This is why I don't give you a job

http://andorjakab.blog.hu/2012/01/06/this_is_why_i_don_t_give_you_a_job

by fourspace • 15 years ago

588 529 15 years ago

andorjakab.blog.hu

kls3• 15 years ago

Wow I always hear people talking about why Silicon Vally cannot be reproduced in Europe, but I have never seen anyone put it so pointed. Thanks for education someone in the States about the realities of some areas of Europe.

_delirium3• 15 years ago

Things vary on many axes, though. I'm pretty sure that, in Silicon Valley, if you came out and said you would never hire a woman or an old person, you would be fired immediately and blackballed from managerial positions for life (or if you were the owner, sued into oblivion). Meanwhile, in Hungary, I'm going to guess Jakab Andor keeps his job and will be free to hire or not hire who he likes--- because Hungary presumably doesn't take antidiscrimination laws as seriously as the US does.

(Also, there's much less corruption in the US, which is probably the key difference.)

fraserharris• 15 years ago

Just because you can't say it, doesn't mean its not in the back of every hiring managers mind. I've certainly heard people refer to it privately.

Anything that increases the base costs of starting a business, such as these, will reduce entrepreneurship.

jodrellblank2• 15 years ago

He didn't say he would never hire a woman or an old person, he said he wouldn't hire a woman or an old person in the context of a startup.

He might be a HR manager in a larger company with good resources, happily hiring all kinds of people for all we know.

walkon2• 15 years ago

Actually he says he wouldn't hire anyone, because he won't be attempting startups in the first place. You shouldn't get in trouble for your hiring policies when it is simply: "I don't have employees."

maaku• 15 years ago

He's saying it in the context of pointing out problems and inefficiencies of the system. I interpreted it as "these laws designed to protect women and the elderly are in fact incentivising bad behavior by employers, and thereby doing them harm, not good."

kls3• 15 years ago

if you came out and said you would never hire a woman or an old person, you would be fired immediately and blackballed from managerial positions for life

I took it as an example of why he won't hire anyone and why he won't even sell his apartment and start a venture. As such he would have no company to represent in saying those things. Further if you never hired anyone, I am pretty sure you could state your reasons in America and not run afoul of legislation. Now if you openly stated such and then hired only 25-50 yr old males, sure you are asking for it and are going to get it.

nandemo2• 15 years ago

As far as I know the rant is about Hungary, not the European Union in general. Labour and tax laws aren't the same everywhere in Europe, and the Hungarian economy is hardly representative of the EU's.

Reproducing Silicon Valley is another story. Arguably it's very hard to do even in NY or other parts of US that are more or less similar to California. After all, labour law is just one of many factors. For instance, even with all that overhead, I bet it's still much cheaper to hire a bunch of top-notch, English-speaking programmers in Hungary than in California.

balloot5• 15 years ago

Define "top-notch". Because under my definition of the term, I would expect there to be very few engineers in Hungary that match that description.

IMHO, Silicon Valley works because it houses a hugely disproportionate amount of the very best engineers, and from my experience the top .1% or so of engineers open up possibilities that otherwise simply aren't there.

Yes, the capital is here, but I think that's an effect and not a cause. If you took Facebook and started it in any other place in 2004 (with just a handful of exceptions) with exactly the same access to funds I highly doubt it ends up as it is today.

kls3• 15 years ago

Sure I understand that different parts of Europe are different, it was just nice to see someone explain it, because we in the states keep hearing regulations are overbearing in Europe. I understand that it's not all of Europe, and that was my point, we tend to get the rolled up news over here and not being close to the situation it's can be difficult to understand the dynamics. This article helped me understand the nuances of the gripe.

muyuu2• 15 years ago

Hungary is a bit extreme, but there are many countries in the EU and in the eurozone with very similar problems. "Social protection" needs to be cut down in most of Europe, we cannot be competitive otherwise.

danbmil992• 15 years ago

> even with all that overhead, I bet it's still much cheaper to hire a bunch of top-notch, English-speaking programmers in Hungary

Actually, towards the end of the post he delineates the real tragedy: nobody starts a legal small consulting business in Hungary, for all the reasons he states. It's cheap to hire hi-tech labor in Hungary as long as you just send checks to individuals and leave the government out of it as much as possible.

So the situation is that the gov't, through heavy-handed social legislation, makes it basically impossible to start a small business legally. Big business I suspect has ways and means of gaming the system and making a profit regardless. Bad for Hungary.

frgtn• 15 years ago

Europe (at least in my country, eastern Europe) has strict social security laws. Firms cannot fire a person if he/she takes a vacation for child care (men are encouraged to do that too!). The vacation lasts up to 2 years (IIRC). The time is paid for by the government, but you lose your highly-qualified and trained employee for 2 years.

Facts aside, I don't approve the author making such a big thing of it though it sometimes may be an issue (if you're hiring for a long project where replacing people is REALLY expensive).

flojito• 15 years ago

In Spain you cannot fire a pregnant woman. It could be even illegal asking for it in a job interview... Recent laws allow the father taking the 50% of vacation for child care. In candidates lists -algo by law- there must be 50/50 men/women. So, definitely, Hungary is not representative from European Union.

scraplab• 15 years ago

I'm glad we can't reproduce Silicon Valley in the EU. I'd rather we had healthcare and education for all, a top quality transport infrastructure and a more equal society.

If we're going to build tech clusters, let's do it on our terms.

latch• 15 years ago

I'm not american, but I think your comment is in bad taste. The region is looking at an Argentina-style economic collapse. It's disingenuous to say you have better social programs when, you know, you might not have been able to pay for it.

vixen993• 15 years ago

Healthcare for all? Not in Romania where in many cases you'll simply die if you can't afford to pay for treatment and very often for diagnosis as well if it involves advanced checks taken for granted elsewhere in the West. Poverty is the problem. And I doubt it'll get solved anytime soon given the business environment here.

mjwalshe2• 15 years ago

But don't forget that in the Eu you pay less of your income for health - and a heath crisis wont lead to family poverty

Some one I know moved to the states (from the UK) working for citibank and was paying much more just for his health cover than he would for all the UK benefits.

vixen993• 15 years ago

Health crisis won't lead to family poverty? Is this true for all 27 member states? I've already pointed out that it isn't in Romania. What about the other East European members? Can anyone tell us?

paulhauggis2• 15 years ago

You can buy your own high-deductible health-care plans in the US through most of the major providers (costco also has their own now).

It's not the best, but you won't go broke if you have any sort of health emergency.

cdavid• 15 years ago

There are a lots of misunderstandings about cost of firing, cost of employment, etc... in Europe. What is true is that it is complicated because every country is different, and some countries can be anal about one thing that others are not. A typical example: in France, you often have to consult union before having to fire people (especially true is big companies). The key point though is "consult". Whether they say yes or not is actually irrelevant (from a legal POV, that is).

I am also tried about the "stealing your money argument". In the US, the salary you get after taxes still needs to be used to pay health insurance and retirement. In continental Europe, that's part of the 'stolen' money. You can argue whether it is a good system or not, but an honest comparion is to e.g. remove the social contributions for health (around 6-7 % for a beginner engineer with a good degree), and pension (around 10-12 % IIRC). When comparing e.g. the US vs European country, this has to be taken into account (the graph in the OP is pure non-sense in that regard for the OP argument).

As far as Silicon Valley goes: from all countries I have been working in, Japan has by far the lower income taxation. Yet, it does not especially thrive in a silicon valley manner (I also believe California is far from being the state with the lower income tax in the US ?).

learc835• 15 years ago

>remove the social contributions for health (around 6-7 % for a beginner engineer with a good degree), and pension (around 10-12 % IIRC). When comparing e.g. the US vs European country, this has to be taken into account

Then you'd have to remove our 7.65% for Social Security and Medicare (employers pay another 7.65% on employees behalf).

zdw• 15 years ago

Simple solution - gender equality for time off related to pregnancy. Paternity leave for the same length of time.

masterleep• 15 years ago

Simpler solution. Let people make arrangements they want.

_delirium3• 15 years ago

Both approaches seem to work well in various situations, which is why I'm skeptical of the value of these kinds of rants which lack comparative analysis. Apparently it works badly in Hungary; but works well in Sweden. It'd be more enlightening to read some analysis of the differences, since it empirically isn't the case that strong parental leave policies always and everywhere cause high unemployment, even if they anecdotally cause one dude in Hungary to not want to hire women.

(I'd personally guess that culture and corruption have more to do with the large economic differences between Sweden and Hungary than taxation or parental-leave policies do, so I think he's barking up the wrong tree.)

swombat• 15 years ago

Simplest solution: move the fuck out of Hungary.

fedd• 15 years ago

> Simpler solution. Let people make arrangements they want.

for example, in hard times, or to pay debts, allow to sell oneself into lifetime slavery.

dextorious4• 15 years ago

Only that doesn't work.

The owner of a 100/1000/10000 people company has much more power than the employee in need of work negotiating his salary/working conditions.

Not everyone is a "rock star" employee that managers are bending over backwards to accommodate.

That doesn't mean that the rest of the hundreds of millions of workers have to work with whatever conditions they can arrange for themselves. If managers could have their way, everybody would be working 18/7 for substinence salary. A society has to make laws to protect the public from that.

Politics used to mean: "a way to protect the common folk from bigger powers".

daniel-cussen• 15 years ago

3 years paternity leave?

cmars• 15 years ago

Require equal paternity leave, and the author will be forced to consider married men just as risky a prospect.

Better solution: make the employment restrictions apply to a company of a certain size. A large enough company should be well-enough equipped to take care of its employees. A startup company isn't.

jcdavis• 15 years ago

I am definitely not an expert on US discrimination law, but I believe that is actually the case to some degree-many of those laws only apply to companies with more than 15 people (eg Title VII of the Civil Rights Act of 1964).

neilk2• 15 years ago

Even better solution: don't penalize any employers for their employees' reproductive choices.

If the state believes it's a good idea to have a parent at home, the money for maternity and paternity should come out of the state's coffers.

And I'd encourage everybody to be open about their plans to have kids or not. If this results in undue discrimination against people raising kids, offset it with a corporate tax break for employing people with dependents.

This would be really expensive, but probably cheaper than the costs that a destitute single mom or a poorly-parented kid can inflict on society. And at least the costs would be borne by everyone, and both businesses and their employees could be honest and plan realistically.

Xylakant• 15 years ago

We do have something pretty close to that in germany since roundabout two years. Either parent of the child may take paternity of up to 12 month in total. I think the mother gets a little extra time and there is a bonus of two month if both parents choose to take a leave of at least two month (so then it's 14 month in total). You get paid the lions share of the wage you had by the state. There's quite a couple of fathers that take at least the two extra month, but I actually know personally two fathers that opted for the full twelve month with their wifes taking the extra two. It will probably take another couple of years until that's widespread though. I can look up the exact details if anyone's interested.

I think this is a pretty good solution to balance the fact that it's women that need to carry the child - now companies have less of an incentive to penalize them for that.

someone136• 15 years ago

Counterpoint to the idea in this article - I don't like the idea of at-will employment. I'll keep the political or ideological ranting off HN, but in short, I don't think that being able to fire any employee for any reason whatsoever is a good idea.

Interesting to hear how things are in other parts of the world, though.

EDIT: If you're downvoting, by the way, please leave a comment about why. I don't really care too much about the karma, but I'd love to hear why people disagree (and for the record, this comment is at -1 at the time I edit).

kiba• 15 years ago

Why it isn't a good idea?

someone136• 15 years ago

Well, in short:

1. Anti-discrimination laws still apply, even in at-will states in the USA, but all that means is that the employer has to state that they fired the employee for ANYTHING ELSE, even if it's actually for a discriminatory reason.

2. Being fired without cause means gives greater opportunity for employers to abuse their employees - and, considering the general principles of game theory, it WILL happen.

3. Notice vs. cause can be separate things, but many people nowadays don't have the ability to survive longer than a couple of weeks to a few months without a job, and being fired without any notice can literally ruin someone's life.

Again, this is only a personal view - I'm no economist, and I don't pretend to have all the answers. So, please take this with several grains of salt :)

balloot5• 15 years ago

Because the labor market isn't perfectly liquid. Let's say a manager randomly decides that he's firing all the blond haired people in his company. Those people will be harmed. Even if perfectly competent at their jobs, they very well may not find another job right away. It may even be the case that an equivalent job doesn't exist nearby and the employee is SOL if forced to quit without planning. Furthermore, once the company fires all the blonde haired people and this becomes known, there will be cases where competing jobs can now offer less pay because it knows a competitor is no longer willing to hire blond haired people.

Now, you might say "the company that fires all the blond haired people will eventually die at the hands of a company that gains an advantage by accepting blond haired people." True, but it's a slow bleed, and that certainly doesn't help the blond haired people who were arbitrarily fired.

In case you're skeptical, all this and more can be observed in the case of US black people up until the civil rights era.

InclinedPlane5• 15 years ago

I like the idea of an employee being able to quit at a moment's notice, and that goes hand in hand with the ability of an employer to make the same choice.

To be honest I find the idea of paternalist employers rather revolting.

someone136• 15 years ago

I actually agree with your point there - if the employee wants the privilege of being able to quit at a moment's notice, they should also be willing to give up their employment protection. However, if the employee is willing to give notice, then there should be equal protection for the employee.

dextorious4• 15 years ago

"""I like the idea of an employee being able to quit at a moment's notice, and that goes hand in hand with the ability of an employer to make the same choice."""

Not even remotely the same.

Because those two, worker and employer do not even remotely share the same power...

pohungc2• 15 years ago

Why do you think being able to fire any employee for any reason is not a good idea?

someone136• 15 years ago

Please see my response to kiba, below. I'll reiterate, though - it's a personal view, and I'm no economist, so please take it with several grains of salt :)

ifearthenight7• 15 years ago

Would be interested to hear your thoughts on competing individual rights inside a capitalist society. More specifically the company owners right to make a profit versus the employees right to make a salary. Interested to know your opinions on why the employers rights supersede those of the employee.

dredmorbius• 15 years ago

Among other things: it puts your entire staff in a short-term thinking mode.

If I'm walking into work every day wondering if my door badge is going to work that day (one of the psychologically damaging aspects, IMO, of door badges -- I've had co-workers comment "well, I've still got a job" as they walk into the office) based on the capriciousness of a boss (some of whom are very capricious), well, I'm not going to be focusing particularly on the long-term elements of my position. In fact, I'm going to be spending a fair bit of time looking at alternatives and networking.

In ecology, the growth you get in an environment that's continuously disturbed and disrupted is best described as "weedy". There may be vegetation (and even some animal life), it's not going to be particularly productive. What you're getting is lifeforms that are selected for survival capacity, not, say, wood or food production, or even necessarily stability.

Nial Fergusson, though frequently not the best guide, does point this out in his Ascent of Money, noting that one of the requirements for successful and productive economic activity is stability. This applies equally to firms and individuals. Many of the structures we've adopted (debt, savings, finance, subsidized mortgages, various "golden handcuffs") exist either to buffer change or incentivise stability.

