This is why I don't give you a job - <AUTHOR> http://andorjakab.blog.hu/2012/01/06/this_is_why_i_don_t_give_you_a_job <comment><USER9> 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.

<comment><USER10> 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.

<comment><USER9> 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.

<comment><USER10> I'm not saying, that it's _that_ bad, that it's actually _impossible_ for everybody, in every case. It it _was_ that bad, it would be too bad. :) It would mean, there would not be any companies left. My point is, goverments should not promote the idea, that employers and employees are enemies. Because they're not. Or as somebody here has put it, "business are people". I am, for one.

</comment></comment></comment></comment><comment><USER3> 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.

<comment><USER11> _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.)

<comment><USER12> 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.

<comment><USER13> Scandinavians have sane laws about parental leaves : both parents get the same amount. Therefore if you hire someone in the 25-30 age range, there is a high risk of having to do without this employee, regardless of his/her gender. IIRC, the rule is 12 months to be split between the two parents, no part being smaller than 2 months.

<comment><USER14> The 'down' side is that now us guys also get discriminated against. I've been more or less asked straight out about my family situation at a job interview, and I could tell from the expressions on their faces that they didn't like my answer, and I didn't get the job. Of course it's impossible to say why, as there where a couple of other good reasons why they might have rejected me.

</comment></comment></comment></comment></comment><comment><USER4> 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.

<comment><USER15> 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.

<comment><USER16> _> 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.

<comment><USER17> I don't know if what I am saying contradicts you, but health insurance certainly can serve a rational purpose even if everyone that bought it was young and healthy. You premium simply needs to cover the average cost per subscriber plus some profit for the provider. It can (and possible _should_ ) also function the way you describe with the lower cost subscriber subsidizing the cost of the higher cost subscribers. But that is not an inherent part of insurance.

<comment><USER16> Agreed, that's a huge part of health insurance, and that's why I would never consider dropping coverage. But in practice, wouldn't health insurance almost have to subsidize the expenses of high-cost folks at the expense of low-cost folks? Actuarially, you'd have to manage to get exactly the average cost from each subscriber (plus an equal or proportional amount of profit) in order for that not to happen.

Now I'm assuming you're strictly talking about health insurance (though the same concept applies to homeowner's insurance, etc.), but isn't subsidizing high-risk/high-cost subscribers inherent in some forms of insurance? Take a pension, for example. Some people will live much longer than expected; some will die a year after they retire. The only way to account for this, other than periodically adjusting each retiree's income based on how unhealthy they are, is to pay for the pension of one ancient retiree with the funds from one who died young.

</comment></comment></comment></comment></comment><comment><USER18> 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.

<comment><USER19> 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.

<comment><USER20> For those of you who've used the Hamachi VPN software, LogMeIn are the guys behind it.

<comment><USER21> Arhh yes, the open source VPN software that LogMeIn decided to buy that they essentially broke the app with a software update to then force everyone to pay _(I don't have the exact figure)_ something like $200+ a year to use.

I remember those guys!

</comment></comment></comment></comment><comment><USER22> 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.

<comment><USER23> 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.)

<comment><USER24> 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.

<comment><USER10> I agree, that this problem is the most obvious with small companies. But I think that even on the national scales these regulations harm those, whom they aim to protect. It's a wrong concept to treat the employer and employee like enemies. The good concepts would be win-win-win scenarios. For example, goverments should REDUCE the cost of hiring the handicapped instead of forcing companies to hire them.

<comment><USER24> A government can't say "no prenancy until you have saved enough to raise your child without working", it's unenforcable.

If you force companies to pay for women being pregnant and raising children, companies hurt. If you force companies not to pay, women hurt because pregnancy means instant unemployment and loss of income. If government pays, everyone pays in taxes even startups and people with no children (but at least the cost is spread widely). If nobody pays and it's left to charity, women and children live in poverty and suffer from that.

In individual cases, a couple can choose when to have children such that they can win no matter the situation, by deciding to save, or arrange to live on one income, etc. But I don't see any win-win scenarios that can be enforced from outside by legislation. Can you?

 _For example, goverments should REDUCE the cost of hiring the handicapped instead of forcing companies to hire them._

How could they do that (without charging you taxes to pay for it)?

<comment><USER10> "How could they do that (without charging you taxes to pay for it)?"

Easy.

