Europe's Labor Laws Are Strangling Its Ability To Innovate, New Analysis Argues (worksinprogress.co)
- Reference: 0180828078
- News link: https://tech.slashdot.org/story/26/02/19/1924208/europes-labor-laws-are-strangling-its-ability-to-innovate-new-analysis-argues
- Source link: https://worksinprogress.co/issue/why-europe-doesnt-have-a-tesla/
The downstream effects are visible across Europe's flagship industries. When Audi closed its Brussels factory after cancelling the E-Tron SUV in 2024, severance ran to $718 million -- over $235,000 per employee and more than the cost of writing off the plant's physical assets. Volkswagen spent $50 billion on its electric vehicle lineup, failed to develop competitive software internally, and ultimately paid up to $5 billion for access to American startup Rivian's technology.
Between 2012 and 2016, 79% of all startup acquisitions tracked by Crunchbase took place in the US. The essay points to Denmark, Austria and Switzerland as countries that have found a middle path -- generous unemployment insurance and portable severance accounts that protect workers without penalizing employers for taking risks.
[1] https://worksinprogress.co/issue/why-europe-doesnt-have-a-tesla/
Oh no! (Score:5, Insightful)
We can't ignore the effects of our actions when it affects the lives of actual people in place of profits! Whatever shall we do?! /s
Re:Oh no! (Score:5, Insightful)
You don't hire a taxi, you pay for a service. The taxi driver is not your employee.
slavery ? (Score:3, Insightful)
labor laws prevent companies from enslaving the workers... oh damn, we can't have that !
It's easy to fire in Denmark (Score:3)
In Denmark it's easy to fire people. "Flexicurity" means that it's easy to fire somebody in Denmark but generous employment insurance and retraining programs means it's a much lower burden on employees if they are fired.
Re: (Score:2)
I wonder where does the money for the insurance and retraining comes. Hmmm...
Re: (Score:3)
It doesn't really matter if it's paid for by the state, corporate tax, or income tax, in the ed it all amounts to the same thing. What matters is that it's a collective arrangement, not something any individual company is on the hook for. That is what sets it apart from most of the rest of the EU.
In the Netherlands, there's a rule that an injured employee will receive 70% of their wages for up to 2 years. But it's payable by their employer - whether the employee got hurt at work, or on the ski slope o
No Throw away people (Score:5, Informative)
Unlike the US fire at will, Europeans are not throwaways.
The wealth gap between the top 1% of the bottom 50% is growing in the USA and it unhealthy. To hide this politics has become highly partisan so the wealthy can point the finger at the other side and say "see it's their fault" where as in truth it's the fault of the billionaire class.
Good on Europ for actually understanding a country, its culture, its well being is made up of PEOPLE of all walks of life, not just the rich.
Re: (Score:2)
> The wealth gap between the top 1% of the bottom 50% is growing in the USA and it unhealthy.
That sort of wealth inequality is really required for this kind of pie-in-the-sky startup culture, though. You need people who are so obscenely wealthy that they're willing to bet on the longshots, because people with more modest levels of wealth tend to stick to more conservative investments. If you want Teslas and Waymos and startup companies with corporate visions like "let's litter every sidewalk with rental scooters and see what happens" , insane levels of wealth inequality are part of the package dea
Has the EU stopped all corporate "creativity?" (Score:3)
I'll admit - I don't understand how companies haven't gone cat and mouse with this. For example, if a company wants to create a speculative product, couldn't they just fund a "contracting company" that hires people? If the bet is successful, the parent company buys out the "contracting company" - otherwise, they stop paying the other company and it just goes bankrupt.
I think it's basically "tactical insolvency."
Re: (Score:2)
> I'll admit - I don't understand how companies haven't gone cat and mouse with this. For example, if a company wants to create a speculative product, couldn't they just fund a "contracting company" that hires people? If the bet is successful, the parent company buys out the "contracting company" - otherwise, they stop paying the other company and it just goes bankrupt.
> I think it's basically "tactical insolvency."
The cat and mouse game does happen since companies do try these kind of tactics, but regulators know them well too.
If a company exercises enough control over a contractor, regulators can decide that the relationship is effectively an artificial construct meant to skirt employer's obligations. If that's the case, the company can be determined to be the actual employer of the contractors, with all obligations that come with that.
The USA could do better. (Score:1)
> The essay points to Denmark, Austria and Switzerland as countries that have found a middle path -- generous unemployment insurance and portable severance accounts that protect workers without penalizing employers for taking risks.