Kicking (or threatening to kick out) the legs from under someone isn't that.

Unfortunately, there's also been a lot of cargo-culting built around this: people in the U.S. who bought houses to ensure personal financial stability .... because buying houses is what financially stable do. Unfortunately, that's confounding cause and effect. You buy a house when you've got an assurance of lifetime (or at least long-term) employment, in part to help cement you with that employer. Similarly, establishing large lines of credit (or revolving debt): useful when you've got a reliable, if perhaps fluctuating, income stream to meet those debts.

Anti-discrimination measures, seniority rules, tenure, unions, labor review boards, and the like, all seek to change the power balance of the employer/employee relationship. Which, for any employer with n>1 employees, is greatly skewed in the employer's favor. While this may make for an economic climate which doesn't expand as quickly, it may also make for one that's more stable in a downside movement. Looking at economic growth between the US and established (e.g.: not modernizing, BRIC nations) economies, particularly in Europe and Japan, might be instructive (I haven't done the analysis). However northern Europe (particularly Scandinavian countries) have done quite well over the past 20 years or more.

If your landscape is rapidly shifting and/or doesn't sustain the level of existence you're trying to establish, you're going to want to move elsewhere (physically or figuratively), reduce your needs, or strengthen your foundations.

As to Mr. Andor's statements concerning his employment growth plans and policies:

1. He could move his business to a more hospitable environment.

2. He could find himself competing (successfully or otherwise) with those having different policies. This is "letting the market sort it out".

3. He could petition his government for changes in law and/or practice that better suit his business goals.

I'm not sympathetic to the arguments he provides, and suspect that he'll find that he's greatly limiting his enterprise's growth prospects by foregoing any possible payroll expansion.

algoshift2• 15 years ago

Start a company. Hire some people. Run it for, say, ten years. Come back and review what you just said.

Mark Twain: Someone holding a cat by the tail learns something he can learn in no other way.

someone136• 15 years ago

Hah, I'll freely admit that I'm not experienced with the "other end of the cat", as it were. But I do stand by my personal principles, even thought they might be inconvenient. And as I mention in my reply to InclinedPlane, I'm not saying that I'm completely opposed to the concept - but rather that at-will should be a contractual option, rather than a default.

dextorious4• 15 years ago

"""Start a company. Hire some people. Run it for, say, ten years. Come back and review what you just said."""

Even if he disagrees then, so what?

Company owners/directors vs employees is a 1:x ratio, where x can get to 100,000 and more.

The law should protect the general population (employees) more than the few directors.

And if you are worried about other companies having an unfair advantage make this mandatory in all states. And penalty-tax international goods imported from countries without something similar.

Else, you are competing with the lower common denominator, ie. with what people are willing to do in a poverty stricken country somewhere on the world, where even kids are allowed to be put to work, etc.

Which is unfair to both you and to them (because it makes it possible to perpetuate their relative misery as a "strategic advantage").

Homunculiheaded2• 15 years ago

You can get this right now in many state university systems in the US if you want it. Especially in the case on non-exempt employees. Unless the employee does something criminal I would say it would takes a minimum of a year to fire someone but probably more, and with clever enough employees it can be nearly impossible. Because of seniority and the like it can be really hard to layoff a specific employee even when there are budget cuts that eliminate positions.

Here's the problem. Bad employees tend not to leave of their own free will, in my experience the worse they are the more this is true. However, really good employees tend to move on every few years as they grow into new opportunities. What this means is that every time you replace a good employee you roll the dice that you'll get a bad one. There is now one position that is likely locked in place with bad employee. Over time this leads to a lot of bad employees, which in turn lowers your retention rate of good employees.

Now there is a standard tactic to fight this (and this same tactic would work in your senario as well). Make the bad employee extremely uncomfortable. Within the rules of the system do everything you can to make work suck. This does work reasonably well. The problem? Terrible employees are immune to this. So if this tactic is abused you end up with only terrible employees.

So in short, without the ability to fire people easily you tend to go on a downward spiral of increasingly bad-mediocre employees.

westicle• 15 years ago

This can backfire.

http://en.wikipedia.org/wiki/Constructive_dismissal

grogs• 15 years ago

Improve your recruitment, hire good people. Take advantage of any probation period. In the UK this is generally 3 months, and can be extended. During this period employees are just 'at-will'.

In the UK it can be up to 11months and 3 weeks before the main employment laws kick in.

jseliger• 15 years ago

If you're downvoting, by the way, please leave a comment about why.

I think the comment is too political and lacks content. The Guidelines say: "Please avoid introducing classic flamewar topics unless you have something genuinely new to say about them." Although I don't wish to be a jerk, I also don't think the comment meets this criteria. So I downvoted it.

In reading comments, I try to upvote those written by people with special knowledge or insight, usually gleaned from particular experiences in the field or unusual reading / insight. I often downvote those that seem to lack such insight, or be random, or that don't have "something genuinely new to say," or that are too overtly political.

I'm not downvoting you because I disagree with you—I actually haven't given much thought to the issue of at-will employment versus government-mandated employment and so don't really have an opinion—but because of the lack of content in the comment.

ifearthenight7• 15 years ago

Resounding upvote for this comment.

nirvana• 15 years ago

Consider this hypothetical: You don't like the idea of at-will employment. How do you feel about the idea of being able to quit your job at any time?

You're relying on your employer for an income, this is true, and thus being fired in a way you don't feel is justified seems unfair. Naturally.

Your employer is relying on you to do a job and has invested (lets say hypothetically) in your training, and thus you leaving arbitrarily (say you got a better job) seems unfair to them.

One solution to this would be employment contracts that require you to stay at the job and the job to remain open to you, for some period of time under certain conditions.

Would you accept giving up the right to leave arbitrarily in exchange for the employer giving up the right to fire you arbitrarily?

Nitramp• 15 years ago

Actually, this is the common case at least in Germany, and also in a bunch of other European companies. Employment contracts have a termination time that's usually 3 months; if the contract doesn't state anything it goes up even higher over time.

Of course, if both parties agree, it's a wash.

andorjakab29• 15 years ago

"How do you feel about the idea of being able to quit your job at any time?" - Very strange things are happening here. For example, if you become homeless, you can't exercise your freedom to be on the streets anymore. If you're on the streets, you are _fined_. If you can't pay up, you are prisoned. Now it's easier to see how unjust this is. You will feel less sympathy for a small business owner, who can't exercise his or her freedom to give a job to whoever he or she wants, until he or she wants on whatever terms they agree. But soon you may find yourself "protected" by the state in a very similar fashion, how our poor homeless people are now protected in Hungary.

rondon22• 15 years ago

What if we replaced "employee" with mechanic? Would you be in favour of making it illegal for people to switch mechanics 'at-will'. Then you would have to prove that your mechanic was terrible before you could use someone else.

ifearthenight7• 15 years ago

Wouldn't you consider a mechanic a contractor? And you should be able to end a contract with a contractor too (depending on the terms you signed together). An employer/employee relationship is (at least legally) a whole different kettle of fish.

balloot5• 15 years ago

A mechanic is a business selling its services. An employee is an individual. It's an apples-to-oranges comparison.

vacri3• 15 years ago

In Australia, you have to have a reason to fire someone, unless your company is small (<25 people?). That reason can be a great variety of things, but if they haven't done anything that you can pin on them as 'dismissably wrong', you can retrench their position instead. This is a way of saying "it's not you, it's us", but the catch is that you can't hire someone else to do that role for 6 months, ie: you're being held to your claim of 'downsizing'.

michaelochurch2• 15 years ago

IANAL, but "at will" doesn't actually mean that a person can be fired for any reason, even without cause. That's something employers say to discourage lawsuits. It's not actually true.

"At will" means there's no contractual agreement and an employee can be terminated for documented performance issues or for business reasons (i.e. layoffs) without it being treated as a breach of contract.

In a contractual arrangement, for either party to walk away (even for business or performance reasons, unless stipulated) is a breach. In at-will employment, it's not a breach of contract. That's not the same thing as saying that people who are unjustly fired (e.g. pregnant women) have no recourse.

That said, it's usually not in a person's interest to pursue a wrongful termination lawsuit. It's much easier and less risky, in most cases, to get another job.

rprasad3• 15 years ago

IAAL.

"At will" means there's no contractual agreement and an employee can be terminated for documented performance issues or for business reasons (i.e. layoffs) without it being treated as a breach of contract.

That's not true at all. You are misunderstanding contract law. An employer-employee relationship is a contractual relationship, even if not formally memoized in writing.

"At will" simply means that the length of the employment arrangement is not defined, and continues so long both parties agree it shall continue. If either party decides it should not continue, that party may end the arrangement (the employee by quitting, the employer by firing). An at-will employee can be fired for any reason, so long as it is not one of the prohibited discriminatory reasons (i.e., age, gender, etc.). There is no need for the employer to document the reasons for termination, though many due as a matter of course (usually, to defend against discrimination lawsuits).

That said, it's usually not in a person's interest to pursue a wrongful termination lawsuit. It's much easier and less risky, in most cases, to get another job.

LOL. If a person is fired for discriminatory reasons, it is definitely worth the effort to sue. In addition to salary for the period of reasonable unemployment, they are also entitled to punitive damages (usually 3x actual damages).

orbitingpluto2• 15 years ago

What a douche.

Guess what? People are messy. But more importantly, people are valuable.

The author can whine all he likes. But really, try getting something done without them. Oh, wait, he says he's not going to even try... why are we reading this?

InclinedPlane5• 15 years ago

I'm not so sure. If I had to keep an employee for 3 years while they were on vacation I would just not hire any employees. Or I'd move somewhere with sane business laws.

learc835• 15 years ago

I'd never have any employees. Independent contractors all the way.

geuis• 15 years ago

It sounds like you didn't even read the article.

The author is describing a lot of negative legal aspects in his country that make running a successful business nigh impossible.

orbitingpluto2• 15 years ago

I did.

The reason that the article irked me:

Imagine this combination: brilliant, an MSc in CompSci, being over 50, female, not white, and an immigrant.

I tried to get her hired for the IT department where I worked. Instead she was cheated out of her pay and fired before the standard employee trial period ended. Standard practice for the place. (900 employees in four years, avg occupancy of 50 workers, anyone mid-level and up is white only, and as soon as a project was over almost everybody is fired, continuity of work is not the issue).

I've heard all the same excuses before in a much friendlier business environment. All in an attempt to treat people like they are not human beings. I know nothing about the author and I'm not disputing the realities of business in Hungary. But damn I want to shoot the message.

And a swath of downvotes in an attempt to do so is worth that...

bmelton3• 15 years ago

And this is, in large part, why startups work so much 'better' than larger companies.

Startup hires tend to be somewhat self-selecting, as the jobs tend to draw young males without families. The risk of the job makes it more appealing to those types, but the field is generally overrun by men, which is a topic that seems to come up every few months as well.

What that means is that the eco-system is better for lean startups. You don't have to have the 'buffer' budget over actual costs that corporations do. Large companies typically offer paid vacation, matching 401k, disability leave, maternity leave and all that jazz.

If you're working on a lean startup right now, ask yourself what would happen if your lead developer disappeared for three months.

This is one of the real disadvantages we face as a nation because, in large part, the people we outsource labor to don't have these protections.

sliverstorm4• 15 years ago

What? How exactly was he describing a non-lean company? Hell, he was angling his wife as a supplementary source of income, and his home as investment capitol!

bmelton3• 15 years ago

I believe you misunderstand me. I never said that he wasn't a lean company.

I was comparing the average lean startup to the average large corporation. Neither made-up example was his company.

jes51994• 15 years ago

I don't know if I buy it. Startups have plenty of benefits from being unbureaucratic, willingness to take risks, and small enough to pivot. I think that the fact that they pretty much only employ middle-class white men under 30 is a pretty significant brain-drain, though, as people with experience age out so quickly, people from other fields don't join, and there's a monoculture of viewpoints.

teyc• 15 years ago

While what he says may be true, without employees, his business can't scale. What he is describing is the difficulty of startups competing against established competitors who have a reliable source of revenue. In many countries, smaller businesses get some form of exemption.

Evgeny2• 15 years ago

Sort of "meta", but interesting: http://andorjakab.blog.hu/2012/01/03/hungary_not_funny_anymo...

That blogpost made me kind of like a celeb, a bloghero or something. Fact is, that single blogpost generated half a million pageviews, 91141 Facebook likes in a matter of days. It was covered on national television, I was "the blogger of the week" at the biggest local blog provider (blog.hu), a whole bunch of responses were written by big names in the trade.

Newmedia analysts were trying to figure out what made it such a big meme, out of the blue, from totally nothing, without any mainstream media promotion. People shared it like hell, on Facebook. Likes were rising by hunderds, by the second. Like this: 30145, F5, 30359 ...

sliverstorm4• 15 years ago

What made it big should have been obvious- it hit a nerve. It rang true. He wasn't just ranting and making shit up.

mnyary2• 15 years ago

The right-wing Hungarian government changed the law of work relations. This rant was part of the campaign to gather support for the initiatve. It represents a very popular opinion, but popular does not mean true. For your information:1. Is it almost impossible to get a job if you are over 35; 2. Several people over 55 were fired recently. There are horrible stories.

NHQ• 15 years ago

More and more you are compelled to own the corporation that represents you in business. So we can get around onerous government regulation. We are taxed to pay for the private-public crony-capitalism complex. It may be costly or unconscionable for me to hire you--or to be hired and paid as an individual taxpayer--and let that money go freely into corruption. But we can hire the other's company. How your company uses its money and treats its employees is your business.

3am• 15 years ago

I submitted a post about this at one point, but Hungary is going through really terrible cultural and political troubles. I really feel for the Hungarian people - in that context, the frustration in this post makes much more sense.

mhartl• 15 years ago

The solution to all such problems is as obvious as it is unlikely to happen. It's not "women get six years' vacation if they want it". It's not "at-will employment". It's complete freedom of contract in the context of secure, effective, and responsible government.

You and your employer come to an ex ante mutually beneficial agreement. A secure and effective government will enforce such a contract, unless it represents an egregious abuse by one of the parties. A responsible government will formulate a wise definition of egregious abuse.

Once you start to enumerate all unenforceable contracts, you will come to understand how far we are from this situation. And when you look at how insecure, ineffective, and irresponsible governments are, you'll see why we may never get there.

Georgiy3• 15 years ago

In Russia if you don't minimize taxation with tricks and do it straight, you pay like 1,2$ for each 1$ your company makes. So mostly companies aims for super profitable niches, like selling chinese shit with 1000-5000% margin.

Evgeny2• 15 years ago

Or you have the 'official' salary of $50/month, and you get the rest paid to you in cash in the envelope each month.

Well, at least that's how things were about 10 years ago when I left - it could have changed a lot.

