A chart at the Economist compares the average job tenure of developed countries. At four years, the United State has the shortest average tenure by far, with the British working more than double that duration, and the Greeks working over 12 years at the same job. No doubt that many will use these numbers to condemn the U.S. for not protecting “the rights of workers.” In most Western European countries, employers can only fire workers under certain legally-defined conditions, and only after a lengthy disciplinary process subject to independent appeal. Putting the morality of coercing employers into lifetime contracts aside, do such “protections” really help workers?
The official French unemployment rate is roughly double America’s, with unemployment among young Frenchmen at about 20%, and lasting much longer on average. The correlation of high levels and prolonged periods of unemployment with laws meant to protect against unemployment might seem surprising to someone who advocates fixing social problems with legislation.
The glaring problem with the socialistic attitude that society can be improved by replacing voluntary economic activity with a coercive regulatory state is that human beings are not cogs in a machine. They do not passively follow new regulations, but proactively respond to incentives. Faced with the practical impossibility of firing unproductive workers, employers would rather not hire them in the first place. They can hardly be blamed for this, for their alternative is to play a game of Russian roulette and risk being bankrupted with unproductive or even counter-productive employees. They must try to find people who are passionate about their jobs because once hired, they will earn a salary whether or not they work for it.
I am personally grateful to live in Texas, an “at will employment” state, where either party can terminate employment with no liability. My career success would not have been possible if I weren’t so easy to fire.
As I was nearing the end of my master’s degree, I managed to obtain an exclusive internship that promised to jumpstart my career. Due to a combination of a lack of social skills and planning, I had failed to network with employers, peers, or professors, and managed to swing the internship on the basis of my technical skills and/or academic record. However less than two weeks before my internship was to start, the company suddenly reneged on the internship offer. With just a few months until graduation and no personal connections or offers on the table, I started to wonder whether I was any better off than my friends and classmates who went back to their parents with useless liberal arts degrees. In a similar situation, most young Europeans continue living with their parents for decades and accumulating more useless degrees.
I was not in Europe, and so I was able to do contract work during college, and offered to do a six-week long unpaid “internship” for a think tank I had done some work for. I’m not familiar with European labor laws, but somehow I doubt that it would be as easy to simply offer one’s services in exchange for room and board with no paperwork or commitment whatsoever. During that summer, I brushed up on my skills, and was offered a low-paying, but very promising opportunity for a small startup near Austin, Texas. I had nothing but a degree and a recommendation behind my name, but there was little risk from the perspective of my employer, and so I had my first opportunity to prove my worth. A year later, I used that experience to get a better position in Dallas. Exactly a year after that, I changed jobs once more, and then once again seven months after that. I now work as a month-to-month contractor with no job security whatsoever, but a solid resume and 360% more income than that first job. Had my employers been bound by French labor laws, I doubt I could have gotten that first chance to prove my worth.
I am currently employed by a French-owned company, and my coworkers who visit the French headquarters like to joke that their associates there all have good looks but don’t seem to shower or change their clothes. I don’t know whether it’s true, but it makes sense – without job mobility, superficial characteristics like appearance become much more important when getting that first and only job, and after getting it, there is little incentive to keep up appearances.