It seems if the problem you allege were true at scale, the entire labor force is sitting around doing nothing.
Are you really claiming that the only reason all (tech) employees do their job is just to avoid firing? How do you operate in a zero-trust life?
An interview is at least 4 people, each grilling you for an hour, asking hard questions.
Their hiring bar is high and they optimize for avoiding bad hires (which of course is pissing off the commenters who want to be hired and therefore would prefer lower hiring standard).
In Europe they make it harder to fire people and guess what happened?
First, companies have probatory period (2-6 months, depending on the country) where you're hired but can be fired at will. This is to minimize chances of being stuck with a poor performer.
Second, EU economy is about the size of US and China but software industry (and the tax / employment riches associated with it) is largely in US Chine. Might be a coincidence but I think there's causality between over-regulation and stagnation of the economy.
What good is a growing economy when your country's people are living shorter, unhappier lives?
Look at the countries that are generally regarded as happiest: are their economies the biggest?
Assuming when you say "biggest" you mean per capita... yes. Obviously it's not the only factor, but generally I think it's generally accepted that people in rich countries are better off than people in poor countries.
With the endless seas of SWE layoffs, we'll see if that behavior continues.
It's also not a solved problem in countries where at-will employment is not the norm.