was just sharing my past experience. I don't mean to take a side.

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This, I find interesting - it would seem to me that gender equality to some extent is in the interest of business. If before, only men would be working and provide for the entire family, nowadays, you can hire both the man and the woman, because otherwise they might not be able to support themselves on a single salary. So you get roughly 2x the labor power of a population, while increasing wage competition, driving wages down.

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Simple solution - gender equality for time off related to pregnancy. Paternity leave for the same length of time.

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Require equal paternity leave, and the author will be forced to consider married men just as risky a prospect.

Better solution: make the employment restrictions apply to a company of a certain size. A large enough company should be well-enough equipped to take care of its employees. A startup company isn't.

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Even better solution: don't penalize any employers for their employees' reproductive choices.

If the state believes it's a good idea to have a parent at home, the money for maternity and paternity should come out of the state's coffers.

And I'd encourage everybody to be open about their plans to have kids or not. If this results in undue discrimination against people raising kids, offset it with a corporate tax break for employing people with dependents.

This would be really expensive, but probably cheaper than the costs that a destitute single mom or a poorly-parented kid can inflict on society. And at least the costs would be borne by everyone, and both businesses and their employees could be honest and plan realistically.

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> If the state believes it's a good idea to have a parent at home, the money for maternity and paternity should come out of the state's coffers.

It does. The state pays for the paternity leave. The author's point is that he still has to find a replacement worker for those three years.

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If he's not being compensated for the cost of finding and retraining an employee, then the state isn't really paying for the whole thing.

That said, small businesses, and even certain roles in bigger businesses, just can't deal with the kind of disruption this would cause, never mind the money. I think we have to be realistic that someone who wants to take imminent leave shouldn't be in those kinds of jobs, and no government program can fix that.

Maybe I don't have the perfect solution in my pocket, but IMO the right answer can't be that employees lie about (or conceal) their intentions, and employers equally are forced to find plausible reasons not to hire women (or to fire them) just to stay afloat.

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This makes no difference. He would still have to find and retrain an employee if he just fired pregnant employees instead of them taking paternity leave.

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"And I'd encourage everybody to be open about their plans to have kids or not."

I have been asked on two separate occasions by two different bosses making a decision about hiring me on a non-temporary basis about my plans regarding children. I was 18 and 20, and am a woman. No way was I going to say anything other than "I hate kids" regardless of the truth. I don't want an employer making decisions based on my ability to carry children until the day comes that I decide I want a child.

Though I'm happy that no one as disrespectful of their employees and immature as the OP is going to hire me.

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I am definitely not an expert on US discrimination law, but I believe that is actually the case to some degree-many of those laws only apply to companies with more than 15 people (eg Title VII of the Civil Rights Act of 1964).

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I know that some only apply once the company goes past 50 people; I was working for a startup as employee #4 and was looking at the rules for paternity leave (with respect to my then imminent second child) around the time the company passed 50 employees, and it at least kicked in some features of California law, if not Federal law.

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Indeed, OSHA is another. That is why a lot of small businesses, mechanics and machinists for example, purposely stay small. They can't afford to grow because of the increasing regulations. There were several studies at the time of the early-1990s recession and again about the time of the dot-com crash about this, investigating the causes of "non-growth", because most new hiring usually occurs in mid-size companies. I don't really understand why anyone surprised that the economy (especially unemployment) is still screwed-up this long with the hammering mid-size companies have taken in the past decade.

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Simpler solution. Let people make arrangements they want.

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Both approaches seem to work well in various situations, which is why I'm skeptical of the value of these kinds of rants which lack comparative analysis. Apparently it works badly in Hungary; but works well in Sweden. It'd be more enlightening to read some analysis of the differences, since it empirically isn't the case that strong parental leave policies always and everywhere cause high unemployment, even if they anecdotally cause one dude in Hungary to not want to hire women.

(I'd personally guess that culture and corruption have more to do with the large economic differences between Sweden and Hungary than taxation or parental-leave policies do, so I think he's barking up the wrong tree.)

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Apparently it works badly in Hungary; but works well in Sweden.

Or perhaps Sweden has a strong enough economy to compensate for the harms caused by this policy, but Hungary does not.

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Or possibly an established enough economy. How many startups are there?

Billion-dollar companies don't have to worry about it nearly as much as tiny ten-man ventures.

