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.

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.

Aw, someone at the Economist is a sci-fi nerd: all the subheds in the story are titles of Isaac Asimov stories (or spoofs of said titles).

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.