[objclxt]

"Europe's ridiculous labor regulations do more to strangle startups in the crib than almost anything else"

Or alternatively, and this is just my opinion here, you could say that Europe's labor regulations help protect employees from unscrupulous employers seeking to take advantage.

I just don't buy the argument that EU labour laws "strangle startups". Firstly, the actual laws vary from country to country. Secondly, most labour restrictions are phased in over the course of employment. For example, in the UK employees can be dismissed without reason for up two years from the date of hiring. I doubt this is "strangling" start-ups, especially when you consider that in the start-up space many people work less than two years per company.

Perhaps you personally have had some bad experiences, but I don't go to meet-ups around Europe and hear people saying "if only we had a labor market that favoured employers more, then I could get my start-up off the ground!"

Let me put it another way: last month, the UK government put forward some proposals that would drastically reduce employee rights in exchange for companies offering employees small (£2-10k) amounts of equity when they joined. If what you say is true, you would expect companies to jump at the chance. However, the CBI (the main lobby group for British industry) was very luke-warm towards the proposals. They felt that labor laws in the UK were not "strangling" business in the UK, and were in fact an issue of secondary importance when compared to tax incentives and other financial matters.

[cmccabe]

It's difficult to make generalizations about "Europe" because each country has its own set of labor laws. From what I hear, Britain has a pretty heavy tax situation. This leads to multi-national companies setting up "dutch sandwiches" and other ridiculous tax schemes. They end up paying very little; small and medium-sized businesses pay the full amount. I'm not surprised that various business interests felt that tax reform should be high up on the government's agenda. I don't see how it in any way invalidates the need for other reforms.

I also don't see why making people ridiculously hard to fire is "favoring employees." Maybe it just disadvantages employees who are actually good at their jobs, but didn't manage to get in the door before the incompetent or unsuitable ones? I've been fired before. It's part of life, like breaking up with a significant other. Relationships that have gone bad shouldn't be forced to fester.

For an extreme example of "pro-employee" (but not really) regulations gone bad, check out Spain. More than half of young people under 25 cannot get a job, because of the gold-plated employment contracts their elders negotiated years ago. The unemployment rate for the country as a whole is at least 25% now. See http://www.huffingtonpost.com/2012/08/01/europe-youth-unempl....

Spain has a two-tier labor market where temporary employees are treated very poorly, and usually fired before various "magic dates" kick in when they would automatically get benefits. In the meantime, full-time employees are virtually unsackable and coddled. The older generation, like vampires, are living off the young.

Entrepreneurs in France are also having problems: http://www.economist.com/node/21564609

[matthewowen]

I do think that one problem with the situation in the UK is that 'getting sacked' is a real problem for your career - there's a big stigma associated with it and it can make it very hard to get your next position. If there's less of a sense of fault in dismissal, maybe that's less of a problem.

However, I'm somewhat dubious about claims of it leading to unemployment due to old and useless employees who are entrenched in their jobs - if it were, wouldn't there be more scope for new companies to emerge who weren't weighed down by those older employees? If adding a new employee did add value, wouldn't it be worth doing anyway? If those employees sacked before the magic date were in high value roles, would companies be willing to throw away their experience? I suspect that the problems ultimately stem from deeper problems than this, especially in the case of Spain and Italy - there's probably a thesis that centres around them being historically poor, agricultural countries who've artificially benefited from the EU in a way that has masked big problems in the fundamentals of their economies.