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Sweden has a reasonable number of startups relative to its population: MySQL, Spotify, Wrapp, Mojang, Massive, Absolicon, etc. But I agree that the economies are quite different, which is why I prefer careful analysis (preferably based on data) to anecdotes.

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If it's really true that someone who just started work can immediately take three years maternal leave off, fully paid, and then be due 2.5 months accrued paid vacation time when they return, then I can't imagine how that could work. I don't know if it really works that way in Hungary though, or in Sweden for that matter.

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In Sweden you wouldn't get 2.5 months of accrued paid vacation, it's more like 10 days, as the first 120 days (of 480) (pa/)maternal leave is counted towards vacation.

Then again you have the legal right to take 25 days of vacation per year, but not all of these have to be paid.

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It doesnt work like that. The company doesnt pay you, the state does, and you get less. You do not get vacation time.

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How can the government mandating the kind of paid-leave in Sweden be good for a startup? Tell me how this sort of policy can increase a new startups short-term cash flow? You can't exactly advertize superior working conditions (Google w/ free food/massages/nerf guns/paid child-related leave) since you do not have any track-record of being the hot new startup. Even if you did have the best working conditions available having to pay out for an employee who is not producing anything would probably kill the startup.

Culture/location/talent/vc $ is what makes a company though and to some extent trumps unfavorable tax/labor laws, this is IMO why SV & California have most of the startups as compared to Arizona/Texas or why Scandinavia>Eastern Europe.

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I'd say it's good for talent since you don't have to pick a startup depending on what benefits you get (vacation time, health insurance, parental leave) due to the government providing well enough to begin with. Of course employers here can differentiate by offering more vacation, privatized health insurance, pension deals, but the swedish government seems to provide a better package than most US employers do.

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> Simpler solution. Let people make arrangements they want.

for example, in hard times, or to pay debts, allow to sell oneself into lifetime slavery.

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Simplest solution: move the fuck out of Hungary.

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5 out of 10 friends have already done so. Sad thing is, it won't work on a European level. You can't just say, everybody move the fuck out of Europe. :)

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Only that doesn't work.

The owner of a 100/1000/10000 people company has much more power than the employee in need of work negotiating his salary/working conditions.

Not everyone is a "rock star" employee that managers are bending over backwards to accommodate.

That doesn't mean that the rest of the hundreds of millions of workers have to work with whatever conditions they can arrange for themselves. If managers could have their way, everybody would be working 18/7 for substinence salary. A society has to make laws to protect the public from that.

Politics used to mean: "a way to protect the common folk from bigger powers".

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We do have something pretty close to that in germany since roundabout two years. Either parent of the child may take paternity of up to 12 month in total. I think the mother gets a little extra time and there is a bonus of two month if both parents choose to take a leave of at least two month (so then it's 14 month in total). You get paid the lions share of the wage you had by the state. There's quite a couple of fathers that take at least the two extra month, but I actually know personally two fathers that opted for the full twelve month with their wifes taking the extra two. It will probably take another couple of years until that's widespread though. I can look up the exact details if anyone's interested.

I think this is a pretty good solution to balance the fact that it's women that need to carry the child - now companies have less of an incentive to penalize them for that.

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3 years paternity leave?

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Governments like the one described in this article remind me of a massive monolithic PHP program where all the functionality is lumped into a single blob of spaghetti code. Ugh.

The negative impact of government regulations like this are proved by reducing the size of a company to one.

Example: if you start a business, and hire yourself as the first employee, should you be forced to give yourself 3 years off for maternity leave?

Of course you could never do this. It would kill your business instantly.

Just like the Unix philosophy of writing programs that do one thing and do it well. Society functions better when we have many smaller social institutions with focused roles.

Government doesn't need to do everything. There are plenty of other social constructs that have proven more capable of providing many of society's needs.

Governments should stick to the task of protecting individual liberty.

Businesses should stick to the task of providing quality and innovative goods and services.

Family, community, churches and private charity should stick to the task of taking care of those less fortunate.

We as programmers and developers can help improve society by demanding that (like our small but beautiful software), social institutions stick to singular responsibilities to which they are most suited.

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If you want USA, you know where to find it.

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What struck me was the premise of the article. Creating a startup company by selling your house is no walk in the park in any country. I can see a similar article written about the US. Quit whining, there are other ways. If there isn't a well developed capital market in Hungary, move somewhere else. Even in the States, there is only one silicon valley and people move there. A big part of the allure: access to capital.

