I quit my job and thanks to the insurance changes in the US a few years ago, I was able to stay on my parents health insurance for a meaningful amount of time. It allowed me to take the chance of starting my own company. Unsure if I would have done the same, had circumstances been different.
> From a startup perspective, I've always thought it interesting that more people in Europe/rest of the world don't take chances to create companies because of the great safety net there -- at least its not as highly publicized.
There are a lot of startups in Europe; particularly France, UK, Germany, Switzerland and Scandanavia, and they are well publicized locally. I hypothesize they don't get surfaced to the attention of Americans for a few reasons:
1. Essentially no country in Europe provides businesses with as many freedoms as America does. American businesses have more autonomy, and a lot of basic facts about American life primarily exist within the framework of a business (e.g. healthcare). This makes it a less attractive environment for investors, so these startups don't get international attention as easily.
2. Partly as a result of #1, and also because of a reduced cost of living (and thereby labor) in much of Europe, startups in Europe typically don't pay as well as those in America.
This is to say that Europe has lots of entrepreneurialism, it just exists in a less recognizable way compred to America due to cultural, political and economic differences.
Europe provides a better social net, and this is funded in larger part by heavier taxes on companies. To encourage entrepreneurship, small companies are exempted from many taxes and regulations, which causes there to be a more prominent cliff as a company grows from small to large.
This is perhaps most noticeable in France, where a lot of stuff kicks in with your 50th employee, and so there are a great deal more companies with 49 employees than 50 employees.
I think a consequence of this is that European entrepreneurs tend not to result in as many large companies as American entrepreneurs, as you'll have more people who stop at a smaller size to avoid the penalties of being large.
And the sort of worries Americans have about healthcare stopping you from starting a business we just move those worries elsewhere to rent or whatever.
The bottleneck to highly publicized startups is investors. Investors are less likely to let people use their money if they think the government will get in the way of their growth.
> I quit my job and thanks to the insurance changes in the US a few years ago
So you're saying that you were able to take the chance to build a startup because of the safety net?
In this case, the employer is the parent's employer. Which means that the people who can take the risk to create startups is limited to "people whose parents have health insurance". Which excludes a large section of society, including for example poor people.
(also--and this might be a bit of a jump for someone just learning about inequality of opportunity--but a fun thing to research online is "why is the US the only country with employer-based health insurance", especially once you discover the answer is "slavery")!
I actually confused my facts here - it's tipping I was thinking of that comes directly from slavery. Employer-paid health care just _continues_ because of racism, as opposed to being created by it.
IMHO, universal healthcare and childcare would indirectly lead to a lot of new startups.
People factor in the assistance they expect to receive when taking a job in terms of food, healthcare, and money when they take a job that will with assistance provide them the means to live. It is not unheard of at some low paying employers to guide new employees to benefit programs to help them meet their needs.
In effect such programs reduce the market clearing price for labor at the expense of other tax payers. Such program often require that the recipients work but not for how much. At the limit sufficiently generous benefits could inspire someone to work for $1 per year and you could subsidize taco bells entire workforce but the minimum wage and the limits of federal dollars both prevent this.
Absolutely false. People will always work at the highest wage they can obtain unless they value their time above what that wage. No government assistance leads to even more people working for $1/hr because they're even more desperate.
Government benefits lower the floor so low that people literally couldn't live if they were paid solely in wages rather than wages + benefits.
I know that libertarian types like to pretend government regulations just appeared into reality suddenly, without anything provoking them. But the reality is, most government regulations were put in place to save people from unsafe conditions that the free market exploited.
- markets are efficient
- people are rational
- everyone has perfect information
- there are no power imbalances
Aside: Do you play poker? I've started to wonder if Freedom Markets™ advocates are familiar with that kind of meta thinking.
I don't know how you're even supposed to go from such a premise that is demonstrably, empirically false.
Bare survival is very cheap in America.
There are niches wherein some can survive on little because they can rent a room or stay with family, because they don't have medical issues and can go without insurance etc etc. These are situational factors that don't scale to a whole society or even the whole of an individuals life.
The poor often go largely without healthcare. Their health deteriorates severely, but it's better than just starving to death. A lot of people have very long bus commutes to work because they can't afford a car or housing close to their workplace or to the best public transportation. Their credit score is probably no good, so they can't get a loan on a "cheapish" car. So if they do get a car, they're stuck maintaining a beater.
They may not have living parents who can help them, or their parents may be just as poor as they are.
Your assumptions are all based on a middle-class individual from middle-class upbringing. That doesn't make any sense when we're talking about the plight of the poor, who are the ones most affected by government assistance, minimum wage, etc.
Indoor shelter isn't necessary for survival. Motor vehicles aren't essential for survival. And you go to the ER and get emergency care if you're in trouble.
The base line for survival is pretty low. It's just "continue to not be dead".
All of this is just to say that, empirically, I have seen the following to not be true in the sense that you mean it (required to live being short for "required to live a decent standard of living"), though it is true in the literal sense that I described it:
> In a truly free market with no government fingers on the scale no worker would ever work for less than is required to live or at least they wouldn't work for long at such a wage.
It makes sense with a system like a universal basic income.
Where we stand now, society is expecting everyone being supported by one or more (self)employed jobs, so underpaying people is unacceptable.
I'd argue a change like UBI should come first before lifting the need for companies to pay their employees better.