[dangus]

The truth of the matter is that companies aren't monetarily incentivized to avoid layoffs.

Layoffs cost almost nothing. Companies aren't required to pay full salaries or provide any healthcare/benefits for any reasonable period of time after a layoff.

I think even the 3 month notice period from the WARN Act is a pretty crap amount of time to provide for employees who have been terminated.

For a software company especially, they can pull a Twitter and leave the business on autopilot with the code that has already been written and axe most employees. It's not really a big deal to get rid of employees then hire them back 6 months later, but it really should be.

Also, companies like Twitter prove that the WARN Act can just be outright violated while employees are left to fight court battles they can't afford nor have time to fight.

Then you look at unemployment benefits where in most states the whole process is overly bureaucratic and wasteful system that doesn't come close to anything resembling a replacement for salary. I think that whole system would work better and be able to send more money to the unemployed if it was just automatic payments without all the overhead of having people on staff processing applications and answering phones to deal with questions, appeals, etc.

Instead, just continue all terminated employees' salary and healthcare benefits for 3-6 months after termination automatically on the employer's dime. Implement something like that and watch as our boom and bust economy gets a lot less mountainous. Companies would actually have to try and make an educated choice about whether or not to hire someone.

Companies should only be able to dispute unemployment in cases of clear and obvious misconduct. I don't even think that low performing employees who showed up and made some level of half-assed effort should have unemployment benefits revoked. Isn't the hiring of a low-performing employee the fault of the employer for not sufficiently vetting the candidate?

Maybe what I'm proposing is too extreme, I don't know, but I think the status quo is way too lenient on businesses.

[bg24]

"The truth of the matter is that companies aren't monetarily incentivized to avoid layoffs."

Very nicely put. Fixing this will help lot of employees.

[chongli]

How do we fix that? Require companies to pay a large severance? Then companies will be heavily disincentivized to hire in the first place due to the risk.

[vineyardmike]

If we required companies to pay a massive severance, then it would disincentivize hiring to an extent. You'd still need to hire as your business grew, it's unavoidable.

If you made hiring more risky, companies may keep their employees for longer, and treat them better since hiring was a gamble. Why hire someone, who could be a liability, when you can retrain an existing employee and invest in their future with you.

[chongli]

I could just as easily see companies treating their employees worse if hiring is made more risky. You won’t get the big severance payout if you quit. At the same time, it’s harder to get a new job somewhere else if employers are more reluctant to hire. This situation seems like it could lead to employers mistreating you and you having fewer options to get out.

No, I think barriers to hiring lead to market failures. This includes everything from severance to health insurance and other benefits. This is part of why the U.S. has such a hard time trying to introduce a public health care system: it takes away from employers’ ability to keep people working at a job they don’t want.

If there was no friction at all for employment, if people could join a company one day and quit the next day — and if employers could do the same — without worrying about losing health care or the ability to pay rent, then the labour market would be far more of a free market than it is today. Working should be 100% voluntary and free from coercion. That would also lead to higher pay for workers because those who don’t want to work could not be forced to do so.

[inglor_cz]

You would move to a different jurisdiction. US has plenty of those.

Looking at places like France or Italy, where protection of existing employees is very strong, yes, it makes companies wary of expanding. It also motivates automation, which might not be a bad thing.

[bart_spoon]

They’d be heavily disincentived to hire unsustainably. Every business has to hire to some degree. The issue is when businesses hire masses of people the don’t need in hopes of it somehow translating to growth, only to pull the rug out from said employees when it doesn’t. Especially in the US, where healthcare is tied to employment, and at a time where upper management is adamantly insisting that in person work is necessary, meaning employees must physically uproot their lives to be in proximity to their job, there needs to be more assurances for employees, and not just leaving them to the whims of whoever happens to be in charge that quarter as they throw spaghetti at the wall and hopes something sticks that will please investors.

[selimthegrim]

I discovered the iPhone’s four hour call limit while on hold with the Louisiana unemployment system

[abledon]

on-demand scalability mindset creeped over from spinning up VMs into their quick hiring/firing strategy

[buck4roo]

Vote parent up.

Accurately describes the public costs of private for-profit businesses' whipsawing the labor force, and foisting all the consequential costs of periodic waves of unemployment onto the public.