Even better would be a universal basic income. Then companies wouldn't need to pay so much in severance. Also it would eliminate the need for the minimum wage and various forms of welfare, including Social Security unemployment and retirement benefits. And a lot more people would
Re: (Score:2)
Even better would be a universal basic income.
I keep coming back to this.
On the flip side is unemployment benefits. They kick in after losing a job and stop when you get one. It works better, especially for people on lower incomes if it happens fast. Really fast. In the limiting case instant.
And, well, the most efficient way of doing that is UBI plus a higher tax level so that for most employed people it's a bit of a wash.
So, a few years ago I crunched the numbers. You can plot basically gross vs net income
Europe has failed to produce a "Tesla"? (Score:4, Funny)
I can live with that.
Re: (Score:2)
The car was invented in Europe, and this includes both internal combustion and electric variants. We also had the first Nazis. Tesla is just another Nazi electric car, and even its name is stolen from a European inventor.
They were designed for a different situation (Score:2)
They make a bit more sense for an established company that doesn't change
They fail catastrophically for risky startups
Europe is such a drag (Score:4, Interesting)
Did you know that in the EU you cannot "restructure" your company by firing 50+ years old only to hire 30 year olds to replace them?? It's shocking.
I keep dealing with US manager that just don't understand employment law or rights. They don't understand that they cannot just fire someone they hired because they can't really do what they themselves have hired a candidate for in France.
They get so confused when they want to make people redundant in Germany but the person they want to make redundant also has to agree or they cannot proceed.
Honestly I'm all for innovation and entrepreneurship and corporate profits but you mustn't be allowed to shit on staff. They are not serfs, they are not plebs, they are human. The fact the US has such a ruthless style of employment is also the reason why some people need a job and a "side hustle" and work mad hours to afford crackers.
Fuck your greedy, love and let die BS excuses around "innovation" by treating people like cattle cause "ugh sorry all 900 of you on the zoom call are fired, cause margins, good luck"
Maybe some people love stress because job security is minimal but if more Americans come to work in Europe I have a feeling they'd prefer it. Heck even us Brits look at the time off, benefits and protective labour laws in EU states with envy!
Finding the balance (Score:2)
The EU is probably too strict, while the US is too lax. Canada may be one country with a better balance. At the very least, the EU countries need to loosen the laws up a bit for business with less than 6 people, since one "unfireable" employee can end up taking down the whole company.
Re: (Score:2)
Can confirm as both a former employer and former employee, Canada has a good balance. Also, healthcare insurance is not tied to employment here, so employees don't have to stick it out at a hateful job and companies don't have to spend massive amounts on health insurance.
And yes, there should be nuances in the law based on company size and maybe also on how long the company has been in existence. A startup in its first year of operation, or a small business with 5 employees, should definitely have more
Re: (Score:2)
There are no common labour laws across the EU and it varies quite a lot between each member state.
Ability to innovate? Give me a break! (Score:2)
Labor laws make it devastatingly expensive for companies to unwind failed bets? Well, cry me a river!
Wasn't profit supposed to be the reward for the financial risks taken? I mean, you invest money and, hopefully, you get a lot more money in return. Things go bad, you lose your money. Simple as that.
It seem to me that these great entrepreneurs want the rewards but none of the risks, but bad bad labor laws keep getting in the way. Good thing that there's always someone ready to teach us so proper busines
I think we've had enough innovation. (Score:2)
Maybe let's cool it for the next few decades so we can get our money back from these tech corporations.
Fight fire with fire (Score:1)
Employ AI HR bots to fact check and verify if the information presented before it is touched by humans.
Try being the victim of wagetheft (Score:2)
The labour laws in Europe are useless anyhow. The UK might be the only place where I have been able to use them ("Constructive Dismissal") against a huge company and won. In Norway you can freely steal employees' wages and get away with it. It's such a cruel joke when your life depend on the next month's salary to come. I've had 2 years of severe depression due to being a victim of wagetheft and the police and nobody else in the government caring enough to actually upheld these laws. I got scammed out of a
Re: (Score:3)
My (California) company had an action taken against us for paying straight-time overtime (vs time and a half) for exempt employees (employees not eoigible for statutory overtime). It is common practice in our industry; many projects are compensated hourly by our clients, and while we tried to avoid making people work extra it was sometimes necessary). We also pay annual bonuses.
The letter of the law was pretty clear in our favor; the "judge" disagreed so we had to pay about 5x the difference in straight tim