The labor market. Employment and unemployment

2024 Author: Henry Conors | [email protected]. Last modified: 2024-02-12 02:40

Unemployment in a country can be compared to employee turnover in a company - they have a lot of similarities. An increase in these indicators above the norm is a formidable sign that not everything is in order in the Danish kingdom. The reasons for the increase can be very different, they need to be de alt with. And most importantly, you can’t just get rid of one or the other. High unemployment, as well as high turnover, must be fought for months, quarters and years. And follow them all your life, because the problems of employment and unemployment are eternal…

First, let's deal with the wording of the main concepts. This is important because the labor market, employment and unemployment are hot and “butt” topics, they touch upon issues of economics, politics, management, new technologies, etc. And where there are many participants with their own opinions, wording is simply a disaster: some in the woods, some for firewood.

Employment is the activity of the population that generates income.
Unemployment is the presence of unemployed people who have no income.
The labor market is the interaction of labor supply and demand.
Workforce ispeople willing to work for hire.

That's it, that's enough to move on.

Employment classification

Depending on the level of participation of the working population, the forms of employment are as follows:

Full employment is the dream of politicians, officials and just good people. With full employment, everyone who wants and can work is provided with work. An important condition for such an idyll is the exact balance between the demand and supply of labor. The unemployment rate in this case is natural (see below).
Productive employment – the economically active population is employed in social production.
Rational employment is a variant of free employment, in which the “right” people work in the “right” places, in other words, this is a high correspondence of the employee to their jobs. Employment and unemployment in this case is close to the ideal balance in the labor market.
Efficient employment - maximum effect at minimum cost. This refers to the use of labor resources, leading to the maximum material effect at low social costs.

Employment forms, rear view

Forms of employment are also divided according to the conditions of employment.

On ownership of the means of production:

Employment with a classic owner-employee relationship.
Entrepreneurship.
Self-employment.

At the place wherework in progress:

Employment at the enterprise.
Employment from home.
Shift method.

According to the regularity of work activities:

Permanent employment - most often it is an 8-hour working day or a 40-hour working week, less often the number of working hours per month is used.
Temporary employment - fixed-term work, business trips.
Seasonal Employment - work during a certain season.
Sporadic employment - short-term work without a contract.

According to the legality of the device for work:

Formal employment (the one that is registered).
Informal employment - without any registration.

The form of employment can also be basic and additional, with a rigid or flexible work schedule.

"Non-terrible" types of unemployment

As mentioned above, unemployment is the presence of unemployed people who do not have earnings.

Formulation is one thing, understanding the essence of this complex and multifaceted phenomenon is another. First you need to decide who exactly should be considered unemployed. The fact is that in different countries of the world the structure of the unemployed is understood and considered differently, which must be taken into account before making loud comparisons and conclusions.

In the UK, the unemployed are all those who are unemployed for one week + looking for a job/waiting for results/sick during that week. In Japan, the unemployed are all those who have not worked one hour for one week. In the Russian Federation to the unemployedincludes all able-bodied people who are unemployed and without income, looking for a job, ready to start it and registered with the employment service.

Unemployment refers to negative social phenomena. But it also has positive aspects, because its presence leads to competition within the labor market, an increase in the value of jobs, the formation of a labor reserve, etc. The two types of unemployment below are just phenomena without a negative meaning:

Frictional unemployment - fixing the time spent looking for a job. This period usually lasts from one to three months. Frictional unemployment is observed even at full employment, when the labor market is in equilibrium: the demand for labor is approximately equal to its supply. Even in this ideal state, frictional unemployment will still occur. Someone was fired, and he is looking for a new job, someone draws up the necessary documents before applying for a job - there are many reasons and options for short periods without work between registered jobs. Frictional unemployment can be called "voluntary breaks in work activities." This is the most harmless and, to a certain extent, even desirable type of unemployment, everyone should have such unemployment…

Structural unemployment occurs when the demand for certain labor changes. Such situations can occur as a result of scientific and technological progress or the emergence of new technologies, improvement of production. An example is the historical "uselessness" of lifters. Sostructural unemployment can be effectively combated: this is one of the rare cases that can and should be prevented, there are no surprises here. Retraining, training in new professions, social support and adaptation - this is an incomplete set of tools to prevent painful structural unemployment

Voluntary unemployment is recorded among people who simply do not want to work

Natural unemployment with components

Structural unemployment is often considered in the same package as frictional unemployment: laid-off employees as part of structural unemployment begin to look for a new job and become involved in frictional unemployment. Labor, employment and unemployment in such situations are very closely interconnected, some sociologists simply consider these data as one type of unemployment.

Both types of unemployment always exist, even with the most favorable picture in the labor market. People will always move from one job to another, and entrepreneurs will always optimize processes. In other words, the labor market is in dynamic equilibrium all the time – supply and demand fluctuate.

Natural unemployment always accompanies full employment, it inevitably arises as a result of employee turnover, technological changes in industries, migration processes, etc. This also includes frictional and structural unemployment. This type of unemployment has nothing to do with economic growth or crisis and occurs only with a normal balance of labor in the market. And balance is the situationwhen the number of those who are looking for work is equal to the number of vacancies in the labor market

Now you can clarify the concept of full employment:

Full employment and unemployment are not mutually exclusive. Full employment does not mean complete unemployment - this does not happen in nature. Full employment is accompanied by a minimum level of natural unemployment. Employment and unemployment always go side by side, they are an inseparable social and statistical couple.

Starting to worry

Seasonal employment and unemployment occur with the seasonal nature of work in some sectors of the economy (agriculture, tourism, construction, etc.).
Regional unemployment occurs in places where significant social changes are taking place - either the closure of a city-forming plant, or natural disasters, or political changes.
Economic unemployment - the most "honest", arises as a result of marketing and competitive wars with the defeat of some manufacturers.
Marginal unemployment is observed among vulnerable segments of the population (disabled people, youth, women).
Institutional unemployment arises from purely internal causes of the labor market itself, in particular, factors affecting the supply and demand of labor.

Unemployment rates

First of all, these are two main indicators:

The unemployment rate shows the percentage of the actual unemployed in the economically active population or in the workingstrength. Duration of unemployment - the number of months without work of a particular person. Most often, people find a new job within a few months. But there is a category of long-term unemployed who cannot find a job for a long time, for years.
The level of employment and unemployment in the countries of the twenty significantly exceeds Russian figures. The long-term champion of Europe in terms of unemployment was and is Spain with its level of 26%. On average, unemployment in the European Union is within the digital corridor within 11-12% against the average level of employment and unemployment in the Russian Federation within 5%.

Not bad, especially in recent years, the situation with unemployment in the United States, where it reaches 7.6%, which is considered a merit of Barack Obama.

Norms in employment and unemployment do not exist: too different countries, traditions, calculation systems and so on. It is better to compare by year in dynamics, and not by country. It must be said that professional statistics on the labor market and unemployment are rather cumbersome with numerous detailed indicators. Such figures are published everywhere, finding them is not a problem. It is not the purpose of this article to list all of these indicators. It is much more important to understand the essence and concepts of employment and unemployment.

Causes of unemployment

Inflated cost (wages) of labor. