In the majority of regions in the United States, employers are free to (and often chose to) use at-will employment contracts. Federal and state governments provide very little employment protection legislation (EPL) to prevent employers from firing or carrying out massive layoffs to support company interests. In contrast, most Western European countries do not utilize and forbid at-will employment and have stringent policies in place that are designed to protect employees’ jobs. On the surface, it would appear that the labor laws developed in Western Europe and other countries would benefit their employees, for in theory, they would experience greater job security and less unemployment. However, upon further examination, it becomes apparent that EPL has various implications and may pose adverse affects on employment. This short essay attempts to demonstrate why the United States should not incorporate additional EPL. It also addresses the relevance of at-will employment and its effect on the current labor market. Lastly, it gives examples of how workers protections potentially have hurt European industries and the implications of increasing workers protections in American companies as it relates to their abilities to compete globally.
Deregulating the labor market is a very controversial subject and is at the center of debate among employers, employees, lawyers and lawmakers. The decision on what is the best course of action to implement involves weighing the prospective benefits against the possible implications of employment protection legislation. The benefits can be observed by viewing some of the countries in Western Europe. France, Greece, Germany and Portugal, to name a few, have very strict rules when it comes to hiring, firing, layoffs and other employment protections. Per the Organisation for Economic Co-operation and Development (OECD Policy Brief, September 2004, p. 2) a benefit of job protection legislation is that it reduces firings and increases...
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