One of the advantages of the USA is our more flexible labor laws when compared to most European countries. It is much easier to hire/fire people here and as a result companies are able to ramp up much quicker during growth spurts, knowing that if a downturn occurs they will be able to shed unneeded workers fairly easily. It is not so simple in countries like Germany, the Netherlands, France and others. One of the first reforms that Ireland instigated, leading to their remarkable surge to highest per capita income in Europe, was to make it easier to fire people without having to pay them severance. A remarkable thing occurred. When companies found that it was easier to fire people, they tended to hire more…resulting in long term gains for everyone.
The result of this difference in policy can be seen in unemployment rates. Whereas the USA currently has an unemployment rate of only 5.1%, most of the European countries are in the double digits.
Another indicator of the impact of this policy of rather open employment is the percentage of workers who are part-time. In the USA it is 13% compared to 35% in the Netherlands, 24% in Britain, 21% in Norway, 20% in Germany and 13% in France.
Our economic and fiscal policies continue to shine when compared to other industrialized countries.
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