Strong laws that aim to protect labour seem to end up being contra-productive. I've seen it in Germany, for example, where it's pretty difficult to fire full-time employees. Berlin startups therefore either force their workforce to be self-employed, or, routinely hire people with a 6-months probationary period just to fire them the week before.
History teaches us what happens without any labour protection, so that's not an option.
But a viable alternative to labour protection is a strong welfare system. That's the classic Denmark vs Germany comparison. Taxes are high in Denmark, but it's easy to hire and fire somebody. Which hurts business more?
Labor protection is much more than protection against firing.
A society needs a sane amount of labor protection. Too much and there won't be jobs (and the economy will suffer), too little and the people will have no power over their lives (and the economy will suffer).
Worse still, that optimum point will change all the time as an economy matures. And I don't think anybody has any good procedure for measuring it.
Income tax is high in Denmark, but the total tax wedge is much lower than in Germany (36.6% in of labour costs in Denmark vs. 49.4% in Germany for a single worker of average salary) [1]. The total employee contributions are similar - in Denmark 35.8% (as percent of labour cost), vs. 33.3% in Germany [2]. The rest is borne by the employer - 0.8% in Denmark vs 16.2% in Germany.
I don't know how this translates into differences in welfare spending (so it is possibly that Denmark spends more on welfare but that Germany just spends far more on other things - I haven't looked), or why the differences are so large, but of the OECD countries, Germany comes in only after Belgium (who always throne high above the rest on these lists) and Austria when it comes to the size of the tax wedge relative to total labour costs. Denmark meanwhile comes in near the OECD average, which was 35.9% in 2015.
Look at the US's GDP history. It started growing faster than Europe at the end of the 19th century. And you say it only enriched the top of our society? First look up what median means, then realize that the US's median income is 50% higher than Germany's. For a population several times larger and several times more diverse.
I thought it was a good point to bring up. Comparing raw income doesn't mean anything -- you need to at least take cost of living into account. 75k is barely livable in SF, but quite comfortable in the Midwest, etc.
If Germans are making less but are worth more... There's interesting things going on that probably need to be taken into consideration in such a conversation.
PPP (Price Purchasing Parity) is the definition of cost of living adjustments. If you see PPP, then that's already been factored in as well as the science can.
Assets minus liabilities doesn't capture the full picture.
If a poor person in the US has a $3000 car they might be poorer on paper than a middle class Singaporean who takes the bus but the latter would have to spend $100k to enjoy the same transportation lifestyle as the former.
Similar for things like detached houses and takeout food which are basic in the US but luxury items in most of the rest of the world.
> but the latter would have to spend $100k to enjoy the same transportation lifestyle as the former.
What exactly does it mean to "enjoy the same transportation lifestyle" and why would it cost them $100k? Singapore is a tiny island with fairly comprehensive public transport, and relatively inexpensive taxis. What exactly is this middle class person missing out on?
> takeout food ... luxury items in most of the rest of the world.
What makes you think that? Takeaway food is readily available in every developed country I've been in, and usually even cheaper in developing ones.
That was my source also and yes the actual difference is a mere 30% more - I was eyeballing it. My point wasn't to get into a pissing contest with who is richer, my point was that the US is no less equal than Germany and no one is bitching about how Germany's economy only enriches the top.
I also linked to statistics which show that most European countries have significantly higher median wealth than the US. (Although notably not Germany for some reason). The difference between the mean and median wealth is also notably high in the US, which suggests greater inequality.
You can't really use slavery or sweatshops as an argument one way or the other here. Sweatshops were by no means limited to the US.
Nor was slavery, for that matter. The main differences is that US slavery was domestic (and mostly contained to the south)[0]. Whereas European imperial powers (England, France, Belgium, etc.) outsourced their slavery, practicing forced relocation of people within their colonies and engaging those colonists in forced labor with the threat of violence[1]. That continued well into the 20th century.
[0] Though not as much as people like to think - the North was very happy to make money off of the slave trade, as long as they didn't permanently hold those slaves.
[1] One can try to engage in the abstract argument of, "well, is it philosophically better to enslave people within each others' native lands, rather than to bring them all to the seat of the empire and enslave them there", but that's a hair that's not worth splitting, and a far cry from the original statement.
> America became the richest, most powerful country
More accurately, this happened because every other power was laid to waste by two successive world wars. You'd have been hard pressed to find a standing factory in Germany, Britain, or Russia in June of 1945.
Further, the US has had several boom and bust cycles people only really hear about 'the great depression' but there have been plenty of major slumps in the US economy for example around the Civil War. So, a nominal lead in good times is not that meaningful.
So it was only during WWII that the US went from near parity to a massive and sustained lead. And it did not take that long before we gave that up to either China or the EU depending on how you want to slice it.
Uh the US is a far bigger place? The civil war kicked off our version of the second industrial revolution, and the frontier (see ailroads) acted as starter fluid.