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I would just add that you can make money with such a system, you only need to find a business with more added value (difference between cost and price). And this brings to a whole lot of other topics such as if it is fair for a State to raise the bar in such way, so that less added value businesses simply cannot exist, if this improves growth and unemployment in the long run (I don't think so). Etc.

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For what it's worth, the same basic setup is in place in Latin America. Brazil the effective cost is 2x the take home pay for people as well. Maternity leaves are much shorter, and you can fire somebody, you just need to pay a hefty severance. As somebody else mentioned, the way most companies work is to have each developer with their own tiny company.

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Be careful with that, if the tax authorities find out it can be construed as avoiding taxes (it's pretty complicated, but usually they'll find you in violation of at least one tax law as it's almost impossible not to).

Starting a business in Latin America is tough. There are huge incentives for tax evasion (and even when not, you might be evading unknowingly).

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This is why we need better legal and financial structures to create co-operative, worker-owned businesses.

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This is so, so true. Whether through pure rational amoral choice, or subconsciously, every employer knows that some employees come with a hidden extra cost.

In the US, maternity (+paternity) isn't crazy in most states, and I suspect that's not a major issue. However, the fact that anyone but a white male has potential cause to sue if fired (due to their ability to claim gender or race discrimination), is a subtle but insidious reason to think twice about hiring a woman or person of color.

The truth is that these sort of market-distorting regulations, while possibly well intended, frequently end up hurting the people they are designed to help.

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Sounds like a place where businesses are actively discouraged. I wonder how the guy who (hypothetically) buys his €90K apartment made his money? Probably from running a €9/hr shop under-reporting revenues.

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Na-ah. The €9/hr "competition" are students living on instant noodles. You can't make a business out of that.

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I run a business and could relate so strongly, I registered for HN just to comment: this is why I find it so difficult to hire locally in the U.S. - the incentives make it so much easier to offshore work.

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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.

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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.

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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!

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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.

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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?

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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.

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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.

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> It's only Hungary that is so fucked up

That's because you're only looking at Europe. Come to Brazil for a show (minus the huge maternity leave).

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The country of Hungary is almost broke. It's big, bloated government and corruption that's the cause. Hell, the guy's post reads like Atlas Shrugged and he's John Galt. He's "stopping the motor of the world" If you haven't read it, have a look: http://en.wikipedia.org/wiki/Atlas_Shrugged

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"Many of my employees would only come to work for me to learn my business secrets and to steal my clients."

For that issue there is a non-compete contract http://en.wikipedia.org/wiki/Non-compete_clause

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Contracts often still have these clauses in the EU but they're unenforceable. Being able to work anywhere in the EU is considered a right, and these clauses attempt to block that right. You're not allowed to stop someone finding gainful employment, even if that could damage your own business.

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Yeah, that's very nice when you have a working legal system. In Hungary a case like this will take 5 years, and you will most probably loose. They can steal your software, your artwork, your clients, your intellectual property, and you loose the case. Absurd. Happens all the time, not only to me. Judges are clueless in such matters.

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Actually you're not alone. I have a startup in Azerbaijan, the same situation. I divided the work between workers, they can't to the work alone, so they don't know actually what they are doing. I teached the some parts of the business, they do the mechanical work, without asking the questions. I also made a non-compete clause between them for 2 years. Here are some tips from other HN community for this issue:

1. Split your workers into departments. No one single worker should handle all the processes.

2. Use forms to guide people through the process. It will make your processes easier to automate.

3. Take some upfront payment. That will discourage customers from dealing with your employees on the side.

Another trick that I learnt from somebody else is to hold one key process to yourself.

Someone I knew gets clothing manufactured in China. But before it is sold, they do an adjustment to it that is not known to the factory.

Just as Coke has its "secret recipe", you have to make clear to your freelancers that you have a secret step. It will be enough to discourage them from running away with business.

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Look, of course it's possible to find workarounds. But the issue is still valid. There's a huge problem with work ethics. People too often feel they have the right to steal whatever they like, unless of course I can stop them. And the issue is still there. Our justice system does not do justice. I don't want to create an 1984 work envorinment. I do want to trust the people I'm working with. And if they - after signing all the good contracts - in an environment that is built on mutual trust, they steal my property, I want the justice system to do justice.