There was some economist who estimated that if a business in Russia pays EVERY tax it's supposed to by the law, it will pay way over 100% of the profits in taxes. So technically there is no business that is following the law 100%, giving the 'controlling organs' the power to ask for bribes. Could be an urban legend though, I don't have links.

Edit: The parent talks about general taxation, and my take is about the taxes a company has to pay for each employee on top of her salary. Still, I think, "white" and "grey" salaries is an interesting point.

tsotha3• 15 years ago

That's how things are done in Korea. Your official salary is only a tiny fraction of your actual salary.

zeynalov4• 15 years ago

The same system in Azerbaijan.

Georgiy3• 15 years ago

Most big businesses in Russia work with grey schemes. One of the reason not so many foreign companies here, as they forbidden to pay bribes. Yet most people get payed in white. Some hire people by contracts as invidial entrepreneurs so they don't pay 54% of taxes for them, plus theese employes pay only 6% from their salaray instead of 13% to government.

xentronium• 15 years ago

> you pay like 1,2$ for each 1$ your company makes

Sorry, I call BS. This figure is just made up.

Georgiy3• 15 years ago

Dmitriy Potapenko sounded this number, when were interviewed about taxation in Russia and Czech Republic. And he owns big retail networks, restaurants and etc. For example McDonalds to cut taxes is working as shops, not as restaurants :)

leak2• 15 years ago

This was a really long, enjoyable article. My question is, how does the company that he works for manage to pay him enough to buy a 90k flat? Are they shaddy like the other companies he described? Is he shaddy and not paying his taxes? How did his employer manage to do it and why can't he just follow that path?

veszig• 15 years ago

In Hungary smaller companies usually cheat on their taxes... it's a national sport.

leak2• 15 years ago

haha I really do believe that is true.

daliusd3• 15 years ago

Maybe he simply inherited it. Maybe he works for Google Hungary or other international company (overall charging rate he has mentioned in article does not look that bad in international context).

What really looks bad how Hungary's laws make companies noncompetitive. E.g. higher employment taxes means people will work in other EU countries if there is possibility.

ootachi• 15 years ago

The author realizes that these 5 restrictions don't even apply in Silicon Valley, right?

1. I can fire you, if I want to.

California has at-will employment, but you sure can't fire someone based on gender or age anywhere in the United States—and he opens with his desire to do just that.

2. If VAT goes down to at least 20%, better yet 15%.

Sales tax alone is not 20%+$.01 anywhere in the Bay Area, but there are a surprising number of added taxes here and there—Healthy San Francisco, for example, or the California state gasoline taxes—that can make the surcharges on consumer goods add up to that level.

3. If the state takes away "only" 30% of your money.

Federal income tax + California state income tax + FICA significantly exceeds that for most people in the technology industry in Silicon Valley.

4. If higher income is not exponentially punished.

The US certainly does have a progressive income tax scheme.

5. If the states punishes corruption instead of decent companies.

No-bid contracts, anyone? The US is hardly free of corruption.

He's asking for a place that doesn't exist. Moreover, it's a place I wouldn't want to live in; I don't want to live in a place where it's legal to discriminate against minorities, in particular.

Gotttzsche• 15 years ago

> but you sure can't fire someone based on gender or age anywhere in the United States—and he opens with his desire to do just that.

i think his desire was to be able to fire people who don't do their job or dont do it well

mrtron• 15 years ago

...or get pregnant.

It is a very grey area. Too much government regulation and how the hell can it be profitable to hire someone. Too little and individuals get borked if they get pregnant/sick/etc.

Personally I would sacrifice less pseudo stability for less regulation. I believe many problems start off with good intentions, especially when it comes to more regulation.

danmaz7410• 15 years ago

In all fairness, the author just said that he would like to be able fire any worker, even if they were pregnant women/young moms or older folks, which instead have a special protection that would make it impossible even if they're not working well. [BTW, I personally agree with a special protection for pregnant women, but the costs should be on the State]

waratuman2• 15 years ago

And the state passes that right along to the business / people through taxes.

ifearthenight7• 15 years ago

Isn't there a major anatomical part of the disappointing gender discrimation from this post that everyone is neglecting? Men have babies too, they may not carry them to term but they are undeniably a major part. Shouldn't the problem be considered that society forces women to be the ones to take responsibility over the child after it is born? Then companies use this to punish women because they may take a "vacation". How is caring for a child while your husband is allowed to choose what he does a vacation?

moonchrome7• 15 years ago

>California has at-will employment, but you sure can't fire someone based on gender or age anywhere in the United States—and he opens with his desire to do just that.

I don't think you understand his position at all. Trying to fire someone in Europe is often compared to adopting a child, lawyers will take cases against former employers on commission because the probability of winning the case is extremely high. There is no comparison when it comes to US at-will employment, for eg. you have to be able to prove that the employee you fired for coming drunk to work was really drunk, that you gave him written warnings, flowed the formal procedure etc. To be fair tough, employers often use employment agencies that exploit loopholes but it only serves to increase the cost of labor. The only ones benefiting from these laws are the public sector and government owned company employees (ironically even government owned companies resort to exploiting loopholes because even they can't operate under the regulation). And these are probably much higher percentage of workforce than in the US.

And the corruption he is talking about is tax evasion and gray market, that's a huge part of the economy in these countries.

Also, I'm thinking the "progressive tax" in the US kicks in at a much higher nominal amount then Hungary, and that it's disproportionate to the cost of living difference.

danmaz7410• 15 years ago

My wife was fired when she was pregnant, because she was pregnant - which is illegal here in Italy - and they were so kind as to write so in a letter (never underestimate human stupidity/arrogance). We're taking the case to court, and I can tell you that there is no "on commission" here in Italy (also forbidden by the law).

Maro6• 15 years ago

I'm from Hungary, and I never heard of anyone suing their employer after getting fired. I'm not saying it doesn't happen, but you have to realize that the US is super-litiguous, E.European countries in comparison are at the other end of the spectrum: it doesn't really occur to people here to sue after losing their jobs. It's just not part of the culture. Also, private individuals can't afford lawyers, and don't want to deal with them.

vacri3• 15 years ago

3. If the state takes away "only" 30% of your money.

Federal income tax + California state income tax + FICA significantly exceeds that for most people in the technology industry in Silicon Valley.

Does it add up to anywhere near the ~52% his graph says it is in Hungary? Or are we talking around 35% or so?

danmaz7410• 15 years ago

Just as an added fact, for those who don't know it, Hungary is currently ruled by an extreme right-wing party which is pretty much doing away with democracy.

Edit: The EU is considering if measures should be taken; I hope they will, and fast.

daliusd3• 15 years ago

I hope Hungary will not get financial aid from IMF and ECB (if I remember correctly) or will make it extremely hard to get it. That will harm Hungary in short term but in long term it will be good for all the Europe. It will send very good signal for all other Europe countries where right-wing extremists do stupid things (especially Eastern Europe).

P.S. I'm from Eastern European country and I see some similarities with Hungary.

danmaz7410• 15 years ago

I would like even more the EU to have a direct way of dealing with this kind of situations, but for now I agree with you - that's the fastest way to pressure the Hungarian government.

mnyary2• 15 years ago

The current Hungarian government is not extreme right-wing, but surely undemocratic. But they changed the work code in favour of Mr. Andor Jakab. There is a new mass movement against the government, based on the trade unions. A new democratic government would mean an unhappy Mr. Andor Jakab.

ajuc2• 15 years ago

Right-wing label does not mean anything. The same's true for left-wing label.

Politics has more than one dimension, and we're not even sure which dimension is described by this left-right dychotomy.

lalitm• 15 years ago

pathetic reasons for not hiring women.

nosse2• 15 years ago

Maybe, but they are true. Small companies sometimes just don't have the money. I heard about this hairdresser shop that was about to get bankrupt as four of it's six employees were on maternity leave at the same time.

Ok it's rare occasion that 4/6 would reproduce at the same time, but if the owner nice enough to hire mostly just graduated hairdressers, it starts to look possible.

mavelikara• 15 years ago

Sounds like a place where businesses are actively discouraged. I wonder how the guy who (hypothetically) buys his €90K apartment made his money? Probably from running a €9/hr shop under-reporting revenues.

alga8• 15 years ago

Na-ah. The €9/hr "competition" are students living on instant noodles. You can't make a business out of that.

toyg3• 15 years ago

After the first paragraph I was already thinking "Wow, I don't want to work for E760 per month, that's basically on the poverty line!"... then I checked where the guy was from; Hungary is a backwater, and absolutely NOT representative of the EU, probably not even of the old eastern bloc.

Three-years maternity leave? That's unheard of in western Europe, most countries allow for less than a year (my wife got 6 months in the UK); men only recently started to enjoy some rights in that sense (in the UK it's two weeks).

He talks about a post-50 "protected age" where you can't fire people. That doesn't exist in the UK, where we have the opposite problem (firms firing people near pension age, and then hiring youngsters at 1/3rd of salary). I know in other countries laws are tighter (in Italy it's fairly hard to fire people, for example), but as people say over there, "Facta lex inventa fraus" (as soon as a law is written, a way around it will be found"): in countries with rigid laws, firms now hire almost exclusively on a temporary basis, i.e. they hire people as contractors for years or even decades, abusing the relationship.

The high taxes and pension contributions are also a factor in Italy and in France, but not elsewhere.

What this post is representative of, is the general douchebaggery of European "entrepreneurs"; they usually come from "old money" (banks are very conservative with their lending, favouring entrenched players) and bring a terrible mindset to the workplace, i.e. "screw the employees, they're just idiots anyway". This obviously doesn't motivate workers, keeping productivity low.

Maro6• 15 years ago

There are real entrepreneurs in Hungary, like myself, trying to get a product off the ground, raising money, eating ramen.

Some startups from Hungary with funding:

  - LogMeIn: remote-login-as-a-service, had Nasdaq IPO
  - Ustream: live streaming, raised $100M
  - Prezi: nifty presentations, raised $10M
  - Indextools: webmaster tools, acquired by Yahoo
  - Pocketguide: nifty iPhone tourist guides, raised couple $Ms
  - Gravity: recommendation engine, raised couple $Ms

Yes, we'd need a lot more.

jstepien• 15 years ago

For those of you who've used the Hamachi VPN software, LogMeIn are the guys behind it.

white_devil7• 15 years ago

> Three-years maternity leave? That's unheard of in western Europe, most countries allow for less than a year (my wife got 6 months in the UK);

9 months is the "baseline" maternity leave in Finland. My sister had a baby and ended up being away from work for almost two years. She just started working again this week, and the same company was legally obligated to take her back.

toyg3• 15 years ago

Still not three years. You wouldn't get three years in Italy, nor in France or UK, i bet not even in Germany.

mjwalshe2• 15 years ago

Yes this is the same sort of individual in the UK that pops up from the CBI crying wolf when ever anything changes in employment law - claiming that its hard to fire people.

Actually its not, employers always have the whip hand - what they are complaining abotu is that its harder to act in grossly bad ways in the UK.

mdda• 15 years ago

I'm an entrepreneur from the UK living in NYC on an E-2 investor visa. The key factor in employing people in NYC is the 'at-will' employment : Just as I only have to give people one day's notice, so they are only obliged to give me the same. The reduced 'friction' in the system means that I can grow a company much more quickly - and not have a trailing obligation if an employee doesn't work out. This is a huge benefit compared to the UK. You may point out that this gives me incredible power over my employees : But it works both ways - somehow wages for those employees are higher than they would be in the UK...

As for maternity leave, the same issue exists in the USA, to the extent that any firing of an employee has to be non-discriminatory. As for health-care : That's a very expensive nightmare in the USA, and it would be far more efficient IMHO for it to be wrapped into a % tax levy, rather than flat monthly rates (but that's a rather political statement in the US).

Radim2• 15 years ago

    Hungary is a backwater, and absolutely NOT representative of the EU, probably not even of the old eastern bloc.

Unfortunately, it is. For example, the median salary in the Czech republic (the western-most "eastern Europe" country, also in the EU) in 2011 was around 630 Euro (net), which is about $10k per year (net).

I also cheer for the lofty let's-share-the-social-burden ideals that people present in this thread. But I fear these folks are just blissfully oblivious of how their money is redistributed and where it really ends.

viandante• 15 years ago

I would just add that you can make money with such a system, you only need to find a business with more added value (difference between cost and price). And this brings to a whole lot of other topics such as if it is fair for a State to raise the bar in such way, so that less added value businesses simply cannot exist, if this improves growth and unemployment in the long run (I don't think so). Etc.

fierarul5• 15 years ago

The title should be "why I don't give you a job without doing tax evasion".

In Romania it's about the same: the taxation for an employees is high and so is social security (pregnancy leave, difficulty firing, etc). But people don't complain as much because tax evasion is really high.

Of course, this is really annoying for me because if your customer is in the US they will not pay you behind the counter, they will do a wire payment or such, which goes straight into accounting and is taxed.

In this regard, tax evasion becomes unfair competition.

bad_user4• 15 years ago

Also in Romania -

Some companies are preferring contractual work and abusing it, by putting clauses in the contract that employees cannot quit for the next 5 years. This works in the cases were employees need to travel a lot (for example) and in the contract it is stipulated that if you quit, you have to pay the costs of accommodations, food and "training" provided during the contract, which is not feasible for most people.

This IMHO, is equivalent to modern slavery. If you're not able to quit, you cannot complain, you cannot negotiate a higher salary and you are at your employer's mercy.

reinhardt2• 15 years ago

It's only fair if employers cannot fire people at will (without being sued to oblivion). "I can leave anytime I want but you cannot fire me" doesn't make sense.

(For the record I am for at-will quitting and firing)

Maro6• 15 years ago

You can put a lot of stuff into contracts that are unenforcable in court. E.g. you can't sign yourself into slavery.

mbesto2• 15 years ago

Are you guys/girls based in Romania? Good to see some population from RO here on HN. I've got some fantastic developers in our office there.

fierarul5• 15 years ago

I assume in any relationship both parties can abuse their position.

But, as an employer, I feel I am clearly at a disadvantage.

It's easy to put clauses in a contract, but it doesn't actually mean they could be enforced in a court of law, even in one as bad as Romania's.

Having seen the restrictions the local Labour Department (ITM) puts in place, including the kind of stuff you may add to a contract makes me doubt what you say is more than a scam. I have never seen such a contract nor do I know somebody in IT working under such conditions.

Even a non-compete clause is something that I cannot add to a contract because it's super-expensive. According to the law if I want a non-compete on an employee, I have to pay him at least 50% of his salary for the duration of the non-compete.

jan_g3• 15 years ago

The thing (in many European countries) is that government doesn't 'steal' your money, but that out of every salary you have to pay for many different things. Income tax is only one aspect.

For those interested, this is the reality in my country, Slovenia, which borders Hungary (I may have botched some numbers regarding taxation, but the principle behind calculations stands):

1. Out of every monthly salary you pay: income tax, state/public pension fund, health insurance and also a small tax (<1%) called parental security.

