Depends on what you mean by "more humane" but U.S. has lower unemployment than OECD average, and European countries mostly have higher. In particular, France and Italy, known for how difficult it is to dismiss employees both individually and in masses, have high unemployment.
North European countries, where individual dismissal is difficult but mass dismissal (restructuring) is easy, fare better.
Germany, also with quite rigid employment laws, has low unemployment. As the dominant euro member it is basically running the monetary policy of the whole continent from its own needs.
It’s difficult to compare though, because of other factors. I believe the main one between countries like France and Italy and Germany is actually the Euro currency. It’s generally considered to be overvalued compared to France and Italy’s economies and undervalued compared to Germany’s. This makes Germany’s exports extremely competitive (at the expense of costlier imports) which has spurred on their ability to build up a huge manufacturing sector and run a massive trade surplus. France and Italy, on the other hand, enjoy cheaper imports at the expense of less competitive export industries, and unsurprisingly have a trade deficit. Differences in inflation rate, etc. between the Eurozone countries which might otherwise be balanced out by flexible exchange rates can’t be. Instead you get ‘internal devaluation’ which often means higher unemployment.
How federal systems get around this (like how all the states in the US using the same currency) is having the Federal Government tax and spend which can balance a lot of that out. Europe doesn’t have that, but eventually will have to or split back into individual currencies.
I believe this is also why gold standard systems have always failed eventually too - they require fixed exchange rates and even with rebalancing every now and then you can’t be as effective as a floating exchange rate.
I wonder why you get downvoted, because your comment is reasonable and in good tone even if one were to disagree. I happen to agree: of course the ease of dismissing employees is far from the only factor impacting employment in a country, and the euro structure of fiscal union without transfer union is clearly having problems.
You have the causality reversed. All of the things you enumerated are caused by the relative economic strengths of those economies. Those relative economic strengths are themselves caused by (in large part) by their regulatory regimes, particularly with respect to things like hiring and firing.
I’m not saying that regulatory environment doesn’t contribute, but the monetary aspect has an amplifying effect.
Germany’s trade surplus wouldn’t be able to be anywhere near as large without the rest of Western Europe pulling down the Euro exchange rate, and unemployment in the trade deficit countries likely wouldn’t be anywhere near as high without (from their perspective) Germany pulling the exchange rate high.
Ah, ya then I agree. The euro is a terrible mistake. You can't have a universal currency without a universal regulatory scheme, as Europe is discovering, and countries like Britain are resisting.
At higher cost, less is demanded, and we tend to be loss averse. Driving up the perceived risk and thus the cost of firing bad employees unavoidably reduces the supply of jobs.
No good or service is perfectly inelastic — certainly not employees.
At higher cost, less is demanded, and we tend to be loss averse. Driving up the perceived risk and thus the cost of firing bad employers unavoidably reduces the supply of labor.
Indeed, it’s a two-way street, and that’s a good thing! As someone who got tired of the bureaucracy and lame policies, I took my labor and started my own company. It turns out that there is a noticeable minority of entrepreneurs, freelancers, and the self-employed around these parts.