Let's say, in my country €760 NET is a very good salary. If I advertise the job, I get thousands of people to choose from. Some of them will be handicapped. Let's say there is a goverment regulations, that employing the handicapped is duty-free, like cigarettes at the airports. Now I have two options. I either choose somebody who isn't duty-free, and pay €1572 (the empoyee still gets only €760), or, if I'm LUCKY, I will find a somebody suitable for the job among the handicapped persons, and I can choose him or her for the job. That way I've cut my employment costs two half, without paying ANY taxes. It's a nobrainer, even if I have to make some changes in my office to accomodate it for the duty-free person. Because I can slash my employment costs into half on the long run, without paying 1 cent less Salary than to everybody else. And the state? It's a win-win-win. Now they have a lot less people to worry about.

</comment></comment></comment></comment></comment></comment><comment><USER25> 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.

<comment><USER26> 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.

<comment><USER27> 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)

<comment><USER28> Good luck at your next meeting with the firing squad!

</comment></comment></comment></comment><comment><USER29> 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.

<comment><USER30> >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.

<comment><USER19> 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.

<comment><USER10> Of course they do sue. There is the whole "Munkaügyi Bíróság" (Work Court or whatever) to deal with the zillion lawsuits against companies firing people. And I'm not saying it's wrong. I'm saying, more often than not, these regulations backfire, and harm those, whom they should protect. Goverments create an environment in which employer and employee see each others as enemies, literally. They promote this view. Here I experience public anger against companies, investors, banks, especially multinational companies, but even smaller companies, who look successful. "Workers" see companies as their enemies. This is plain wrong, and bad, and nobody benefits. Only the corrupt, inefficent, incompetent goverments.

<comment><USER19> Yes, you're right. My point was that Hungary is _probably_ still better than say the United States, which is famous for being a very litigious nation. Unfortunately, I can't find number to back up my gut feeling.

</comment></comment></comment></comment></comment><comment><USER31> 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.

</comment><comment><USER32> 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.

<comment><USER33> 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!

<comment><USER32> 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.

<comment><USER33> I do not understand. Is your comment even related to the article at all then? This whole article is about how startups don't work in Hungary, and you're talking about how this is evidence why startups are so much better?

<comment><USER34> I think you're right; you don't understand. He's taking the arguments made in the sub as to why it's hard to start a business in Europe, and extending them to the inherent competitive advantage of startups over large corporations elsewhere. The fact that startups largely don't have to deal with the issues described in the sub, while large corporations do, contributes to this advantage.

</comment></comment></comment></comment></comment><comment><USER35> 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.

</comment><comment><USER36> Sort of "meta", but interesting: [http://andorjakab.blog.hu/2012/01/03/hungary_not_funny_anymo...](http://andorjakab.blog.hu/2012/01/03/hungary_not_funny_anymore)

 _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 ..._

<comment><USER33> What made it big should have been obvious- it hit a nerve. It rang true. He wasn't just ranting and making shit up.

<comment><USER37> 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.

</comment></comment></comment><comment><USER38> 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.

<comment><USER39> 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.

<comment><USER38> 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.

</comment></comment></comment><comment><USER40> 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).

<comment><USER41> Why do you think being able to fire any employee for any reason is not a good idea?

<comment><USER42> 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.

<comment><USER43> I think you're confusing "rights" and "freedom to persue".

Capitalism is about free trade and _voluntary_ exchange (of whatever); "right to profit" and "right to salary" sound both horrible and rather anti- capitalistic.

<comment><USER42> Actually agree with you that maybe I shouldn't have gone for capitalism to get my point across. But then again aren't you confusing the concepts of "free market economy" and capitalism with the former just being one possible form of the latter. Another possible form being a "social market" which should allow for some kind of state intervention on a lot of the issues being raised here.

PS A genuine thank you for engaging in discussion as opposed to hit and run downvoting

</comment></comment></comment></comment></comment><comment><USER44> 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.

<comment><USER45> 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.

<comment><USER46> 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.

</comment></comment></comment><comment><USER10> 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...](http://jakabandor.blog.hu/2011/07/27/tolem_ezert_nem_kapsz_munkat)) 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?

<comment><USER47> 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.

<comment><USER10> 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.

</comment></comment></comment><comment><USER48> 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. - <USER3>

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. - <USER3>

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. - <USER4>

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. - <USER5>

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. - <USER6>

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.

<comment><USER49> 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.

<comment><USER50> > 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.

<comment><USER49> I think implicit in your calculation here is that someone let in on AA grounds is inferior to someone who wasn't. But the premise of AA is the exact reverse, in fact. Saw two candidates A and B are born with equal amount of future potential: 100fp. Candidate B, for reasons of systematic circumstance, did not perform well before college. Without accounting for systematic circumstance, then, candidate C, who was born with only 90fp, will get admitted before B, even though his fp is higher.

It's not a matter of lowering standards, but normalizing them across racial lines.

