http://www.crest.fr/ckfinder/userfiles/files/pageperso/krama...
It costs roughly $9000 to fire a French employee for "cause" or "economic reasons."
The Impact of Firing Costs on Turnover and Unemployment: Evidence from the Colombian Labour Market Reform http://web.worldbank.org/archive/website00960A/WEB/PDF/KUGLE...
Conclusion: reducing firing costs reduced unemployment.
Except that is simply not true, and very easily proven false simply by showing countries with actual employee protection and unions like e.g. Denmark.
If you're interested in the academic research, someone above in the thread posted research links on the relationship between ease-of-firing and employers' willingness to hire. If you find those unsatisfying, this is a well-researched (empirically, not just theoretically) and uncontroversial topic among economists, so you should be able to find much more research.
[1] Country summary for Denmark economic freedom: https://www.heritage.org/index/country/denmark
[2] Country comparison: https://www.heritage.org/index/visualize?cnts=denmark&type=1...
[3] NYT article covering Denmark's ease of firing: https://www.nytimes.com/2004/12/15/business/worldbusiness/th...
> "The Danish system creates a flexible labor market," the Danish Confederation of Trade Unions said in an official document. "Danish companies are more willing to hire new employees in times of economic revival than their European competitors, who have trouble letting off workers when the economy goes downhill again."
> Note that the source of this last comment is the country's largest labor union confederation, a sign of the consensus surrounding the easy-to-fire policy.
Many jobs have a firing period of 1, 3 and 6 months, rising with the time you've been there. Sickness is a legal absence. Maternity and paternity leave is a legal requirement along with at least 5 weeks of vacation a year.
[0] https://www.business.dk/arbejdsmarked/flere-bliver-medlem-af...
On the opposite end of the spectrum, in Norway not only is it harder to fire someone, but terminating an employment contract is normally with 3 months mutual notice. So you risk bad hires, but you also don't risk essential staff members disappearing overnight very often, as serving out the 3 months notice is normal and expected. That makes companies with small teams less vulnerable in that respect.
Overall I don't really know if it makes much difference to employers. I hasn't seemed like that for me. But it makes a big difference for employees.
But at will employment also imposes economuc costs, which economists don't really care to count, like economic security, health and psychological well being, mutual respect between companies and their public, and the opportunities to do stupid image damaging life-harmful shite like Marriot did to this man.
As much racket as people have made in this thread about at-will status in the U.S., the truth is more moderate. Not all states have at-will employment. Even in those that do, there are protected classes. The former Marriott employee might easily file an age-discrimination lawsuit, for example.
But again, consider the unseen. Marriott’s management has created a possible advantage for their competitors. The man has been given his moment in the limelight, a fantastic opportunity to better himself and his situation.
Individual companies won't hire if some law hits them specifically, the same as if they're cash strapped, lost a big customer or some raw materials they need raise their price.
For a country it's loss of competitiveness and more long term. The questions are more like: can we as a country afford this law? is individual suffering worth the wealth create?
Sigh
Not universally true.
Strangely, European countries with more humane employment laws don’t have correspondingly higher 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.
Data: http://www.oecd.org/employment/ministerial/employment-in-fig...
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.
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.
No good or service is perfectly inelastic — certainly not employees.