Termination and Employment

Brad Plumer has an interesting discussion of whether making it easier to fire workers in France will actually decrease unemployment. I can’t really say that I feel strongly either way; both positions seem reasonable, although Brad presents some solid evidence on the contrary position.

During my short residence in Germany, what struck me as contributing to unemployment wasn’t so much personnel regulations as the collection of other regulations that limited German commerce, such as laws that prevented retailers from remaining open until late hours, open on Sundays, and so forth. On the one hand, these measures were extremely annoying to someone who had become accustomed to being able to hit the supermarket at 4am if the fancy struck me. On the other, they would really seem to contribute to unemployment by prohibiting the hiring of additional workers to occupy certain shifts. When I asked why these regulations were in place, I was usually told that the limits were intended to protect small, family businesses against large corporations.

I really have no idea of how accurate my impression was, if it stands up in comparative context, or what other obstacles there might be to increased employment in European countries. Nevertheless, it didn’t make any sense to me to prohibit retailers from selling product to customers based on the hour of the day. I wouldn’t be surprised if such regulations had just as much, if not more, impact on unemployment than those that concern hiring and termination.