Shocking news from today’s Sunday Telegraph:
Dutch job disease: how labour rights have undermined the Netherlands
Sacking an employee in the Netherlands is no easy feat.
Ask many managers and they will explain to you the nuisance of having to apply to the courts to obtain a “dismissal permit” for an underperforming employee.
Even if a worker has agreed to leave, they then have a two-week cooling-off period to possibly change their mind.
The process is so arduous that the Dutch are deemed by the OECD to have one of the strictest worker protection regimes in the developed world.
This might sound unambiguously progressive for the Netherlands, and a potential inspiration for Deputy Prime Minister Angela Rayner as she seeks to enhance workers’ rights in the UK.
However, for plenty of workers, the Dutch system has backfired.
Underpinning the problem is the fact that many bosses are increasingly reluctant to hire workers given the difficulties they later encounter when trying to sack them.
The result is that more than one quarter of Dutch workers are employed only on temporary contracts, far more than any other rich country.
They are lucky to be on temp contracts. The sensible thing to do is ship all the work overseas. The internet is transformative in that respect. That leaves personal service workers and hands on workers (robots anyone?), and it just means they will become much more expensive. I have a friend who ran a start up company in the tech sphere. One of his employees stopped turning up. It took then three months to track him down when they found him he was in jail for fraud, which apparently hampers your ability to turn up to work on time. It still took them six months to fire him. I also have a friend who makes his living by stripping down the job nurses to just the hands on part, shipping all the rest to nurses in the Philippines.
Fortunately, here in the land of the free employment is still, in most places, at will, so you can pretty much fire anyone for any reason except for racism, sexism, and some of these “public policy” things. This freedom mainly benefits employees in the US since it is far less risky to hire people. And just to be clear, hiring people is one of the riskiest things a business does, especially a small business.
Of course that public policy thing does create the quiet problem that nobody says — namely that it is riskier to hire black people and women irrespective of their capabilities. Not due to anything that they have done, simply because public policy makes it harder to fire them and therefore riskier to hire them. I have, in the past, interviewed and hired a lot of people in my life and the simple fact is that you have to document the crap out of the process, especially so with these targeted groups, as a legal protection against lawsuits. Which is truly quite unfair to these supposedly protected groups.
Again, if someone overseas can do the job you’d be insane, possibly in breach of your fiduciary duties, to hire American/British/Dutch.
I would suggest that actually *most workers across the world are employed in temporary contracts* – ‘at-will’ employment.
This is the preferred way that employers and employees like to arrange things (hence why its the most common arrangement across the world) and the Dutch have ‘formalized’ this in contract as a way to route around a legal regime that prohibits them from doing what they want to do.
This isn’t a ‘the employers are exploiting loopholes’ thing, this is the desired social milieu being restored after the government tried to destroy it.
‘Law’ is how people have already agreed to behave, ‘legislation’ is just codification of that behavior and if legislation doesn’t match law then people work around the legislation, not just meekly submit.
It’s pretty mind-bogglingly obvious to people who understand basic economic principles that making it hard to fire workers will
make firms reluctant to hire more workers, making it hard to evict teneants will make landlords reluctant to take tenants,
requiring employers to provide “free” benefits will end up reducing base salaries by about the cost of providing those benefits, and
so on. But of course, most people don’t understand these principles and don’t want to, so you can’t even convince them after the
fact that that’s what happened. And of course the people that mandate counterproductive policies will seldom suffer any consequences
for their actions, particularly not if they are part of the permanent government rather than the elected/appointed government.
The question is, what, if anything, can be done? A long time ago I used to believe that it was possible at least in principle to convince people of things that are quite obviously true, but that just isn’t true. Most “normal” people will (quite sensibly) reject the evidence of reason and their own senses when
it contradicts what they are “supposed” to believe. There’s no practical advantage to having an unpopular opinion.
It seems to me impossible to convince people of basic economic laws. But economists are a lot worse
@george m weinberg
The question is, what, if anything, can be done?
