[Kavan]

Most of Europe is the same too. Employment laws are pretty onerous. This is great for employees and I think more or less works in mature industries and businesses (think of a 10 year employee, who gets a new boss that they dont get on with so the boss just fires them).

This stricter regulation does make starting businesses very difficult, and a definite advantage the US has over Europe.

I think the answer is combination of the two where there is some kind of threshold where new/small companies have more freedom to dismiss, but forces larger businesses to treat their employees fairly.