2. A woman or a man may take up to 12 months of parental leave, which is fully paid by the state. The government uses money from 'parental security' tax to pay for this privilege. It works, because at any given moment there are many,many more employees not on parental leave than those on parental leave.

3. A woman is entitled to sick leave during pregnancy if her doctor makes such decision. So it may well be that she is absent for two years from her job. And it is also true that many women abused this privilege simply by convincing their doctors that they 'cannot perform on the job while pregnant'. A few years ago there's was a sort of clampdown to this practice by tightening the control on the doctors' decisions. So it's not that pervasive anymore.

4. A woman is also entitled to reduced workday (only 4 hours instead of 8) while her child is under 6. Her salary is of course halved, but state covers her pension fund as if she worked 8 hours. Many women don't decide to use this option, simply because a halved salary puts a lot of strain to majority of families' incomes.

5. Regarding firing workers: similarly to Hungary it's very difficult to fire someone and almost impossible to fire pregnant women or old people. Therefore, majority of people under 35 don't have regular contracts, but they work via independent contracts or the so-called self-employment companies (you establish a company in which you are a sole employee and then go work to another company which pays you via your small company). Needless to say, job security is practically non-existant if you aren't on regular contract.

6. Progressive income tax is also here, however it's not as brutal as in Hungary. Lower salaries (<1k euros) are actually not taxed that much. The problem is only that the highest tax bracket (41%) comes already at 2k euros and that hits middle class the most. We, skilled professionals, are usually complaining the most about this fact. There are discussions to change this taxation in order to stem the brain-drain. It's also important to know that progressive taxation is applied on 'past-the-post' principle: e.g. you are taxed 41% only for your income that goes over a certain amount. This means that if your salary is 2k euros, you'll be taxed 41% only on income past 1.5k euros, that is 500 euros will be taxed 41%, 1.5k euros 27%.

7. Grey economy/tax evasion is certainly a problem, however the tax bureau is becoming more and more powerful and it's connected with banks. It's actually not that easy to cheat anymore. That goes for majority of people/businesses, richest top 5% still game the system by moving the money to Cyprus/Luxemburg shell companies and so on, but this can't really be helped unless it's solved on EU level.

Ok, I'll stop now :-). If you have any further questions, then do ask.

wisty2• 15 years ago

Australia will tax residents for offshore assets. Most countries don't. Of course, it's easier to cheat (as the banks overseas may not co-operate), but that might change with more international co-operation.

bobds• 15 years ago

I remember reading a story about a wealthy Australian that went to court regarding his offshore assets. The assets were under a trust that locked him out of making any decisions, automatically triggered when he became a defendant in such a court case.

Retric2• 15 years ago

That's still far lower taxes than I pay in the USA. SS, Medicare, State, Federal really adds up.

Federal 25%(over 34k), Medicare 15.3% (below ~120k cutoff), Medicare 2.9%, Virginia 5.75% (over 17k /year). Now many people get tax breaks for various things but 50% income tax rate is fairly common for the upper middle class without much in the way of a safety net or public heath care.

tptacek8• 15 years ago

It's not quite that straightforward, is it? State taxes are federally deductible. And virtually everyone in the upper middle class owns a home and takes a whopping deduction on mortgage interest, and property taxes are also deductible.

I'd also push back on "not much in the way of a safety net". I'd like universal single-payer health care, but in the meantime it's worth remembering (a) once you hit retirement age, you very much do get public health care, and (b) retirement age is when you're most likely to incur medical expenses.

jan_g3• 15 years ago

That 41% that I've mentioned is just income tax on my brutto salary. Pension fund is ~15%, health insurance 8.5%. In addition to my taxes on brutto salary, the employer is levied additional taxes for my health care and my pension (so called employer's mandatory participation). In total, the cost for the employers quickly adds up, so (for example) 3000EUR brutto will give me 1700EUR netto and the total cost for employer will actually be 3483EUR.

ganley• 15 years ago

... and don't forget the other things we don't include in our taxes here, but that are covered by your taxes in many other (especially European) countries: health care, retirement, disability insurance.

brown9-24• 15 years ago

These numbers don't add up for me. I make just over six figures a year and my effective tax rate at the end of every year is roughly 20% (according to TurboTax). Single, no kids, no house.

As tptacek pointed out you are ignoring that the state tax is federally deductible and that the income tax rate at the 25% bracket is the marginal rate.

nestlequ1k• 15 years ago

This guy is a complete asshole. Why is this #1 on HN?

xlpz• 15 years ago

Well, it's not complicated to do the math...

vixen993• 15 years ago

Anyone idiot or indeed a wise man can crank out an opinion or even cliched abuse but don't you find it more interesting when they bother to offer a counterpoint or an argument or pertinent further evidence regarding the issue?.

kayoone• 15 years ago

I run a company in germany, if my employees want EUR 1500 net salary, which is very little for a trained professional, it costs my company roughly EUR 3000. So not that much better.

I dont know what this guy is doing but he should just sell his service internationally so he could easily charge double the money and would solve most of his problems.

troels• 15 years ago

Exactly my thoughts. Most of EU has similar tax/vat and generally in favor of employees. Yet it's not a problem to start a company in the "west block". He complains about corruption too, though. I can believe that being an issue i Hungary.

alga8• 15 years ago

But he's hyperbolising, too. An illegal freelancer for a quarter the price is no competition for a legitimate business. Most business clients will not even consider paying black cash in an envelope, and the illegal freelancer will also lose out on social insurance.

vacri3• 15 years ago

It's interesting that you speak of salary in net. In Australia we speak of it in gross, and the rule of thumb is that an employee costs about 30% more than their gross, which includes 9% mandatory superannuation, payroll tax, and other sundry employment costs.

alga8• 15 years ago

See! The net salary and the total cost of employment are the sole interesting figures when comparing internationally, the gross salary is a largely arbitrary figure between those two.

zeynalov4• 15 years ago

"Many of my employees would only come to work for me to learn my business secrets and to steal my clients."

For that issue there is a non-compete contract http://en.wikipedia.org/wiki/Non-compete_clause

andorjakab29• 15 years ago

Yeah, that's very nice when you have a working legal system. In Hungary a case like this will take 5 years, and you will most probably loose. They can steal your software, your artwork, your clients, your intellectual property, and you loose the case. Absurd. Happens all the time, not only to me. Judges are clueless in such matters.

zeynalov4• 15 years ago

Actually you're not alone. I have a startup in Azerbaijan, the same situation. I divided the work between workers, they can't to the work alone, so they don't know actually what they are doing. I teached the some parts of the business, they do the mechanical work, without asking the questions. I also made a non-compete clause between them for 2 years. Here are some tips from other HN community for this issue:

1. Split your workers into departments. No one single worker should handle all the processes.

2. Use forms to guide people through the process. It will make your processes easier to automate.

3. Take some upfront payment. That will discourage customers from dealing with your employees on the side.

Another trick that I learnt from somebody else is to hold one key process to yourself.

Someone I knew gets clothing manufactured in China. But before it is sold, they do an adjustment to it that is not known to the factory.

Just as Coke has its "secret recipe", you have to make clear to your freelancers that you have a secret step. It will be enough to discourage them from running away with business.

-----

teamonkey3• 15 years ago

Contracts often still have these clauses in the EU but they're unenforceable. Being able to work anywhere in the EU is considered a right, and these clauses attempt to block that right. You're not allowed to stop someone finding gainful employment, even if that could damage your own business.

georgieporgie• 15 years ago

This guy won't ever hire anyone because all he does is imagine the worst possible outcome for a given situation with no eye toward actual likelihood or his own ability to select a good candidate. Good luck with that attitude, 'entrepreneur'.

sirwitti• 15 years ago

[EDIT]: if you downvote, please explain why.

i understand that depending on your country it maybe hard to create good and profitable companies. i'm from austria, europe btw.

but on the other hand what to do with women and old people? i personally hate the idea of selecting employees this way. if nobody hired old people and women, someone, propably the state (read: everybody) had to pay for those people.

for me this boils down to a greater question: how to deal with work/life/family?

anybody here from a country with innovative ways of handling this?

blago• 15 years ago

What struck me was the premise of the article. Creating a startup company by selling your house is no walk in the park in any country. I can see a similar article written about the US. Quit whining, there are other ways. If there isn't a well developed capital market in Hungary, move somewhere else. Even in the States, there is only one silicon valley and people move there. A big part of the allure: access to capital.

andorjakab29• 15 years ago

It's an honour to be discussed here, HN is my #1 source of useful information. I won't disturb. But please let me use this chance to get some tech help. The Hungarian version of this post (http://jakabandor.blog.hu/2011/07/27/tolem_ezert_nem_kapsz_m...) has 'lost' it's Facebook likes. I can't figure out why. If you check it with a tool (http://saqoo.sh/a/labs/fblinkstats/) it's there, but 0 is displayed on the blog. Any ideas?

zeynalov4• 15 years ago

I see 91,143 people like this - on that blog post. Facebook like are seen when you type exact same URL. When there is a link with dynamic atributes like http://www....blogpost?commentform234 than it'll not show the likes, comments etc.

andorjakab29• 15 years ago

That's not the issue. It doesn't work with a clean URL either. What I see now is strange. It doesn't work with Firefox, but it does with Chrome. I have this issue for half a year now with likes disappearing.

GigabyteCoin2• 15 years ago

Is it just me or does this writer have an incredibly pessimistic view on his own workers?

Re [sic]: "they will just steal my ideas...", "women will take 6 year vacations (out of spite?)", etc.

andorjakab29• 15 years ago

It is reality. It does happen, that you're a smallbusiness owner, and somebody you used to hire 6 years ago shows up. She's back from maternity leave. And you have to rehire her, increase her salary to present level, pay her 4 months of fully paid vacation. And either grow your company - if you can -, or make room for her. How? By laying off somebody else. Maybe the one who had to hire when your employee 6 years ago went left to raise children. This is not a 'pessimistic view', this is what happens all the time.

GigabyteCoin2• 15 years ago

Nobody ever said the transition from a small business to big business is a simple one.

mtts4• 15 years ago

A classic among businessmen all over Europe (I'm Dutch).

And it's wrong(1).

When you spend 3000 Euros to hire someone who nets 1500 Euros, the difference is not "stolen" by the government, it's what you pay to have access to a pool of highly educated potential employees who get free(ish) health care, childcare, pensions that you as an employer don't have to worry about.

There are of course places where such taxes are not levvied, but it's a mistake to assume an employer can simply pocket the 1500 Euros difference as employees will demand higher salaries so they can save up for their own medical care, child care and pensions.

(1) Except the bit about maternity leave: it may not be three years (!) all over Europe but even if it's a mere six months it's enough to cause small businesses to be very reluctant to hire women in the child bearing age.

mseebach2• 15 years ago

Did you see the chart in the article? Did you read the bit in the article where he declared that he considers 30% fair?

According to the chart, Hungary takes 50% more than the Netherlands. Are there any objective metrics at all that suggests that Hungarians are 50% better educated, have 50% better health and child care or 50% better pensions?

Stealing might be an inflammatory word, but what's going on in Hungary (and, indeed, many other European countries) certainly isn't a mutually beneficial transaction.

mtts4• 15 years ago

Hungary might be an outlier but right after it comes France and I'd say that the French get quite a lot for their money.

So like most things, "it's complicated". This article oversimplifies to the point of it being flat out wrong.

And not only that, it's completely unoriginal, being an exact transcript of what every shopkeeper in Europe will tell you after you've bought him a few drinks.

fab13n2• 15 years ago

Do you realize 50% of a Hungarian salary is way less than 30% of a Dutch one?

The problem here is that Hungary's cash salaries are much cheaper than average, whereas Hungary's non-financial compensations are merely quite cheaper than average.

The only systemic problem described in the article is that private bosses have to shoulder the burden of helping mothers and older workers. Helping them is a societal decision, it ought to be supported by society: if you want to help pregnant women, let bosses fire them, then have the government compensate them with tax money coming from all companies, not only from those which hire child-bearing-age women.

fauigerzigerk2• 15 years ago

You're right, the money is not stolen and the comparisons to other countries/systems are sometimes very odd. But if you take away 50% from everybody, the assumption has to be that everybody wants to buy all the same things in the exact same amount and quality.

The government takes away your "right" to find your own balance between opportunity and security. The government takes away your choice and your power as a consumer to discriminate between different suppliers, which causes those suppliers to be worse than they might otherwise be. For some things, like health care, the assumption is broadly correct, if the quality controls work (that's a big if). For most other things it is not correct at all.

Not everybody wants to retire at the same age or at all. Not everybody wants to secure the same pension or start saving for it at the exact same time of their life. Not everybody wants to go to university. Not everybody wants to have children or send them to the exact same (mostly broken) type of school.

Not everybody wants to buy expensive protection against being fired or getting sick for a week. Not everybody wants to support the local opera house, museums, the government's very own TV network or that network's very own classical orchestra. Not everybody wants to subsidise railway lines to remote parts of the country or the post office there.

And then there's the problem that some groups of people that are close to the government or belong to well unionised traditional industries are getting a lot more out of it than everybody else. The system isn't driven by need, it's driven by affiliation. Affiliations are a complex web and hence entitlements are organised in an extremely complex and ineffecient way that makes people want to stay put once they have a achieved a certain entitlement status.

At the end of the day, we're paying 50% into government coffers and yet we have widespread poverty in many European countries because the poor are a minority without much of a say in anything.

I'm not arguing for letting people go hungry, untreated and homeless when they cannot help themselves. I'm arguing for redistributing money instead of forcing canned buying decisions on everybody. I'm convinced that catching those who fall does not take 50% of all monies earned.

mtts4• 15 years ago

There is not "widespread poverty in European countries". "Widespread poverty" is what they have in Africa. In Europe the poor are kept fed, housed and clothed precisely because the admittedly very large and inefficient in many ways governments spend some of the tax money they bring in to keep them that way.

This causes problems, to be sure, in that it disincentivises some, but not all wellfare recipients from trying to escape their poverty, but it prevents people from dying of hunger in the streets, which is, imho, a good thing.

georgefox5• 15 years ago

> But if you take away 50% from everybody, the assumption has to be that everybody wants to buy all the same things in the exact same amount and quality.

Not really. It's a matter of risk pooling and public good. In health insurance, for example, it's understandable for a healthy person to pay a premium higher than the value of the services he actually receives. In exchange, if he suddenly gets in a car accident, an expensive procedure may be affordable. Additionally, his disabled neighbor may be able to afford his otherwise extremely expensive care. This sort of scheme only works effectively when everyone participates, especially the healthy, low-cost folks, who bring down the cost for everyone else.

The same or similar concepts apply in unemployment insurance. Someone with a stable job may not feel he needs unemployment insurance, but paying into the system makes the system possible. If only the unemployed and underemployed paid for unemployment insurance, we wouldn't have such a thing.

With education, things are a little different. There are some people who will never have children to benefit from paying for public education, but these people indirectly benefit from living in an educated society. I don't have children, but I'm more than happy to contribute to public education, since I value literacy not only in myself but in others.