I was reading along nodding to what you were saying George, but this question kind of stuck out to me because I think there is an assumption in this question that is unhelpful. What you are really saying here is “what can be done to convince enough people to change their minds, and use the political process to change these frustrating laws?” The answer to that question is “nothing, it is a ratchet, and we are stuck with it and whatever else is worse to come.” I can think of very few historical precedents that say otherwise, and most of the ones I can think of involved people dying or being destroyed.
But I think if we think of this question differently as “what can be done to prevent these things from negatively affecting me and my loved ones?” Then there is a LOT that can be done. We are specifically talking about employee law here, so the first thing that can be done is to stop being an employee by finding some other way to make a living. Or, if you are an employer face the reality that you have to deal with that and stop hiring Americans/Brits/Dutch to work for you insomuch as you can. Or, as apparently the dutch are doing, rather convert all your American employees as contractors. Pay them more and get rid of these stupid stipulations. (This takes some doing because the IRS/HMRC will try not to cooperate.) Or, ultimately move. In the US some states have much better employment law than others, or alternatively move to a different country entirely which does not do this to the productive members of society.
I’m a libertarian. I think government is the problem not the solution. So the solution to these sorts of issues is private action not fruitless raging or even organizing against whatever brand of tyranny the government is trying to impose on you. Surely it is much better to innovate yourself than imagine that you or I can wield the heavy hammer of government to our own ends?
Exactly. This is why so many people work as “digital nomads” these days. To some extent, I fall into that category.
More context would be useful.
What’s the wealth gap between rich and poor in Holland compared to the UK?
https://www.statista.com/statistics/1416753/inequality-in-europe-wealth-distribution-by-country/
George,
A few years ago, a U.K. journalist at Reuters, Tom Bergin, produced a book called Free Lunch Thinking. He attacked the ideas you’re defending here. For example, he produced reams of data claiming to prove that restrictive hiring and firing doesn’t damage employment, and that high marginal tax rates don’t blunt growth.
There are quite a few reasonably intelligent and capable economics writers who argue that incentives matter less than supposed, that regulations are actually good for growth and innovation, etc.
Those of us on the free market side of debate need, I think, to do a better job at explaining why the sort of arguments that the Tom Bergins of this world make are wrong. Because at the moment, those arguing fir ever bigger government think they’re winning.
This is just another symptom of a **ahem** Marxist (Magical thinking) economic system. A job is now a right, not a privilege. Employers are evil capitalist scum who get great delight in the misery of the downtrodden proles.
And, of course, the utter, utter inability to consider tradeoffs, let alone to be honest about them.
This kind of employment protection is amongst other irritants, just another cost to the business. Cost = pain to the business. Therefore avoid the cost. Who’d have thought “You make something more expensive and you get less of it?”
Mind you, TBH I am surprised the demise of the permanent job hasn’t caught on much more widely than it has.
But think of the new company opportunities that will spring up!
I can see free-lance contractors who become experts in “persuading” reluctant employees to “quit”. For a small fee they’ll target, excuse me, “research” non-productive (or counter-productive) employees to find other alternatives. After all, if someone has both elbows shattered it becomes darned hard to work, much less to wipe one’s self.
Nothing here but new jobs springing up everywhere!
More of the same…
https://www.zerohedge.com/political/california-homeowners-are-losing-their-insurance-heres-why
Why would this matter?
If everyone in the Netherlands were dirt poor the wealth gap between rich and poor would, of course, be zero.
Why is the wealth gap of any interest at all?
This is part of the reversal of the word “right” or “rights”.
This used to mean restrictions on government power – but not it means goods or services from government, or things that government forces private employers to give people. In this case the “employment rights” mean that people who would otherwise be employed are not employed (are forced on to unemployment benefits, or other benefits – for sickness or disability), or are employed in less productive (and less highly paid) jobs than they otherwise would be.