A common data-based rebuttal to this is that minority/AA students tend to perform worse even in school than their non-AA counterparts. But that's a separate issue, and is pretty obviously going to be the case considering a lifetime of circumstance. The AA response to this is to promote programs that help AA students to overcome their past circumstances and perform to their full potential.

Your example of Caltech is great! That's a perfectly valid way to normalize demographics, I think, but it doesn't seem to exclude AA or even address the same issue. They seem perfectly complementary to me.

<comment><USER11> _A common data-based rebuttal to this is that..._

What data would persuade you that future potential is not equal, if actual data on future (relative to the time of admission) performance does not?

I'm curious whether your beliefs are falsifiable.

</comment></comment></comment></comment></comment><comment><USER51> 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.

</comment><comment><USER6> 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 :)

<comment><USER10> 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... :)

<comment><USER6> 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.

<comment><USER10> You see, they DON'T govern every business. That's the issue. They govern only the decent, good businesses. This die, the corrupt ones (that are NOT governed by any regulations, nor taxes, nada) survive.

</comment></comment></comment></comment><comment><USER52> 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.

<comment><USER53> 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.

<comment><USER54> 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.

<comment><USER55> If he's in Virginia (I was there 9 years), it takes a significant income to have a home. My old one bedroom condo at 835 sqft was 240k in 2005. A single family home in a reasonable neighborhood starts at $300k pretty easily which is easily 2-3x prices here in Austin.

The problem is that salaries in DC aren't double Austin.. they're more like 1.3-1.5x.

Also, once you're about the 50k threshold for income, some of those deductions - like for student loans - start decreasing and disappear.

<comment><USER54> A $300k single family home is a starter home in the upper middle class.

The only deductions I mentioned --- mortgage interest and state taxes --- don't vanish at $50k.

</comment></comment></comment></comment></comment><comment><USER56> 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.

</comment><comment><USER57> 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.

<comment><USER10> 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.

<comment><USER57> Nobody ever said the transition from a small business to big business is a simple one.

<comment><USER10> Especially not this way. Whenever the goverment says they're about to help us in the transition, I'm already in horror.

</comment></comment></comment></comment><comment><USER5> 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.

<comment><USER58> 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.

</comment></comment><comment><USER59> 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.

<comment><USER36> 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 - <USER7> 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.

<comment><USER60> That's how things are done in Korea. Your official salary is only a tiny fraction of your actual salary.

<comment><USER61> Care to elaborate? I've been thinking of possibly setting up some kind of shop in Korea, so it would be interesting to know more.

<comment><USER60> My ex was Korean. Her dad worked at an insurance company, and every month he got his (tiny) official salary as well as an envelop full of cash, which was 4x more money. I asked her about it and she said small companies are normally completely "off the grid" from a tax standpoint, so mid-sized companies need to do this to compete. And they all do.

She opened a bar and never, you know, registered as a business or kept books or did any of the other business things you'd need to do in the US to stay out of jail.

Her impression was tax receipts come mostly from the giant _chaebol_ like LG and Samsung.

<comment><USER61> OK, thanks for the information! I wonder how all those small companies manage their cashflow though. Can they receive money to their bank accounts just like they would if paying taxes? It's kind of difficult to imagine they're all shuffling cash around.

<comment><USER60> My impression (maybe wrong) is that Korea doesn't have the cash reporting rules we have in the US. So yeah. Cash.

</comment></comment></comment></comment></comment></comment></comment><comment><USER62> 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?

<comment><USER63> In Hungary smaller companies usually cheat on their taxes... it's a national sport.

<comment><USER62> haha I really do believe that is true.

</comment></comment></comment><comment><USER64> 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.

<comment><USER10> 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.

<comment><USER46> 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 ;-)

<comment><USER10> You misunderstand. Taking care of people is not my responsibilty. It's the state's responisbility. That's why we pay all the taxes and social security.

A business - especially a small business - isn't a place for altruism. I just can't afford hiring people to help them get along with their lives. A business is a business, not social welfare itself. It pays for welfare, but it _is_ not welfare.

I stated exactly what I want. I want to be able to decide on my own, who I hire, who I do not hire. It is as simple as this. They CAN create regulations that FORCE me, but then I choose NOT to do business.

I also suggest other means of helping underpriviliged people to obtain jobs. Such as making me pay LESS if I employ them. That would make sense, in business terms too.

</comment></comment></comment></comment><comment><USER65> Simple solution - gender equality for time off related to pregnancy. Paternity leave for the same length of time.

<comment><USER66> Simpler solution. Let people make arrangements they want.

<comment><USER23> 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.)

<comment><USER67> If it's really true that someone who just started work can immediately take three years maternal leave off, fully paid, and then be due 2.5 months accrued paid vacation time when they return, then I can't imagine how that could work. I don't know if it really works that way in Hungary though, or in Sweden for that matter.