Arts (e.g., your TV, symphony, and museum examples) are basically an extension of education, though I suspect some people would probably argue against me there.

Infrastructure in rural areas is expensive, but in my experience, at least, those rural areas are often poorer than the more urban areas. Your options seem to be (a) cut those people off from society, (b) subsidize their infrastructure, or (c) pay them to move elsewhere. I think (b) is the most reasonable option.

In the end, the people in the most need generally have the least to offer, so the people with the most to offer either have to subsidize, or the least have to go starving. Universal, progressive taxation seems like a very reasonable way to accomplish the goals of a civilized society.

jbooth4• 15 years ago

If those things are predominantly healthcare, police protection, civil administration and national defense, then yeah, actually it's a pretty good assumption that everyone wants those things. The cultural items you cite are tiny as far as expenses, and presumably the're popular enough to resist periodic efforts to cut their funding. Any quibbles about apportionment and overhead from the government would be dwarfed by the inefficiencies of breaking them out of gov't (see the US healthcare system).

acslater00• 15 years ago

Nail on the head.

m_for_monkey4• 15 years ago

I don't really understand why maternity leave is a problem. The employer can hire someone for a specified time, say three years, then take back the young mom. In Hungary a lot of companies do this, and the new hires themselves are usually young women, who'd like to take the maternity in a few years, anyway.

zhemao4• 15 years ago

It's a problem when businesses still have to pay the employee's salary while she is on maternity leave in addition to the salary of her replacement. Also, there is a lot of productivity lost during the transitions. If it were me, I would prefer to keep the "replacement" rather than hire the old worker back. Apparently you can't do that in Hungary.

Confusion• 15 years ago

Don't underestimate the difference between The Netherlands and even a seemingly well developed country like Hungary. Our GDP per capita (PPP) is over twice theirs. What could you still do with half your income? Arguments that hold here don't just carry over to there.

alga8• 15 years ago

But they do. The philosophy of the system is the same, just the details, the macroeconomic variables are different. Hopefully they will even out in several decades. The Netherlands are a good example of what we are trying to achieve. (I live in Lithuania, a country with a similar GDP (PPP) per capita to Hungary.)

mihaela• 15 years ago

I'm a woman running a small ISV in Croatia, and a mother too. I would never hire a woman either, for the same reasons. As a matter of fact I wold not hire anyone locally, I just opted for the "outsoucing" via VAs and such. The thing is that it's very hard to fire someone, and human workers cost too much.

hmottestad3• 15 years ago

I always say. A country can be valued by how it protects it's weakest.

I wish people would realize that in a society we should all work together rather than have the strong huddle in a little pile and point and laugh at the weak or needy.

I propose a new law for Hungary saying that every company with more than 10 employees should have the same percentage of female/male as that of the population or in special cases (like with IT) that of the field at universities. This would stop some companies profiting from healthy 30 year old single men, and then throw them away like rags once they start feeling the pressure or want children.

To give incentive to the law I propose giving higher tax to those companies not following the laws and increasing them at an exponential rate yearly :)

daralthus• 15 years ago

The real problem is not that women won't get a job, but that the non-corrupt tax paying companies get kicked out of the price war, because they have to charge more, to compensate for the high taxes. Hungary takes more than a half of peoples salary (and a whole lot more after), and most of the companies just don't pay the taxes for your real salary, only for the minimal wage.

andorjakab29• 15 years ago

I'd like to think of myself as responsible person in all possible aspects. That of course means, that I'd like to be socially responsible too. I would even go as far as saying that I actually am socially responsible. My point is, the sort of regulations you are proposing don't work. They impossibly violate the rules of life, especially when it's a small business. These regulations do a lot of harm. I do believe seriuosly, that society must protect its weakest. So goverments should make it cheaper to employ them. That's fair enough. And then, please, let us do our business. We businesses are people too. We can't be treated like this, or we just can't survive. We have to close shop, if all sorts of regulations are against our freedom to do business the way we think it makes sense. Well, something like this... :)

hmottestad3• 15 years ago

If it governs every business I'm sure the fittest business would survive.

And I think that regulations mostly do good and are important to stop bullies from eating up society.

I'm sure most business thought that outlawing slaves in the US would ruin them. Now business are thinking that hiring women of child bearing age will ruin them. They probably also think that not being allowed to dump their waste in the river will ruin them too.

tbsdy• 15 years ago

Good. I wouldn't want to work for you, after all you seem to spend more time writing about why you want to fire me than how to make money!

henrikschroder5• 15 years ago

Yes, social responsibility is a bitch for the individual businessman. Boo hoo hoo.

But for society as a whole, these things are good. Long maternity (and paternity!) leave is good for the children that will one day grow up and become productive members of society. Having laws around parental leave preventing discrimination means that society doesn't have to deal with paying unemployment welfare for women around 30, and having a hard time re-integrating them into the workforce at 40. Instead this cost is spread out among all the companies in the form of employment laws.

I understand that all businesses wish to have a workforce consisting only of young well-educated males that are never sick, never take vacations and work lots of overtime, but there's a cost to getting that, and almost all businesses forget, or refuse to understand the value society provides to them. You want a workforce? Sure, it's gonna cost you, both in corporate taxes, and in social responsibility by employing less desireable individuals. Tough shit, pay up.

itmag3• 15 years ago

Why can't social responsibility be handled at a different layer, though? Why is it the individual businessman who has to pay special taxes for things like that? Why not just take it from general taxes across the board?

Here in Sweden, employing people can be a crippling move for small businesses.

phillmv• 15 years ago

>Why not just take it from general taxes across the board?

Politics. Most people don't see or hear about payroll taxes, but they would notice if you added 5% to their income taxes.

Plus, in a lot of cases it's administratively easier to say "the funding for this social program comes directly from this source of taxation".

You're right that taxes should be designed better; in a lot of cases they provide disincentives for a lot of beneficial behaviour. Taxes are just really hard to design correctly. It's a huge problem no one has control over.

henrikschroder5• 15 years ago

What do you think is more effective and cheaper? Legislate against discriminating against females of a certain age and punish companies that violate it, or increase the corporate tax with x%, have Skatteverket collect it, and politicians to re-distribute it in such a way as to provide jobs for females around 30?

andorjakab29• 15 years ago

It would be very easy to promote the employment of the elderly, the handicapped, whoever every normal person in the world wishes to help. The state should make it cheaper for me to employ them. It's that easy. Instead, they create regulations that harm those, who they aim to protect.

_dps3• 15 years ago

I think a demand that businesses undertake some social responsibility is sensible, given the privileges corporations receive (like limited liability). I think many people overlook that corporations are granted real privileges beyond those granted to individual citizens.

But I'd point out that, if one makes social responsibility particularly onerous on individual businesses, "You want a workforce? ... pay up" may reach equilibrium not by people paying up but by fewer and fewer wanting a workforce. Then everyone is poorer.

At the end of the day, businesses are started and run by people. Pro-little-guy positions like "tough shit, pay up" are aggressive stances not just against abstract legal entities but also against often-well-meaning individuals who aspire to offer products and services. Even people strongly aligned with European social democratic values agree that the government can't do everything, so if you want locally produced products and services you have to ensure that the conditions are suitable for people to do that.

Yet, somehow I don't think we'd feel the same sort of emotional satisfaction from "You want jobs? Tough shit, stop voting for policies that make it hard to offer them."

deadsy• 15 years ago

>given the privileges corporations receive (like limited liability)

Corporations don't receive limited liability. The owners of a corporation have limited liability.

andorjakab29• 15 years ago

"Pro-little-guy positions like "tough shit, pay up" are aggressive stances not just against abstract legal entities but also against often-well-meaning individuals who aspire to offer products and services." So nicely put. This was an important concern, why I decided to write this post from this perspective. "Business" is a person. I am a person. And if they treat me inhumanly, I die.

yummyfajitas16• 15 years ago

Instead this cost is spread out among all the companies in the form of employment laws.

No, it's spread out among all the companies that are willing to hire women. The companies that discriminate against women have a competitive advantage over those that don't.

(Note that under normal circumstances, discrimination is a competitive disadvantage. If I hated Indians, for example, I'd never have found my current team.)

kenjackson2• 15 years ago

This assumes that there are a sufficient supply of men who can perform better than women.

henrikschroder5• 15 years ago

Only in countries where there aren't any laws to even this out.

Where I live, there's plenty of laws that stop companies from discriminating against women, thereby removing the competitive advantage, which in turn forces the companies to do the right thing.

forza3• 15 years ago

I would have taught it's the opposite. If women are discriminated against because of having children, I guess the companies that doesn't discriminate against women (or even actively helps them) would get all the good ones?

myko2• 15 years ago

It is only a competitive advantage for those unwilling to hire women if the cost of hiring women is greater than the benefit of the perspective those women who were not hired could bring to the team. However I do not believe that this is the case.

scarmig• 15 years ago

Two issues:

1) You overstate the likelihood of the market driving out discrimination. Racist and sexist discrimination has existed for centuries without the market ever reaching the equilibrium state of no discrimination that would result if people were rational market participants (1).

2) Inevitably people bring up Scandinavia in these discussions, and for good reason. Scandinavian countries have both very generous family benefits (including paternal leave!) and high representation of women throughout the workforce. This isn't dispositive, but it does suggest the situation is much more complicated than the original post would suggest.

All in all, I prefer to live in a world where everyone pays their fair share instead of trying to eke out a couple extra cents of profit by not providing parental benefits to mothers and families.

(1)This is actually an even subtler issue, because it's possible for markets to exist where racism and sexism offer a competitive advantage, due to consumer preferences.

fragsworth• 15 years ago

"No, it's spread out among all the companies that are willing to hire women."

I don't think it's a black-and-white issue of giving or not giving a job. These types of government restrictions cause a change in the supply and demand for the protected individuals. This results in a change in their average salaries (i.e. more restrictions reduce salaries). Women are still worth hiring, just at a lower salary, to account for the added risk.

So in the end, the cost ends up being fronted by the women anyway.

Klinky3• 15 years ago

A whites only restaurant in a racist town doesn't seem very disadvantageous, in fact that would probably be the selling point.

I would imagine that those who don't discriminate would continue to not discriminate while those who do discriminate would continue to do so. Removing the law doesn't make women less likely to get pregnant. I am not sure your concept that we should remove the laws so that everyone can discriminate against women equally is really advantageous or very upstanding. Nor do I think the idea that people are going to discriminate despite the laws & it's too hard to prove that they're discriminating is a valid reason to remove the laws either.

kfcm2• 15 years ago

"Social responsibility" is a scam to part productive people from their hard-earned money and give it to the leeches of society who sit on their asses waiting for the next reality tv episode.

If a woman wants to have kids, that's fine. Don't ask me to pay for her decision; that's her husband's responsibility. Oh wait. She's an unwed mother, and the father can't be found? Then she made a piss-poor decision in not keeping the proverbial "gate closed", and should be the one dealing with the repercussions of it. Not me, my business, my employees, or my customers.

As for long maternity/paternity leaves being good for children...in what way? Does it teach children a solid work ethic? Or does it teach them they are entitled to copious amounts of time off at other people's expense?

"Social responsibility" is just another term for theft, pure and simple.

brown9-24• 15 years ago

The point is that the "social responsibility" produces a better overall society in the cases of the poor unwed mother you describe. The idea is that we all benefit. Those kids don't grow up in isolation and if they turn out to be bad/uneducated/criminal people, everyone else in society is affected.

You say it's a scam, but if so, who manufactured the scam? Are you telling me that those in power got together and decided to build a system which punishes the hardworking and rewards the lazy? Since when do people join a conspiracy to help others and hurt themselves?

You also make gross generalizations in describing the people that benefit from social programs. It's repulsive.

georgefox5• 15 years ago

I can't tell whether or not you're serious.

What if the woman was not poor or not unwed at the time of conception? What if her husband lost his job? Do you think having children should be a privilege limited only to married couples with at least a quarter million dollars in savings? And if so, do you at least support the state giving out free contraceptives to the "leeches" who aren't in such a financial position?

If a person can't afford their child, what do you recommend? Leave the kid near the dumpster to fend for him/herself? That'll teach a strong work ethic, right? Because we all know maternity leave is just a euphemism for vacation.

rjbond3rd• 15 years ago

You've just summarized the philosophy of Ayn Rand, yet you would not have hired her.

guga31bb• 15 years ago

There is plenty of evidence that maternal leave is beneficial for children. Go to Google Scholar and search "maternal leave child outcomes".

A sampling from one paper:

>We find considerable associations between early returns to work and many of the outcome measures [regular medical checkups and breastfeeding in the first year of life, the receipt of all DPT (diptheria, pertussis, and tetanus)/Oral Polio immunisations (in approximately the first 18 months of life) and cognitive and behavioural assessment scores at age 3 or 4]

http://onlinelibrary.wiley.com/doi/10.1111/j.0013-0133.2005....

zhemao4• 15 years ago

@georgefox, I do think that you shouldn't have children if you can't support them, but that is their decision to make, and they should bear the responsibility for their decision.

@brown9-2 In theory it does, but if businesses don't hire said unwed mothers because government policies make it too expensive, it doesn't benefit anyone.

jfresh13• 15 years ago

Totally disagree. Whats worse for society is a lack of jobs and miserable people that would bring up miserable kids.

If you've ever been an employer you would be able to relate, grow up.

fauigerzigerk2• 15 years ago

As long as the takeup of parental leave among men is as low as it is in most places (outside of Scandinavia), current laws are simply sexist. Women are not protected as much as they are stigmatised.

The cost is not spread around much at all. The entire burden is on women who are discriminated against because they cost more to employ and on small businesses that cannot shift jobs around as easily as big corporations can.

My preferred solution would be to exempt small business (those with less than 20 employees) and don't grant any parental leave or benefits unless both parents take equal leave (Obviously single parents have to be exempt).

walkon2• 15 years ago

Way to miss the point of the post. This person won't hire anyone because it is too expensive to run a company with employees. The point is, Hungary has created an environment that greatly threatens the profitability, and therefore, sustainability of private companies. If the company doesn't exist, no oneis hired.

anothermachine• 15 years ago

If laws would really require him to pay employees more than himself, he could offer partnerships instead of trying to exploit employees.

forza3• 15 years ago

I don't have much sympathy for companies who doesn't invest in their employees. If you value your employees and are in it for the long run, then your biggest problem are employees leaving you not the opposite.

Otherwise you are free to hire consultants and pay a premium to the agency and (hopefully) the consultant, but don't be surprised when they leave you in six months for something better (paid).

Also fresh graduates or self educated people are loyal and relatively cheap (especially in Sweden). But then you would of course have to invest in them.

jerf3• 15 years ago

"But for society as a whole, these things are good."

Then why not triple the existing benefits? Why not multiply them by 10 even? If it's an unalloyed good, then why are we being so stingy with the good stuff?

