Earlier quoted context omitted.
TANSTAAFL. (There Ain't No Such Thing As A Free Lunch.) The downside of employee protections is that it makes companies more reluctant to hire. And also once hired, the salary to be offered is reduced to cover the estimated current value of the future employee protections. These are real downsides, particularly for young people who are trying to get a foot into the corporate ladder. I have even personally witnessed a…
> TANSTAAFL. (There Ain't No Such Thing As A Free Lunch.) Maybe not, but the world isn't zero-sum. Some things really do raise or lower the overall average. > I have even personally witnessed a situation where a company evaluated a legal change to increase employee protections, and decided to layoff almost everyone in a particular country before the new law took effect. (The company was Pictage, the country was Argen…
At-will is a huge risk for the individual, since they're going from roughly 100 % employment to 0 % employment.
On the other hand, in a decently sized organisation (where employee protection is typically enforced), being stuck with a bad employee and asking them for meaningless work that bothers nobody else means paying for 100 % capacity and only getting, say, 94 % of it. Over a large number of employees, the organisation can be fairly confident of what this percentage will be. Much smaller risk.
In other words, the utility cost for the employer of employee protection is smaller than the utility cost of at-will for the individual.
(Homeowner's insurance is a similar type of situation. Makes no sense to the individual if you look at the dollar costs, but in terms of utiles it does actually work out for both parties in most cases. Another case is hedging major business expenses -- costs more, but you and the counterparty both lose fewer utiles from it.)