Obviously US was looking great at that time, hence the immigration boom. (As Mark Twain went for in the name, the guilded age did have plenty of issues, but so did Europe. Class was strictly more palpable there, generally speaking.)
Then, as others with that firm foundation, we surfed tsunami of two world wars that swallowed everyone else. That seal Ed the deal (and the second got us out of the great depression).
I'm being a bit hyperbolic, but I think my point stands that the US had many more factories left after the war, not to mention working age men. The US also had the Marshall Plan to repurpose that capacity into making products for domestic and foreign consumption.
The sum of power or wealth is not a very sensible metric, unless you are a country and not a person. The per-capita median of power or wealth is a more sensible metric. A specific lower percentile may be even more sensible.
To be fair this happened during a period of high unionization and a top income tax rate approaching 80%, or more. I'm not saying those things caused the growth, but they didn't stop it obviously.
Also your comment is dismissive of things like income inequality, companies hoarding cash instead of investing it, healthcare access, quality of life, stagnant wages, etc and other things have the US hasn't solved but has been better addressed in more liberal nations. That high GDP is nice, but it doesn't stop poverty in the south side of Chicago nor does it create jobs in the rust belt. Maybe if we took these issues more seriously we wouldn't have elections where loud-mouth populists win due to electorate anger and instead have a system of government that reflects the needs of the people more than corporations.
Well, that's were one makes a conscious choice to live below their means, and save money for a while, in order to build enough capital to bankroll the new enterprise. Or one might go the "friends, fools, family" route. Or heck, even work a new thing as a nights and weekends project for some period of time, then go out and raise money from angels, or early stage VC's.
The point being, there are options and - to some extent - the onus is on individuals to take charge of their situation and improve if, if they're dissatisfied.
Ahh, the whole, "If your company is mistreating you, it's your fault" argument. So if I am forced to stay at a job due to having a family or not having a "Safety net" due to getting cancer or something, it's my fault for not being able to leave?
The US is one of the very few countries in the world where its possible to roll up a bankroll, quit your job, try to do a startup and fail, and subsequently still be able to get another good job.
And a huge part of that is how cheap and frictionless hiring and firing is (relative to other countries).
Not really. Not to mention that there are infinitely many ways to spend time in a more rewarding (and for many also more socially useful) way than TV or a dayjob.
Maybe. I've always enjoyed whatever corporate employment I have had, because I could build things using much (!) more expensive equipment than I could afford to set up on my own. Maybe I've been fortunate - or maybe I'm just wired differently.
The things I enjoy building don't require expensive equipment. Just a little bit of time - which is spent working a 9 to 5. Most people work their 9 to 5 to pay their various bills (Rent, Food, Utilities, Internet, Entertainment). I think it is important to enjoy your work or else you'll be unhappy. But I don't think it's uncommon to enjoy your hobbies more than your work.
For example - I love languages! I wanted to become a polyglot in high school and speak several languages well enough to hold small talk. Practicing a language to fluency without residing in a country it is spoken is a lot of effort and requires a lot of self-motivation and time dedication. I rarely study anymore and am no longer confident in my ability to hold small talk in German or Portuguese. It's extremely satisfying to learn about various cultures, their history, and being able to speak with natives! You learn so many things about the world when you expand your ability to explore other cultures. No work to me is more satisfying.
But cultural and linguistic anthropologists, after putting themselves into debt from college, hardly make more than a McDonald's Manager. Not to mention work is sparse and difficult to find - nearly impossible outside of academia. I went with a job with more job opportunities and a higher base salary so that I could afford my more expensive hobbies like playing video games and actually visiting other countries to learn about their cultures. Something I wouldn't be able to afford to do if I had my "dream job" instead of a "well paying job".
But that leaves with me less energy and less motivation to study the foreign languages I would like to learn. I had to cut it down from twelve languages to three languages and I'm still not fluent in the two I'm studying. It's just too mentally exhausting to go from my day job to studying foreign languages during my free time day in and day out.
That makes sense. And it resonates with me. When I was young, I was interested in both Japanese and Russian. When I graduated, my first job out of college was with a semiconductor company in Japan. My experience, like your observation, was that I'd never be able to achieve any level of fluency unless I resided in-country and conducted my daily affairs in the language.
In Germany It is also called "Katzentisch" (cat table). This practice got famous during the privatization of state enterprises. It was later supplemented by unsuitable tasks. For example woman had to handle heavy packages without proper equipment.
Those situations certainly happen; whether it's contra-productive depends on the overall effects, not just whether some cases exists.
That said, some of these are just a result of incompetence by the legislators and/or courts. It's been a few years, but I've seen organizations in my country trying that "self-employed" and the Labour Court straightened them pretty quickly when they tried to fire someone. If you have a boss, fixed place of work, working hours, etc, you won't fool anyone.
The six-month probationary period is mostly fixed by not allowing it to be constantly renewed. Replacing all your workflow twice a year (even if gradually) is a heavy tax.