If you account for only one side of the ledger, you can make anything look good. (Or bad.) Unfortunately, reality checks both sides. Wrapping it in a social justice narrative may make it easier to obscure the ledger to other humans but it doesn't fool reality for one Plank instant.

henrikschroder5• 15 years ago

It is, as with almost everything in life, a balance.

It might be the case that the balance in Hungary is off as the author of the article claims, but that claim was buried in a one-sided rant against the cost of accessing the labour pool.

The point of my post was to even the scales, to remind everyone that it costs a lot of money to employ people, because creating employable people costs a lot of money. The CS college graduates we want to interview as potential employees of our dot-com startups don't materialize out of thin air. As cheesy as it sounds, previous generations invested in their future; we have to do the same.

potatolicious• 15 years ago

> "Then why not triple the existing benefits? Why not multiply them by 10 even? If it's an unalloyed good, then why are we being so stingy with the good stuff?"

What an absurd, and incredibly disingenuous thing to say. Water's good for you - in fact if you don't have it you die. So let's throw you in a huge pool and see how you like it!

Stop putting words in OP's mouth, and argue against his argument instead of twisting it into an easy straw man.

exor• 15 years ago

I run a business and could relate so strongly, I registered for HN just to comment: this is why I find it so difficult to hire locally in the U.S. - the incentives make it so much easier to offshore work.

antalbud2• 15 years ago

Dear Andor,

It is hard to leave this post without response. Both because I am Hungarian, and also because I happen to be an entrepreneur. The only reason I think this post deserves a response is because it seems you haven't started your business yet.

So here is my advice: don't do it. Just don't.

Not because of the taxes, but because of your utter lack of respect towards your future employees. If what's really holding you back is that you couldn't deliberately fire them, I see no reason why you would even want to hire them in the first place. I think what you don't realize is that you as an employer would become responsible for your people. They would depend on you and their monthly salary, and I think if you see your employees as some company assets you can just get rid of as soon as things get tough, you really shouldn't hire anyone to begin with.

I would like to believe you are slightly distorting reality to shake things up. But if you are actually serious about founding a business, I would suggest you do not hire your 12 males in their twenties right in the beginning, instead, you hire a few people you actually _want_ to work with, and pay them a decent salary. And pay the taxes, as high as they are. Just because _you_ would be happier with lower taxes, does not mean that it would help the country's economy. Maybe try innovating and charging more instead of low-balling.

andorjakab29• 15 years ago

Dear Antal,

I am well aware of this type of criticsm, because I've already got it with the original, Hungarian post. I could have rephrased it to avoid some of the misunderstanding. But I didn't change a word, only translated to English what has already provoked a lot of thought.

In fact during my long life as an entrepreneur I employed more people than most of my harshest critics. Most of my employees were actually women. I treated them with great respect and I'd like to believe they're thinking about me as a good boss.

In fact, this post isn't really about me. It's about something much bigger than me. I know it's provocative, over simplifies many things, even populist if you will. It's not an academic lecture. It's how many smallbusiness owners feel about an environment that is leathaly poisoned by corruption. In which being honest makes you very uncompetitive.

I get a lot of advice about how to survive under these circumstances, how to trick the system, how to avoid employees stealing my (intellectual) property, how to do business. In fact, that wasn't my point. I know all that. I'm fine, in fact I'm one of the last persons who will not be fine in Hungary.

In fact I don't mind high taxes and strong social security. What I'm worried about is that it's ok for others not paying these duties, and they make honest smallbusinesses uncompetitive. Among many other things that make this society really, badly, deeply screwed up.

So badly, that Hungary is now marching towards national socialism. Something, that every intellectual should fight tough against. And that's what I'll try to do with my blog.

antalbud2• 15 years ago

Yes, I get advice on how to cheat the system, too. But it does not mean it's the only way to succeed. Maybe I'm an odd case, but I have managed to build a business where I can still respect and pay my employees properly, where I could be happy if someone was having a baby, and where I pay my taxes properly. And I still make a profit. Yes, maybe I would earn more otherwise. But I have always seen it as a choice, and my integrity and the well-being of others was more important.

My point was only that the system is not _that_ bad that you wouldn't have a choice. Of course, that choice is yours to make.

lizzard• 15 years ago

This is why we need better legal and financial structures to create co-operative, worker-owned businesses.

alain94040• 15 years ago

Being from Europe originally and having lived in Silicon Valley now for more than 10 years, I did the math on comparative taxes.

In the end, it's a wash. If you take into account everything. I make more money in the US. But my retirement costs are higher. And by the time I put two kids through college (college is free in some European countries), it basically balances the extra cash I made over a 20-year career.

Of course, for any given situation (single, dual income no kids), your results will vary. But I'd argue that a household with 2 kids is fairly common.

kcima2• 15 years ago

Even if it is a wash, and the costs of things end up being the same, the real issue is the question of who should be spending the money you earn.

Should the government be allowed to forcibly take your earnings away to pay for your kids college and purchase retirement for you?

What if you decide your kids would be better off earning their own way through college, or what if you want to retire in a location with nice weather and a very low cost of living?

It sounds like living in Silicon Valley has not made you more wealthy, it's just provided you with a wealth of choices that the author of this article doesn't have.

ricardobeat4• 15 years ago

> It's only Hungary that is so fucked up

That's because you're only looking at Europe. Come to Brazil for a show (minus the huge maternity leave).

3pt141597• 15 years ago

I can't believe how pro-government interventionist the views are here. Sure the guy's rant was over the top, but isn't this Economics 101? Arn't all the added costs the government puts on hiring workers perfectly reflected in the supply demand curve resolution?

You might not hear about it all that much because it isn't cool to blog about it, but doesn't it make sense that women make less money when, on average, it costs more to hire them?

This isn't about right or wrong, it's math.

> Yes, social responsibility is a bitch for the individual businessman. Boo hoo hoo. - henrikschroder

Social responsibility for a business is to provide goods to the public through voluntary exchange while adhering to the non-aggression principle. Every other benefit should be provided by personal savings, family support, and voluntary donation. If you really want forced help to new mothers or other "disadvantaged" people then provide it by the state where the costs are transparent. The people hurt most by these policies are women who do not want to be mothers.

> But for society as a whole, these things are good. - henrikschroder

I disagree. These interventionist practices increase tension between subcultures. They turn the world into an "us" vs "them" environment, where it would be more optimal to have a "me" and "you" environment.

For example: Affirmative action. Many blacks that get into Harvard and graduate are treated as sub-students by employers like major banks. The reason is that by definition they have, on average, poorer standings when they enter university. A black person that truly deserved to get into Harvard is indistinguishable from one that got there only after the bump from affirmative action. Employers remembering their time at Harvard recall that the black people in there class, while smart, were not of the same caliber as the rest of the class on average.

Furthermore, since affirmative action shifts the whole bell curve to the right, blacks are disproportionally more likely to drop out of university, since they are likely the least academically qualified to be there. This creates further racism as over the years professors tend to note that the blacks they teach tend to drop out.

Another example: Social Security. While the baby boomers were all working they enjoyed some of the lowest rates around. Now forward projections show that the US is unable to meet its SS obligations. Again turning it into "us" vs "them" (Gen X/Y/Z vs Baby Boomers).

> Long maternity (and paternity!) leave is good for the children that will one day grow up and become productive members of society. Having laws around parental leave preventing discrimination means that society doesn't have to deal with paying unemployment welfare for women around 30, and having a hard time re-integrating them into the workforce at 40. Instead this cost is spread out among all the companies in the form of employment laws. - henrikschroder

People make choices. My choice may be to work until I have enough money to where I can earn enough interest passively while I go to Africa and join Engineers without Borders. Or my choice might be to have children. Either way, my productivity, savings, and future goals need to be harmonized for my plans to come to fruition.

Most responsible, productive people find it very easy to return to the workforce. Sometimes they are a step down or two (as in the case of my mother, who was a former research manager at IBM before she had my brother and me) but if their skills haven't eroded, they quickly gain back, and even exceed their position (she's now fairly high up at AT&T managing the internet pipes between Asia and the Americas, as well as VPN services to huge companies like Siemens).

If the problem that right to return to work solves is post child rearing un/underemployment, and the solution is to stem from the government, then the government should set up organizations that empower employment seeking mothers, not coerce organizations to hire them again.

Furthermore, I've never met any business owner that didn't want to rehire a former staff member after they have had their maternity leave. The only time I've seen someone lean on that law was when they knew they were going to get fired (written up twice out of three times) so they had a child to reset the write-up policy.

> I understand that all businesses wish to have a workforce consisting only of young well-educated males that are never sick, never take vacations and work lots of overtime, but there's a cost to getting that, and almost all businesses forget, or refuse to understand the value society provides to them. You want a workforce? Sure, it's gonna cost you, both in corporate taxes, and in social responsibility by employing less desireable individuals. Tough shit, pay up.

First off, most businesses do not want a workforce of men like me. Young, well-educated, male, lots of OT. We're too much like cowboys. We hate process. We hate meetings. We might be great at startups, but we are terrible in most other organizations, and yet most of us don't even know it.

As for the cost, "that is what the money is for" if it is citizens that want to be educated. Citizens that want to build roads. Citizens that want to have a safe and peaceful place to live and work. Citizens that want to buy products in an open market. Then those citizens will vote for those things. If you want to tax and impose rules on corporations then extend them the right to vote. No taxation without representation and all that (ironically, this is why governments are taken over by lobbyists, since the defense for having lobbyists was that the government makes rules that impact corporations and that corporations need "sway" in congress to protect their interests). Otherwise, recognize that the products that you use are brought by corporations to you, something most people forget.

> When you spend 3000 Euros to hire someone who nets 1500 Euros, the difference is not "stolen" by the government, it's what you pay to have access to a pool of highly educated potential employees who get free(ish) health care, childcare, pensions that you as an employer don't have to worry about. - mtts

It depends on how it has been "spent". From the employer's perspective income tax should be none of his concern. If the citizens vote for a 50% income tax then that is what they should see on their payment stub.

> Being from Europe originally and having lived in Silicon Valley now for more than 10 years, I did the math on comparative taxes. In the end, it's a wash. If you take into account everything. I make more money in the US. But my retirement costs are higher. And by the time I put two kids through college (college is free in some European countries), it basically balances the extra cash I made over a 20-year career. - alain94040

I did the math from Ontario, Canada to Texas a couple years ago. Even with a 10k bump in pay and full benefits, it was a wash. America pays a lot of taxes.

> I propose a new law for Hungary saying that every company with more than 10 employees should have the same percentage of female/male as that of the population or in special cases (like with IT) that of the field at universities. This would stop some companies profiting from healthy 30 year old single men, and then throw them away like rags once they start feeling the pressure or want children. - hmottestad

That would be disastrous. Special cases governed by whom? Elected officials? There is about another 500 pages of laws. Logging towns, IT, Nurses, flight attendants, basketball players, elementary teachers, the list goes on and on.

FrojoS• 15 years ago

> You might not hear about it all that much because it isn't cool to blog about it, but doesn't it make sense that women make less money when, on average, it costs more to hire them? This isn't about right or wrong, it's math.

Have there ever been lower taxes for women in any country? This would make sense, wouldn't it? Society wants (and needs) women to have children. So why shouldn't we pay for it, instead of the employer or the women employees?

xenophanes• 15 years ago

I don't want or need more women to have children, and I have no desire to pay for it.

Why can't we just let in more Chinese immigrants if there's not enough people? China already has plenty of people who want to have more children without me having to pay them to do it.

gphilip• 15 years ago

> Have there ever been lower taxes for women in any country?

Yes, that is the way it is in India, and it has been for many years now (as long as I remember). Here are the current rates: http://en.wikipedia.org/wiki/Income_tax_in_India#Tax_Rates

Also note that the rates are lower for those (of either gender) above 60, and lowest for those above 80.

3pt141597• 15 years ago

Interesting suggestion, but part of the problem is that a woman who works 5 out of 10 years at $100k pays the top marginal tax rate for those 5 years and no taxes for the next 5. A less ridiculous tax policy might get you that for free.

beambot• 15 years ago

Individuals (whether man, woman, or 'family') receive tax breaks for having children (ie. dependents) in the United States.

mobiplayer• 15 years ago

In Spain you pay less taxes for hiring a woman than a man. This also applies when hiring young or old or disabled people. So, you pay max taxes hiring a 30-some man without physical or mental disabilities.

nosse2• 15 years ago

That's happening in Finland, you earn less you pay taxes progressively less. And we have this thing called parental subsidy or something like that, it is about the money needed feed a child. Only thing this has solved is the possibility to have 20 children in one family. The new problem is that this one religious group is having those large families, and nobody seems to have the time to actually raise those kids.

poppysan2• 15 years ago

I find it hilarious when people state their partisan opinions as fact, and then sound surprised that some people believe otherwise. This is why every policy article turns into a flame-war.

Pro-government interventionist? You really mean the liberal democrat view. You shift closer on the pole to the conservative republican viewpoint. Simple as that. Lets not act as if either viewpoint is math here, and not just a set of ideas.

jbooth4• 15 years ago

Yeah, pro-government interventionist is a pretty hilarious phrasing. Let's talk in comical absolutes, that's guaranteed to generate insightful discussion.

What's anti-government interventionist? You don't believe in having police to intervene if you're getting your ass beat? Don't believe in courts to intervene in contract disputes? Man, I am so right I can barely stand it.

3pt141597• 15 years ago

Conservative Republicans are often in favor of government assistance to mothers because they want to encourage families. Conservative Republicans are in favor of wars without end, of a restrictive policy against drugs, of restrictive policies against the internet and are generally against the protection of the environment. They are for indefinite property ownership, even if we end up living to be 500 years old. They are against immigration. For the death penalty. For standing armies. For conscription in times of war. For a strong national government. For copyrighting a number. Against free use of encryption. For clandestine intelligence operations.

I'm none of those things. I'm a geolibertarian.

The math part of it was the resolution in the supply demand curve when government intervention increases the burdens on commerce, not whether or not the government should provide services to new mothers.

hazov• 15 years ago

Why can't you believe it?

Do you not deal with people in a daily basis that disagree with your libertarianism or your presuppositions?

I read you are a data guy, I am a statistician myself, dealing with data this should not surprise you.

3pt141597• 15 years ago

I've always found Hacker News to be, on average moderately libertarian. Californian libertarian if that makes sense. When I first got here most posts were fairly left of center, which greatly surprised me.

unavailable• 15 years ago

Those who add value, have nothing to fear. Anyone below average or anyone insecure about her value, wants socialism and unions.

The society-first groupthink belongs in the XX century with its mass conveyor belts and replaceable workers.

If anyone wants to survive today and tomorrow, they need to increase their individual value as set not by a government body, but by the market, aka flesh-and-blood people.

alga8• 15 years ago

On the contrary, "every man for himself" belongs in the XIX century. In essence, you're advocating that weaker individuals should be trampled under feet.

overgryphon2• 15 years ago

"doesn't it make sense that women make less money when, on average, it costs more to hire them?"