[Panzer04]

You want to make it even harder to get a job? The better the benefits you mandate for firing/leaving employees, the more onerous companies become about bringing on more manpower (and eventually, lower wages as a whole since they have to fund an additional 10% or whatever whenever someone leaves).

You're arguing that companies should implement these measures at the cost of just hiring people? "Companies would actually have to try and make an educated choice about whether or not to hire someone." - Isn't it already a meme that people get 3-6 interviews just to get hired at some places nowadays? and you want to make that worse? Maybe I'm reading that wrong, but employees aren't the big losers in situations where companies are doing layoffs - companies are. If they had more disciplined hiring practices they wouldn't be hired (or, more likely, wages as a whole would be slightly lower because of reduced demand) These kinds of benefits aren't free, and I don't think it's unreasonable that employees bear some responsibility in terms of saving up or whatever if they have to be let go.

All that being said, I'm not against a couple of months of wages/warning, just realize there are costs to this (really, I'm probably arguing most against 3-6 months - that sounds like a really long time to me; It feels like a couple of months should be sufficient in most cases).

[buck4roo]

Re: shorter benefits

Every corporate downsizing is an example of a "private decision" with clearly visible public costs, unemployment insurance payouts among them. Social and emotional distress have a cost, not just to the employee, but their social group and family.

But, did I catch your opinion correctly? You believe we(society) are(is) providing unemployment benefits for too many months?

In your mind, who benefits from decreasing that assistance benefit? Cui bono?

[Panzer04]

Obviously the employee being let go gets the biggest benefit - but those rights aren't free, is all i'm saying. It leads to more onerous interviews, a more stagnant and slow-moving economy, etc. eg. 6mo of guaranteed severance if the company lets you go just seems huge to me. Obviously degrees to the implementation, but still, I feel like it's a huge loss in flexibility to the company, and economy as a whole.

My presumption is that companies will generally be more reluctant to hire when severances are higher, and vice-versa. You're probably not really winning anything on average, with the inexperienced losing out the most in terms of just trying to get any job at all given the possible expense to most companies. Small companies even more so, given they'd be less able to absorb the cost of those benefits.

Anyway, can speculate all I want, I'm just saying there's no free lunch.

[dangus]

This idea you bring up that the jobs will evaporate when businesses are regulated sounds logical, but it’s a trap.

McDonald’s didn’t wait for the minimum wage to go up to be motivated to install automated drink dispensing machines and self-service kiosks. In fact, the minimum wage adjusted for inflation was decreasing during the entire time period in which those innovations were deployed.

On the other end of the labor spectrum, companies like Meta had no problem hiring thousands of excess employees during a period of high wage growth and scarce tech talent.

When labor generates revenue, companies will hire regardless of regulations. When labor is unnecessary for revenue, no regulation will prevent a company from downsizing.

Extra, guaranteed severance pay and a reduced unemployment insurance bureaucratic burden would be a godsend for terminated employees. I argue that for most businesses it would be a minor adjustment to their standard operating procedures.

An analogy to your point: “Cars will be too expensive if safety standards are required.”

While it’s true that cars are more expensive than they would be without those safety features, the market has adjusted just fine and the societal benefits outweigh the drawbacks.

[Panzer04]

Ultimately though nothing is free. The cost of those extra rights will come from somewhere else.

In Australia we have superannuation. The government is raising the mandatory super contribution soon from 9% to, idk, 12%. Some people act like that change is free, but that's obviously not the case if you think about it. All that'll happen is regular wages are reduced a little such that a person's total compensation is basically the same in the end.

I contend the same will be true of generous severance policies, especially those imposed on a global scale. Some of these things are worth fighting for, I'm not sure huge severance periods are one of those things, personally. At best something that scales with experience/time at a company (eg. half a month of severance per year of experience, or whatever value fits your conception of the idea), so those more attached to a particular position have more time to adjust if they are let go.

[blippage]

I'm not keen on the whole US model of "mandated psychopathy".

From what little I hear, the Germans seem to have found as good a balance as ever is likely to happen. There is good worker protection whilst industry is still being strong economically. Perhaps we should be looking at the way they do things.

Formerly in the UK, the chocolate-makers Cadbury was founded by a Quaker who had a strong sense of social responsibility motivated by Christian convictions. They were a profitable company who were taken over by Kraft.