The transformation, reversal, of the words “right” and “rights” is older than Karl Marx – it goes back (at least) to Jeremy Bentham (indeed it could be argued it goes back to Rousseau and Thomas Hobbes) – who dismissed limits on government (or private criminal) aggression against, violation of, the bodies and goods of people as “nonsense” or “nonsense on stilts”. Holding that the role of government was to maximise the “greatest happiness of the greatest number” – by any means it thought fit.
So when people such as K. Harris or Governor Walz say they support “rights” they DO – if one understands their language (“learn my language” said Rousseau – for, like Thomas Hobbes, he redefined key terms – reversing their meaning), they mean goods and services from government, or goods and services that government forces private employers to give, NOT limitations on the size and scope of government – which they believe should be totally unlimited.
Their philosophy leads to economic and cultural (societal) collapse.
For most of my life I believed the left (for want of a better word) did not know what their philosophy leads to economic and cultural (societal) collapse, but I have come to the conclusion that they do know – that this is their intention.
They may still tell themselves that they wish to create a wonderful new society on the ashes of the old “capitalist” society – but they do not, not really.
At this point (perhaps always) destruction is an end-in-its-self.
We are facing evil.
A Collectivist reading this post would say “the solution is simple – ban temporary contacts, and make all employers give long term contracts with all the worker-rights included!”.
They would then pretend that they did not know that such a policy would lead to MASS UNEMPLOYMENT.
Paul,
Sadly, I suspect you are right. The fact that the left’s policies do not work has been shown time and time again. One must therefore conclude that they are either stupid, or that their policies are working, just not in the way we would define “working”. The two options are not mutually exclusive.
JohnK – yes indeed.
And it is not just the left who know, but do not want to know…
For example, I just posted (on Facebook) how an FBI “whistle blower”, someone who testified, on oath, to Congress about the despotic behaviour of the government, was treated – how they had their income stopped, were threatened, and even not allowed to accept charitable donations to feed their family.
In a healthy society the media, at least supposedly liberty supporting parts of the media, would be all over that story – the man would be interviewed, the despicable FBI would be shamed – and so on.
But not a bit of it – in practice the media do not want to know about government despotism and corruption, and if you shove the evidence in front of their noses – they just turn away (just as they do with the rigged elections).
It is not that they do not know – they do not WANT to know.
So it is pointless to gather evidence, such as sworn testimony, and present it to the media (including the supposedly pro liberty parts of the media) – because they do not WANT to know.
After all if they spread the truth – they themselves would lose their jobs and would end up on the street.
Sacrifice everything for the truth? Carry a firearm at all times because certain people want you to “have an accident” or “commit suicide”?
Sadly the media, even our friends in the media, are not that sort of people – which is understandable enough.
Heroes are not common – sadly heroes are rare. And, yes, for understandable reasons.
What did they expect would happen?
Exactly what did happen.
Didn’t Spain have this problem decades ago? (And might still, but my point is this was A Known Problem People Talked About at LEAST 20 years ago.)
Do they never learn that “hard to fire” [or “hiring means you go over a threshold and suddenly have many more regulatory issues”] means “don’t hire”?
It’s so obvious and easily figured out and universal that of course every government is sure it won’t ever happen.
It’s been that way for at least 40 years.
The problem with thinking that you have a property right to a job is that you have to acknowledge that your employer has a property right to your life.
I’d prefer an arm’s-length relationship, instead of a mutual-slavery one.
Sigivald.
Yes indeed Sir – Spain was famous for regulations, famous for centuries.
The old British saying was “Spanish practices” – meaning endless rules, especially in the workplace.
But it goes back to LAND – the reason that Spanish farming did not modernise (either in Spain or in a lot of the Latin America – even after independence) was the legal difficulty of removing tenants.
As long as tenants paid “customary rent” they could not be removed – so farming could not be modernised, and without modern farming there was much less money for industry.
In England (England – not Britain) the Agricultural Revolution came before the Industrial Revolution.
It had to. The food and the money for the Industrial Revolution did NOT mostly come from “slavery” or “Empire” – it mostly came from English farming.