Why is there an assumption that a women should cost more to hire? Don't men also take paternity leave? Why is it assumed that a woman must be solely responsible for childcare? No one seems to worry that a man might have children when hiring.

joebadmo5• 15 years ago

I'll take issue with a specific point: affirmative action. Affirmative action starts with a premise different from yours: that college admissions shouldn't be about past performance but about future potential. And if there's nothing genetically wrong with black people, then blacks should be demographically represented in colleges. If they're not, then there's something wrong with admissions.

"A black person that truly deserved to get into Harvard..." You come from the premise that you deserve to get into college based on your past performance. That's valid, but you should be making arguments against the premises of the affirmative action, then.

"Furthermore, since affirmative action shifts the whole bell curve to the right, blacks are disproportionally more likely to drop out of university, since they are likely the least academically qualified to be there. This creates further racism as over the years professors tend to note that the blacks they teach tend to drop out."

According to the guiding principles behind affirmative action, this isn't simply a consequence of the policy, but another injustice to be addressed. Blacks aren't genetically predisposed to dropping out, they just have very different social and cultural circumstances that aren't conducive to graduating. The things that you (I presume) and I (I'm Asian) take for granted, many black people cannot. A proponent of affirmative action would argue that we need more social college programs that help and encourage black students in ways that lead to better graduation rates.

"Many blacks that get into Harvard and graduate are treated as sub-students by employers like major banks."

This is simply prejudice on the part of employers. Why should employers take into account how someone got into Harvard, instead of judging them solely on their performance at Harvard?

My point is that you apparently don't fully understand the premises and reasoning behind affirmative action. Many who oppose it don't.

[Edit]: I suppose my meta-point here is that it's easy to take a hard-line view when you don't fully grapple with the opposing argument. When you really fully try to understand the other side, you come to a more nuanced position, and a respect for the complexity of issues. I think it's parallel to the Dunning-Kruger insight that you don't know what you don't know. Certainty is a sign of ignorance, even in yourself. If you are certain about something, it's time to re-examine your assumptions.

ataggart• 15 years ago

>And if there's nothing genetically wrong with black people, then blacks should be demographically represented in colleges. If they're not, then there's something wrong with admissions.

Perhaps genetics and racism are not the only factors affecting demographic representation in colleges. See: Asians.

tzs• 15 years ago

> This is simply prejudice on the part of employers. Why should employers take into account how someone got into Harvard, instead of judging them solely on their performance at Harvard?

That's a good point for employers, where they can perhaps reasonably ask a new graduate for a copy of his transcript and see how well he actually did, but in a lot of cases someone evaluating a graduate does not have access to such details.

For instance, if I have to choose between two lawyers, or two doctors, and all I know is that they have degrees from the same school, and that one of them is in a group that was significantly under represented at that school before Affirmative Action and was not under represented afterwards, then it is, from a probabilistic point of view, in my interest to pick the one that was not from an Affirmative Action group.

Example: suppose a school has 1000 people in a given class. Before Affirmative action, the breakdown was 950 from group A and 50 from group B. Group B is 10% of the general population, so is under represented at this school. The school institutes an Affirmative Action program that lowers the standards for group B, so that they are able to change their class distribution to 900 A, 100 B.

If I later have to pick, say, a lawyer, and all I know is that they were both in that class, and one is an A and one is a B, if I pick an A then I get someone who I know met the original admission standards for the school. If I pick a B, there is a 50% chance he met those standards, and a 50% chance he was one of the ones who got in under the lower standard.

Without any other information, I'm clearly better off going with the A.

Note that this only applies to school where they lowered standards for group B to increase their numbers. There are other ways a school can try to get more B. Caltech, for instance, wants more females. Rather than lowering standards, they just try really hard to get any qualified women who apply to accept. They will send a representative to visit the woman and her family to pitch the benefits of Caltech, for instance, whereas if you are a man you'll only get that kind of treatment if you one of those once in a decade prodigies like a Peter Shor or an Arthur Rubin.

yummyfajitas16• 15 years ago

Affirmative action starts with a premise different from yours: that college admissions shouldn't be about past performance but about future potential.

Why do you believe a black applicant has higher future potential than an equally or more qualified white applicant?

At university of michigan, blacks were given 20 extra points on the admission point system, equivalent to 1 full point of GPA. A black student with a 2.6 GPA would be more likely to be admitted than a white or asian student with a 3.5. Why do you believe that this hypothetical black student has more future potential than the white or asian student?

And if there's nothing genetically wrong with black people, then blacks should be demographically represented in colleges.

Ignoring for the moment that we have little good data on whether or not there are relevant genetic differences between blacks and non-blacks, why would there need to be something genetically wrong for blacks to be underrepresented? Why couldn't (for example) cultural factors cause blacks to be less likely to perform well in school?

3pt141597• 15 years ago

I've actually read and thought about these issues quite thoroughly. I've changed my position on a number of opinions, most notably would be the idea that no one should own land indefinitely.

That certainty is a sign of ignorance and therefore I am ignorant because I am certain is false because that argument is circularly invalid. This statement: "If you are certain about something, it's time to re-examine your assumptions." Seems pretty certain to me.

But I'll cede that I do struggle with the complexities. A couple months ago I wrote this: http://zachaysan.tumblr.com/post/11602694501/on-economics where I outline past beliefs and why economic policy is hard to study empirically. To me it fundamentally comes down to ethics.

However, I do fully grapple with the opposing arguments that are in favor of Affirmative Action. I just reject them. I understand their side, I've just been lead to believe it is suboptimal.

"[I]f there's nothing genetically wrong with black people, then blacks should be demographically represented in colleges. "

That sounds like you are projecting your way of western thinking onto a subculture you probably don't fully understand. Maybe blacks culturally value things that we don't, like exercise or leisure. I don't know and I don't care because to me it is racist to favor or disfavor one group based on race. Furthermore it is an affront to liberty to force another institution to commence a transaction they do not want to do (allow a substandard applicant to join).

"Why should employers take into account how someone got into Harvard, instead of judging them solely on their performance at Harvard?"

I'm not saying they should, I'm saying that they do. If the side effect of them doing so (if their rational ends up being right) is that they get higher preforming workers then they will grow and this system of discrimination will grow with them. If they are wrong, then their competitors are able to get black graduates cheaper, and, at the margin, grow faster.

Alan Greenspan only hired female economists because he was convinced that they were just as smart as men, and he could pay them less. Of course his firm ended up being wildly successful.

I'll end with saying that Canada does not have an Affirmative Action policy, And I saw absolutely no systemic intellectual difference between them and the rest of the school.

"The things that you (I presume) and I (I'm Asian) take for granted, many black people cannot." Thomas Sowell, a world class economist, the black son of a poor single mom agrees with me on Affirmative Action. I go with appeal to authority because it is my only defense against an Ad hominem.

InclinedPlane5• 15 years ago

How will someone have an equal chance of succeeding in college if they have experienced a substandard education for the preceeding 13 years?

Affirmative action in college admissions is little more than tokenism. A way to cover up for the disparities in quality in K-12 education, to pretend socioeconomic differences dont aff

InclinedPlane5• 15 years ago

How will someone have an equal chance of succeeding in college if they have experienced a substandard education for the preceeding 13 years?

Affirmative action in college admissions is little more than tokenism. A way to cover up for the disparities in the quality in K-12 education, to pretend socioeconomic differences have no impact on college preparedness, and to white wash the fact that increasingly a high school diploma is no guarantee of a certain level of mastery of mathematics, literacy, etc. In short tweaking college admissions rates based on race is about the least effective way to try to fix problems in educational disparity or even to fix problems of race bias in college admissions.

Jach2• 15 years ago

> if there's nothing genetically wrong with black people, then blacks should be demographically represented in colleges. If they're not, then there's something wrong with admissions.

This is vague and not good reasoning. You say "nothing wrong with black people" (p) --> "demographically represented in colleges" (q). In your attempt at proof-by-contradiction, you notice that NOT(q) is true, which should imply NOT(p)--something is wrong with black people. We know that's not right either, so what's wrong here is the initial p-->q. So you set up a new p-->q with "there is nothing wrong with admissions" --> "blacks are admitted in a demographical proportion", note NOT(q) again and conclude that NOT(p) is true, that is, there must be something wrong with admissions. Whether one wants to accept this new p-->q is completely separate from the issue of something being wrong with black people. Outside of this logic, NOT(q) could be a sign of any number of things besides "there's a problem in admissions."

Of course, the reality is that there are several feedback loops, and the actual causality doesn't flow one way, so it's hard to reason about (1-bit logic is insufficient) and even hard to influence. One might go around starting with blacks were once thought of as genetically inferior which led to some aspects of their current culture, and now that the genetically-inferior problem is taken away, the bad aspects of some black culture are still there, and they in turn go on to feed the continuation of the culture as well as produce subpar students and other bad individuals who will then be noticed by well-off folks who will associate the race with bad people, not because of some thought that they think black people are genetically inferior, just that they've noticed a lot of bad black people--of course, this leads to effects that are barely different from those caused by people actually thinking black people are genetically inferior, so you have "racism" where "racists" can be backed by observation (limited or not) instead of prejudice which will continue to feed into parts of the loop. And forcing employers to hire substandard black workers is not sufficient to fix the problem in the cycle of substandard black workers being produced in the first place, which has many sources like black culture, "racists", its members being on average poor since no one wants to hire them and other reasons, and more. So you try to fix the poor problem, but you don't because it's not as easy as just making sure they can't be refused a job just on their race. So you get employers complaining about the ineffectual overhead, and you spawn a new type of racist who assumes all black people with jobs were put there instead of a more qualified white man due to affirmative action, and these new types of racists start feeding into the cycle too.

cousin_it• 15 years ago

> college admissions shouldn't be about past performance but about future potential

These two variables are highly correlated. Do you think adding a fudge factor for students from disadvantaged groups will give you a more accurate predictor of future potential than just looking at past performance? Is there any data to support that claim?

> Why should employers take into account how someone got into Harvard, instead of judging them solely on their performance at Harvard?

Judging them solely on their performance at Harvard should still lead you to the conclusion that AA students are worse performers on average. That's true even in the hypothetical world where AA students don't come from a disadvantaged group in the first place. If blue weasels and red weasels have exactly the same distribution of skill, and you add affirmative action in favor of blue weasels, then blue weasel students post-admission will underperform their red weasel peers on average, for reasons that seem mathematically obvious.

Ex-PraliteMonk• 15 years ago

A friend of mine, when filling out the paperwork for joining the army, listed as his race "North American Indian." He's a caucasian with a dark complexion, and he figured (rightfully so) that being misrepresented as a minority might be helpful in the future. Years later after he finished his Masters program I wonder if he got into the university because of affirmative action. In fact he might have taken the slot of a qualified black student. That would be something.

sydd• 15 years ago

The flaw in your argument is, that you are in a position, that you can afford to make such choices. Most people here are in a sector, that is in a bubble right now (IT/web), so they dont have much problem getting a high paying job (when people working for other industries are worried about getting any kind job.).

lifeisstillgood• 15 years ago

There is a worrying undercurrent of self sufficency worked for me, it should work for everyone in many us style right of centre commentary these days. I understand it's heart felt but

- most jobs don't pay enough to save. The average blue collar wage in US has not moved in nearly 30 years in dollar terms.

- most people (it seems) who push this view come from states that have lots of space few people and net inflowss of cash from the rest of the us.

In other words saying everyone should Save is a good idea but like saying everyone should be thin, we don't live in bodies or society adapted to make that happpen and it's not clear how to get there

hmottestad3• 15 years ago

>That would be disastrous. Special cases governed by whom? Elected officials? There is about another 500 pages of laws. Logging towns, IT, Nurses, flight attendants, basketball players, elementary teachers, the list goes on and on.

I don't think it would be disastrous. Except for it being a complicated law and wondering who would handle the special cases I don't see you giving any real reasons for it being disastrous.

In Norway we actually have such laws in place, though they don't govern employees, but rather the boards of big public companies and also all state owned companies.

I think some of the segregation of gender in certain workplaces is much due to there having always been segregation there and this affects the young because of their parents, social norms and just the plane average and normal. It's time to make a change.

Women should work and earn as much as men. Children should go to kindergarten from an early age to facilitate this.

cschwarm• 15 years ago

> … but isn't this Economics 101?

The problem, in my opinion, is that this is only Economics 101. During the last 50 years or so, economists found quite a lot of exceptions from the rules taught in this class.

What I find puzzling is that many American libertarians seem to be so intellectually lazy when it comes to Economics 102 if you can call it so. You may want to read "How markets fail" by John Cassidy to get an overview over the topic.

Here's a review by Business Week: http://www.businessweek.com/magazine/content/09_47/b41560797...

> This isn't about right or wrong, it's math.

You may want to read Hume, again. "Is" cannot justify "ought". Given an "ought", though, economic theory tells us that we (as a society) will be willing to bear the economic costs for a particular policy based on ethical considerations.

Material wealth is not the only thing worth having.

> They turn the world into an "us" vs "them" environment, where it would be more optimal to have a "me" and "you" environment.

Yes, it would be nice to have an 'me' vs. 'you' environment, but that's not going to happen under any law. Read up on a good book on social psychology: It will always be 'us' vs. 'them'. Men and women, for instance, have opposite preferences when it comes to mating. Young women will always have different preference to old women when it comes to finding a mate. Young men will always have different preference to old men when it comes to distribution of wealth. And these are just the preferences inspired by sex.

What would you do when all the roads around your house are owned by old men who double the prices for usage because they can?

How much liberty will you have, then?

zasz3• 15 years ago

I think some degree of affirmative action is good. Racism still exists, and explicit quotas to ensure that a few black applicants can get a spot at a college or a firm seems like a reasonable strategy to counteract kneejerk discrimination. It doesn't seem unlikely that given two equal applications, one with a black name and the other with a white name, that someone might consistently accept the white one instead.

zem• 15 years ago

> People make choices. My choice may be to work until I have enough money to where I can earn enough interest passively while I go to Africa and join Engineers without Borders. Or my choice might be to have children. Either way, my productivity, savings, and future goals need to be harmonized for my plans to come to fruition. Most responsible, productive people find it very easy to return to the workforce. Sometimes they are a step down or two (as in the case of my mother, who was a former research manager at IBM before she had my brother and me) but if their skills haven't eroded, they quickly gain back, and even exceed their position (she's now fairly high up at AT&T managing the internet pipes between Asia and the Americas, as well as VPN services to huge companies like Siemens).

what you are saying here is that, although having children is typically something that two people do, the onus falls on the woman to bear the career hit, and have to run faster and harder to return to the same place.

spindritf• 15 years ago

> the onus falls on the woman to bear the career hit

Yes, women have uteri and lactate while men don't. It really is that simple and societies have compensated for this for millennia by putting (or pressuring) an obligation to provide for a woman on the father of her children, a practice later institutionalized and extended in marriage.

Is there a better solution? Perhaps, perhaps not, but the reasons for that one are pretty clear.

