When Getting Fired Should Be Against the Law
WHY YOU SHOULD CARE
Maybe it’s not a bad idea to take a page out of the crumbling economy that is Venezuela.
By Nathan Siegel
There’s not much to envy about the Venezuelan economy: As oil prices dive, inflation has reached staggering heights, and basic goods like food and medicine are running short. But the country does have one piece of good news, though: Venezuelans won’t get fired this year.
How? Why? Whaaa?
Since companies can’t downsize during the current economic collapse, many businesses will go bankrupt — and everyone gets laid off.
That’s right. In January, in the direct opposite of a hiring freeze, Venezuelan president Nicolás Maduro decreed that companies won’t be able to let anyone go in 2015. It’s a bold and oft-tried move by a leader facing the total collapse of his nation’s economy. And you know what? Maybe it’s a policy whose time has come — at least in very specific situations.
OK, we’re not calling for socialism or communism — please lay off, McCarthyites. But the strategy may be particularly effective where labor protections don’t really exist. In an ideal world, government entities would protect workers from labor injustices, but we live in far from an ideal world. Changes wrought by globalization happen fast, much faster than any paper-pushing labor bureau could keep up with.
Same goes for countries dominated by individual oligarchs, who control large swaths of resources. While trying to wrangle power from the private sector, sometimes the state has to use forms of “economic warfare,” says Alejandro Velasco, an assistant professor of Latin American studies at New York University. But before you think it’s just socialist meccas in Latin America fixing employment, the United States has done similar things in the past. Remember the New Deal, through which thousands of unemployed were picked up by the state to fix up national parks and clean highways? Yep, pretty much the same thing.
Of course, if not used sparingly, mandating employment can be crippling for the economy, as it has been for Venezuela and likely will continue to be in 2015. Since companies can’t downsize during the current economic collapse, many businesses will just go bankrupt — that way, everyone gets laid off in the end, says Steve Hanke, chief economic minister for Venezuela’s former President Rafael Caldera. In the end, it’s just a political tool. Maduro can point at the unemployment statistics and say, “Look, we care about you, the people,” says Hanke, without actually needing a healthy economy.
And even though it goes against everything we learned in Economics 101, full employment comes with a host of social benefits, from keeping the jobless off the streets (and potentially protesting) to reducing crime to providing citizens with a sense of dignity. Besides, at least for now, it’s good for everyone’s résumé.