the state takes a pretty big amount of risk and costs. Who pays healthcare, who pays maternity leave and social security in a fast and loose labor market like that? The answer in the US often is, nobody or the federal government.
In a country like Germany, France or in Scandinavia running a business is harder because there's an expectation that businesses can take care of their workers. A lot of red tape exists to make sure that a business can shoulder these things. In fact in Scandinavia eliminating unproductive firms through measures like wage compression was deliberately part of their social model to drive concentration and creation of productive firms.
There really are a lot of implications to creating the sort of environment that the US or to a lesser extent the UK has, and it doesn't work well with the economic model of most of Europe.
> Who pays healthcare, who pays maternity leave and social security in a fast and loose labor market like that?
Are you from Scandinavia? Because the state pays these things (except maternity leave) in Denmark, whether you're in a job or not, so no there really isn't a risk to the state. The only thing the business is paying for is your salary, pension (if they offer it) and other "bonuses" (if they offer them).
My wife is (and owned a business). As far as I'm aware that information is not correct. If I remember correctly in Denmark you have to pay mandatory social security (ATP), industry injuries insurance, a sort of vocational and training fee (AUB it's called I think), another labour market insurance thing with a triple letter name, and there might be another one if you have foreign workers. Denmark may still have lower labor related costs than the rests of Scandinavia and a somewhat more flexible system but it still has some of the highest labor costs in Europe and employers take a good amount of responsibility, and that's a vital part of the system. (and to note we never thought of it negatively).
> In a country like Germany, France or in Scandinavia running a business is harder because there's an expectation that businesses can take care of their workers. A lot of red tape exists to make sure that a business can shoulder these things.
That's not true. Red tape is red tape, it serves no other purpose that perpetuating itself (and since we're on this topic there is much less red tape in the UK than in France or Germany.
If you're a business an hire someone then you have to pay their salary and any taxes to finance healthcare and other benefits. OK. There is no need for red tape for this or to make it difficult upfront to incorporate a company, just make it clear and simple to know what to pay and how to pay it when or if you hire someone.
the state takes a pretty big amount of risk and costs. Who pays healthcare, who pays maternity leave and social security in a fast and loose labor market like that? The answer in the US often is, nobody or the federal government.
In a country like Germany, France or in Scandinavia running a business is harder because there's an expectation that businesses can take care of their workers. A lot of red tape exists to make sure that a business can shoulder these things. In fact in Scandinavia eliminating unproductive firms through measures like wage compression was deliberately part of their social model to drive concentration and creation of productive firms.
There really are a lot of implications to creating the sort of environment that the US or to a lesser extent the UK has, and it doesn't work well with the economic model of most of Europe.
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