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A subtle effect of dismissal regulation is that it penalises workers who are risky for employers, such as those returning to work after a break to rear children, those with a disability, or from particular racial groups. The most vulnerable in the labour market miss out as employers lean towards 'safe' workers.
Some commentators have latched on to Benedict's encyclical Caritas in Veritate as a new 'third way' between socialism and capitalism. This is a remarkably bad idea.