If you love firing workers, America is the country for you

April 30, 2014
April 30, 2014

Some people like firing people. If you’re one of them, you might consider setting up shop in the United States.

The US offers some of the fewest protections to workers anywhere in the developed world, according to an OECD analysis of employment protections for workers in 2013. Among the wealthy members of the OECD, the US ranks dead last in worker protections.

Index-of-worker-protection-against-individual-dismissal_chartbuilder

To come up with this index, the OECD analyzed a range of protections offered—and not offered, in the case of the US—to workers around the world. They looked at legislation, collective bargaining agreements, and legal developments in the countries and tried to ensure that they were scored consistently. And they specifically looked for requirements regarding severance pay, minimum notice periods, and what procedures employers must go through to fire workers.

For example, in almost all the countries the OECD looked at, individual dismissal of workers had to be in writing—except in the US, where there is no specific requirement in most states, unless the employment contract requires it.

Any index like this is best taken as an impressionistic attempt to quantify legalese. It’s inherently flawed. Laws aren’t numbers, they’re shades of grey. But the findings still paint a pretty clear picture: When it comes to hiring and firing, US workers are less protected and US employers are less restricted than in any other comparable country.

Is this good or bad for a country’s economy? Taken in isolation, it’s really hard to say. Conservatives typically argue that excessive restrictions on hiring and firing workers make for a creaky, rigid labor market and poor economic outcomes. And if you looked at the relatively high levels of employment regulation in Spain and Portugal, that looks true. On the other hand, worker protections in Germany are quite hardy, and the job market in Deutschland is humming along just fine.

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