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.
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.
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.
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.
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.
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.