Also, I'm a little concerned with the fact that this private family matter now involves government and employers. There is a worrying, at least to me, trend of corporations and governments regulating more and more of our private lives.

tokenadult• 15 years ago

For both discussions about governmental policies regarding conditions of employment and discussions about college admission policies, it's important to look deeply into the details of what the policies actually do. If long-term, sustained economic growth that spreads prosperity around the general population is the goal, then it is certainly possible to have too much governmental intervention, governmental intervention that denies employers flexibility and keeps the masses from helping themselves through free enterprise.

Your comment mentioned "affirmative action" in the context of college admission, and hived off many subcomments of varying quality. College admission practices in the United States are partly constrained by federal regulations (applicable to all colleges, government-run or privately run, that receive federal grants or admit students who receive federal financial aid) and partly constrained by state law in some states or by agreements in NCAA athletic conferences. Not all colleges have the same admission policy. Few people are aware that Harvard, which endeavors to interview all applicants for undergraduate admission and receives application forms with the applicant's real name in all cases, nonetheless reports to the federal government that 12 percent of its undergraduates are "race/ethnicity unknown."

http://members.ucan-network.org/harvard

In United States federal law, all colleges are required to ask their applicants and enrolled students questions about federal defined "race" and "ethnicity" categories. But students are not required to answer those questions, and more than 1 million currently enrolled students in United States colleges and universities are reported as "race/ethnicity unknown."

http://talk.collegeconfidential.com/college-admissions/12282...

I know a family of "black" people who have a daughter studying at Caltech, which is reputed to pay very little attention to "race" as an admission criterion. I knew that young woman as she was growing up (she and my oldest son were classmates in a mathematics summer program, through which I met her mother) and she certainly had a variety of college choices when she was applying for college. It may be that she particularly likes being at Caltech just because it is reputed to admit qualified applicants, period, without consideration of issues that don't pertain to the applicant's ability to succeed in a legendarily tough academic program. Throughout the United States, when organizations make clear what personal characteristics they are looking for, and what benefits there are to joining [insert name of college here, or insert name of employer here], then young people of all varieties of ethnic groups step up and develop the qualifications. One of the best ways to honor the young people who develop competitive qualifications for competitive opportunities is for colleges and employers to make clear that what they are looking for is qualified applicants, irrespective of the social categories the applicants may belong to.

jmcqk6• 15 years ago

>Social responsibility for a business is to provide goods to the public through voluntary exchange while adhering to the non-aggression principle.

Wouldn't it also be a social responsibility for a business to insure that they protect whatever commons(s) they interact with, like the environment?

I don't think their social responsibility is merely about providing goods, but behaving responsibly in all manners of conduct.

mekoka2• 15 years ago

Don't blame businesses, don't blame women. Blame governments that refuse the responsibilities of taking hard, but necessary decisions, because they're afraid it'll cost them votes. They instead play shady games that only appear to resolve issues, when all they do is to force/allow both businesses and people to dabble in gray areas.

Let's speak hypothetically. Let's say we're a government that sees that we have too many expenses and as a result have very high taxes. Yet, we still have some unresolved social issues for which we have no budget, such as maternity programs and 50+ employment protection (yes, these should be state responsibilities, no reason to offload it to businesses). We could decide to reshuffle our current programs to make room for these, but that would certainly means cutting into some other established programs (unpopular decisions = no no in politics). Alternatively, we could yet again openly increase taxes, at the risk of looking even more expensive than neighboring countries and losing even more businesses (no no). We will do neither, instead we'll come up with laws that makes us look good with the people (3 years maternity, ensured reemployment, 50+ protection, all bankrolled by businesses), while allowing employers to find loopholes (discrimination).

The issues themselves remain unresolved and everybody goes home happy.

rabble• 15 years ago

For what it's worth, the same basic setup is in place in Latin America. Brazil the effective cost is 2x the take home pay for people as well. Maternity leaves are much shorter, and you can fire somebody, you just need to pay a hefty severance. As somebody else mentioned, the way most companies work is to have each developer with their own tiny company.

GFischer2• 15 years ago

Be careful with that, if the tax authorities find out it can be construed as avoiding taxes (it's pretty complicated, but usually they'll find you in violation of at least one tax law as it's almost impossible not to).

Starting a business in Latin America is tough. There are huge incentives for tax evasion (and even when not, you might be evading unknowingly).

OpieCunningham10• 15 years ago

1- The competition sells the same service, but illegally, under really crappy circumstances, charging €9 per hour. They simply pocket the money, without even issuing an invoice, it doesn't even include the VAT. They don't have to take any responsibility, there are no warranties, they officially don't even do anything, there's not even an official, legal trace of their existence. They don't have to rent an office, hire an accountant. By doing this 5 hours a day, they can easily make €1,000. They would point their middle fingers to my €760 job offer, where they wouldn't be allowed to do crappy work, but show up in time every day and meet very high professional standards in their work, they wouldn't be allowed to defraud the customers, and if they did, they would be fired.

If your business plan calls for entering a market where the going hourly rate (legal or not) is 9 and you want to charge 37, your business plan is seriously flawed to the degree that every other explanation you've provided for not starting the business is moot. You have no business plan and therefore you won't hire anyone because you have no business. Find a new market.

2- The competition would do smear campaigns against my company. I would have to face anti-capitalist propaganda, I would be seen as a greedy asshole who charges €37 for what they charge €9, I would be an enemy of the nice Hungarian people, while others work honestly for the fraction of my price...

Without knowing what business you're talking about, it's hard to view this complaint as anything more than irrational defeatism.

3- Many of my employees would only come to work for me to learn my business secrets and to steal my clients. They would lure them by lying that they will get the same value and quality of service, but at the fraction of the price. After they stole enough clients, they would deliberately cause a lot of harm to my company to get themselves fired. They would then go to court, stating that I fired them illegally, and they would win the case. In the meantime, they would of course work happily for the stolen clientele, that has cost me a fortune to build up. And of course they would be offended. They would trumpet on all kind of forums, that they have worked for my company, they know what they're talking about. Not only it is very expensive, but the service is a piece of crap too.

Granted, I'm entirely unfamiliar with Hungarian employment law, but this also sounds like irrational defeatism, or at least a failure on your part to understand best practices in documenting employee behavior. In addition, why doesn't this cataclysmic issue affect the 9/hour competition?

4- Complaining about all this wouldn't help, no one would give a flying fuck.

Complaining about real issues is one thing. Complaining about the market when your business plan is pie-in-the-sky and everything and everyone is out to get you is quite another.

andorjakab29• 15 years ago

1) You don't get it. Your competitors cheat. Illegally. They don't pay customs, they don't pay taxes, they don't pay social security, and they get away with it. No matter how good your business plan is, your illegal competitors, who often shamelessly copy your otherwise excellent product / idea / service will do it for 1/3 of the price. They simply have a huge, very unfair advantage against us, who do business legally.

2.) This is personal experience, a lot of them, not a single case, and common sense in Hungary. Happens all the time. Our goverment does it for God's sakes. Read some Hungarian forums, and use Google translate.

3.) Because the €9 competition is mostly private persons. They don't hire anybody. Court cases here can last 5-10 years. 3-4 years is very common. And it really is very flawed. I tell you one example how intellectual property is treated. My blogpost was published in its entire length maybe a 1000 times without any permission, whatsoever. Including political parties. It doesn't even occur to their mind that's illegal. The same thing happens if your employees take away your client list, your software, whatever they can. You just don't win the case at court.

4) I know how to do business, my business plans are perfectly sound. This is a blogpost, with a fictional, generic scrap, so that everyday people get an idea. But your comment basically proves me right. People generally don't care, no matter if I whine. I can whine all day long, nobody gives a flying fuck. Not my goverment, not my customers, not the justice system, nobody cares if corruption kills my business. So, I don't give a job man.

OpieCunningham10• 15 years ago

You don't get it. Your competitors cheat. Illegally. They don't pay customs, they don't pay taxes, they don't pay social security, and they get away with it. No matter how good your business plan is, your illegal competitors, who often shamelessly copy your otherwise excellent product / idea / service will do it for 1/3 of the price. They simply have a huge, very unfair advantage against us, who do business legally.

You need to find a business which is less easy to copy and/or one in which you can offer significant benefit vs. an illegal competitor. It's that simple. In the U.S. we have an identical situation to what you describe in the services industry: outsourcing. I need to charge X in order to survive as, say, a web developer, whereas someone in India or Vietnam can charge 1/X for essentially the same service. Now it's my decision whether to create enough benefit for a customer to continue in that field, knowing that many potential customers will simply outsource, or identify another field where I can provide a service that is not as easily outsourced.

Competition is competition, in respect to your business plan the legality is irrelevant.

mcantelon• 15 years ago

>our customers would pay €37 / hour for our service.

That seems low.

mp76• 15 years ago

The links below present the governmental spending over the last 100 years or so: - this is partly in Romanian partly in English, but you should get the point: http://www.logec.ro/2011/12/12/ultima-prezentare-a-lui-lesze... - this is for US only: http://www.usgovernmentspending.com/us_20th_century_chart.ht...

What these tell me in simple words is that, more and more, some smart asses are taking decisions on our money. I really can't understand people arguing this as a good think as I can't understand how 300-1000 (representing government and parliement) persons do know better than we what we need. This trend is taking more and more from our rights to decide how, when and what we need. It also reduce the incentives to perform (as Jakab Andor put it in his article) and increase the stimulus for free rides. It also increase the chances of monopolies to develop with all the disadvantages that these are bringing (as a side note, by Misses these are the only real monopolies). Unfortunately, under current conditions, I don't believe this trend will change any time soon and we (both US and EU) have a good chance of becoming socialists with democratic hats in the next 50 years or so. This unless some major shift happens, but most probably this won't be a nice and quiet change. And, frankly, I'm not sure what freaks me out more: going in this direction or hopping for a sudden shift.

Secondly, I think discrimination per se is wrong and not productive. However, there are two contradictory types of laws that together increase the cost for a company: the ones that punish discriminations and the ones that adds taxes or additional costs for complying them. This leads to a natural behavior from the business side to reduce their cost. So, in this case I don't believe we are talking about discriminations per se, but about reducing costs in order to compete in a given market. In this respect, I totally agree with him. Whenever this conditions appears there's a good chance to create a black market. The size might differ from country to country based on culture, public enforcing power, the level o burden brought by regulation, but it will exist at some extent.

Coming back to the example with pregnant women, I don't think it's fair to say that we as a society want to stimulate birth, but "you" should bear the cost. It would be much fair to have this done on the society cost not on a particular business that have this case… for example, not by making the employer keep the job (or bear any other costs), but by supporting women until they get a job and perform additional activities to increase their changes to get a job. I'm not saying this is what I would recommend, but I think it's much better than the alternative.

However, I couldn't stop noticing that Jakab Andor only mentions to ways of doing business (besides the "do nothing" option): struggle with a regular business model with a small margin or cheat. These are both sadly choices. I think he missed the "think bigger", at higher margins, be faster or smarter approach.

dreamdu5t• 15 years ago

Why are businesses forced to pay for maternity leave, and not taxpayers?

kcima2• 15 years ago

Governments like the one described in this article remind me of a massive monolithic PHP program where all the functionality is lumped into a single blob of spaghetti code. Ugh.

The negative impact of government regulations like this are proved by reducing the size of a company to one.

Example: if you start a business, and hire yourself as the first employee, should you be forced to give yourself 3 years off for maternity leave?

Of course you could never do this. It would kill your business instantly.

Just like the Unix philosophy of writing programs that do one thing and do it well. Society functions better when we have many smaller social institutions with focused roles.

Government doesn't need to do everything. There are plenty of other social constructs that have proven more capable of providing many of society's needs.

Governments should stick to the task of protecting individual liberty.

Businesses should stick to the task of providing quality and innovative goods and services.

Family, community, churches and private charity should stick to the task of taking care of those less fortunate.

We as programmers and developers can help improve society by demanding that (like our small but beautiful software), social institutions stick to singular responsibilities to which they are most suited.

alga8• 15 years ago

If you want USA, you know where to find it.

16s2• 15 years ago

I had a female boss once. She said the exact same thing about not hiring women because they get pregnant.

I'm a man in the U.S.A. We don't have all of the laws as described in this article (most of us can be fired for any reason at any time). We're on our own. My wife got 4 weeks leave when she gave birth and that was at 50% of her normal income. Then she went back to work (and governments wonder why births are declining).

Anyway, I was shocked that my boss felt that way about women employees and because she was so matter of fact about it. She didn't have children herself and was past child-bearing age. She was very successful (several master degrees and a very wealthy husband). She was one of the best managers I ever had. But basically, she was a woman who would not hire other women.

andorjakab29• 15 years ago

My message is completely different. I do want women to be able to have a long, paid maternity leave. It makes sense. But my goverment shouldn't kill my business either. Isn't that fair to ask? When I'm doing business, I'm a paying a ton of money, thousand times more than the average guy. It doesn't make sense to further punish me, through killing my business via absurd regulations that don't make sense.

16s2• 15 years ago

Oh yes. I was just sharing my past experience. I don't mean to take a side.

alga8• 15 years ago

Then you're not making sense. Do you want to be able to fire pregnant women, or do you want to be able to refuse them employment after they return? That would be a horrible thing to do, perhaps it's good that you're not an employer then ;-)

jasiek• 15 years ago

This, I find interesting - it would seem to me that gender equality to some extent is in the interest of business. If before, only men would be working and provide for the entire family, nowadays, you can hire both the man and the woman, because otherwise they might not be able to support themselves on a single salary. So you get roughly 2x the labor power of a population, while increasing wage competition, driving wages down.

danbmil992• 15 years ago

This is so, so true. Whether through pure rational amoral choice, or subconsciously, every employer knows that some employees come with a hidden extra cost.

In the US, maternity (+paternity) isn't crazy in most states, and I suspect that's not a major issue. However, the fact that anyone but a white male has potential cause to sue if fired (due to their ability to claim gender or race discrimination), is a subtle but insidious reason to think twice about hiring a woman or person of color.

The truth is that these sort of market-distorting regulations, while possibly well intended, frequently end up hurting the people they are designed to help.

hodbby• 15 years ago

Although each country has its own rules (maternity leaves, vacations, VAT, etc...) but the problems are common share to all of us. Great post!

WhatsHisName• 15 years ago

Based on the discussions I can't help but wonder how many people here recognize that this article was written for Hungary and not the USA?

swah• 15 years ago

That's pretty much the same reason why Milton Friedman is against a minimum wage stipulated by state.

factorizer• 15 years ago

people like these are what class struggle is for, amirite?

dr_win• 15 years ago

my solution: get into business where you can hire machines, not people + outsource the rest.

digitalengineer• 15 years ago

The country of Hungary is almost broke. It's big, bloated government and corruption that's the cause. Hell, the guy's post reads like Atlas Shrugged and he's John Galt. He's "stopping the motor of the world" If you haven't read it, have a look: http://en.wikipedia.org/wiki/Atlas_Shrugged

This is why I don't give you a job

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