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"people too often feel they have the right to steal whatever they like, unless of course I can stop them." - so as long as THEY are powerless (or proportionately dis-empowered at least), YOU can reap the upside of risks taken where the downside has been externalised? Sounds like "theft" to me! Who exactly do you want the justice system to do "justice" for?

Property is theft :p

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Look, what's mine is mine. It should not be legal to steal it.

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I'd say division of labor/"departments" are a must-have no matter where you are based. Sometimes LAZY managers/owners put employee level developers together with customers and make them even handle billing/contracts. At one point such employees realize that they don't need you or your company! And why should they?

Besides, specialization increases productivity.

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pathetic reasons for not hiring women.

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Maybe, but they are true. Small companies sometimes just don't have the money. I heard about this hairdresser shop that was about to get bankrupt as four of it's six employees were on maternity leave at the same time.

Ok it's rare occasion that 4/6 would reproduce at the same time, but if the owner nice enough to hire mostly just graduated hairdressers, it starts to look possible.

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[EDIT]: if you downvote, please explain why.

i understand that depending on your country it maybe hard to create good and profitable companies. i'm from austria, europe btw.

but on the other hand what to do with women and old people? i personally hate the idea of selecting employees this way. if nobody hired old people and women, someone, propably the state (read: everybody) had to pay for those people.

for me this boils down to a greater question: how to deal with work/life/family?

anybody here from a country with innovative ways of handling this?

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Although each country has its own rules (maternity leaves, vacations, VAT, etc...) but the problems are common share to all of us. Great post!

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Based on the discussions I can't help but wonder how many people here recognize that this article was written for Hungary and not the USA?

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That's pretty much the same reason why Milton Friedman is against a minimum wage stipulated by state.

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>our customers would pay €37 / hour for our service.

That seems low.

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my solution: get into business where you can hire machines, not people + outsource the rest.

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people like these are what class struggle is for, amirite?

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Why are businesses forced to pay for maternity leave, and not taxpayers?

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Good. I wouldn't want to work for you, after all you seem to spend more time writing about why you want to fire me than how to make money!

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This guy won't ever hire anyone because all he does is imagine the worst possible outcome for a given situation with no eye toward actual likelihood or his own ability to select a good candidate. Good luck with that attitude, 'entrepreneur'.

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This guy is a complete asshole. Why is this #1 on HN?

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Anyone idiot or indeed a wise man can crank out an opinion or even cliched abuse but don't you find it more interesting when they bother to offer a counterpoint or an argument or pertinent further evidence regarding the issue?.

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Well, it's not complicated to do the math...

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While what he says may be true, without employees, his business can't scale. What he is describing is the difficulty of startups competing against established competitors who have a reliable source of revenue. In many countries, smaller businesses get some form of exemption.

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More and more you are compelled to own the corporation that represents you in business. So we can get around onerous government regulation. We are taxed to pay for the private-public crony-capitalism complex. It may be costly or unconscionable for me to hire you--or to be hired and paid as an individual taxpayer--and let that money go freely into corruption. But we can hire the other's company. How your company uses its money and treats its employees is your business.

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What a douche.

Guess what? People are messy. But more importantly, people are valuable.

The author can whine all he likes. But really, try getting something done without them. Oh, wait, he says he's not going to even try... why are we reading this?

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It sounds like you didn't even read the article.

The author is describing a lot of negative legal aspects in his country that make running a successful business nigh impossible.

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I did.

The reason that the article irked me:

Imagine this combination: brilliant, an MSc in CompSci, being over 50, female, not white, and an immigrant.

I tried to get her hired for the IT department where I worked. Instead she was cheated out of her pay and fired before the standard employee trial period ended. Standard practice for the place. (900 employees in four years, avg occupancy of 50 workers, anyone mid-level and up is white only, and as soon as a project was over almost everybody is fired, continuity of work is not the issue).

I've heard all the same excuses before in a much friendlier business environment. All in an attempt to treat people like they are not human beings. I know nothing about the author and I'm not disputing the realities of business in Hungary. But damn I want to shoot the message.

And a swath of downvotes in an attempt to do so is worth that...

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I'm not so sure. If I had to keep an employee for 3 years while they were on vacation I would just not hire any employees. Or I'd move somewhere with sane business laws.

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I'd never have any employees. Independent contractors all the way.

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Haha you sound like you're from the region. That and proxy employment agencies, and the employees end up with a lower salary (agency takes a cut) and lower protection. Ironically predictable.

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