<comment><USER68> In Sweden you wouldn't get 2.5 months of accrued paid vacation, it's more like 10 days, as the first 120 days (of 480) (pa/)maternal leave is counted towards vacation.

Then again you have the legal right to take 25 days of vacation per year, but not all of these have to be paid.

</comment></comment></comment></comment></comment><comment><USER58> 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.

<comment><USER46> If you want USA, you know where to find it.

</comment></comment><comment><USER69> 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.

</comment><comment><USER70> 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.

</comment><comment><USER71> 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.

<comment><USER72> 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).

</comment></comment><comment><USER73> This is why we need better legal and financial structures to create co- operative, worker-owned businesses.

</comment><comment><USER74> 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.

</comment><comment><USER75> 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.

<comment><USER46> Na-ah. The €9/hr "competition" are students living on instant noodles. You can't make a business out of that.

</comment></comment><comment><USER76> 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. - <USER8> incentives make it so much easier to offshore work.

</comment><comment><USER77> 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>

</comment><comment><USER78> > 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).

</comment><comment><USER47> "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>

<comment><USER10> 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.

<comment><USER47> 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.

\-----

<comment><USER10> Look, of course it's possible to find workarounds. But the issue is still valid. There's a huge problem with work ethics. People too often feel they have the right to steal whatever they like, unless of course I can stop them. And the issue is still there. Our justice system does not do justice. I don't want to create an 1984 work envorinment. I do want to trust the people I'm working with. And if they - after signing all the good contracts - in an environment that is built on mutual trust, they steal my property, I want the justice system to do justice.

<comment><USER79> "people too often feel they have the right to steal whatever they like, unless of course I can stop them." - so as long as _THEY_ are powerless (or proportionately dis-empowered at least), _YOU_ can reap the upside of risks taken where the downside has been externalised? Sounds like "theft" to me! Who exactly do you want the justice system to do "justice" for?

Property is theft :p

<comment><USER10> Look, what's mine is mine. It should not be legal to steal it.

</comment></comment></comment></comment></comment></comment><comment><USER80> pathetic reasons for not hiring women.

<comment><USER81> 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.

</comment></comment><comment><USER82> Although each country has its own rules (maternity leaves, vacations, VAT, etc...) but the problems are common share to all of us. Great post!

</comment><comment><USER83> 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?

</comment><comment><USER84> [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?

</comment><comment><USER85> _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.

<comment><USER10> 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.

<comment><USER85> _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.

<comment><USER10> Outsourcing is similar, but still very different issue. Agreed, as a web developer you have to compete with worldwide competition, that may be "unfair". Yes, you have to find a business plan, that still works. It's that easy.

But nationwide local corruption is a different game. Let's say you run a small restaurant. The guy next door opens one, and their menu is as good as yours, but costs 1/2 of your prices. You can't match them, because of all the dirty tactics. You have two options. Go out of business, or start using those dirty tactics too, and then you become a part of the problem.

You can tell me there are other options, like, I don't know, turning my restaurant to something completely different, but the principle still stands. Whatever I do, if it's successful, illegals will copy it exactly, but sell cheaper. It's just a question of time. It's a national sport.

It's the survival of the most corrupt (not the fittest).

</comment></comment></comment></comment><comment><USER86> That's pretty much the same reason why Milton Friedman is against a minimum wage stipulated by state.

</comment><comment><USER87> Why are businesses forced to pay for maternity leave, and not taxpayers?

</comment><comment><USER88> >our customers would pay €37 / hour for our service.

That seems low.

</comment><comment><USER89> my solution: get into business where you can hire machines, not people + outsource the rest.

</comment><comment><USER90> people like these are what class struggle is for, amirite?

</comment><comment><USER91> 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...](http://www.logec.ro/2011/12/12/ultima-prezentare-a-lui-leszek- balcerowicz-despre-cum-pune-statul-frana-cresterii-economice/) \- this is for US only: [http://www.usgovernmentspending.com/us_20th_century_chart.ht...](http://www.usgovernmentspending.com/us_20th_century_chart.html)

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.

</comment><comment><USER92> 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!

</comment><comment><USER93> 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'.

</comment><comment><USER94> This guy is a complete asshole. Why is this #1 on HN?

<comment><USER95> 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?.

</comment></comment><comment><USER96> 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.

</comment><comment><USER97> 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.

</comment><comment><USER98> 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?

<comment><USER99> 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.

<comment><USER98> 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...</comment></comment></comment>


.Org registry sale officially terminated - <AUTHOR> https://domainnamewire.com/2020/05/12/org-registry-sale-officially-terminated/ <comment><USER2> This decision is both good and wise.</comment>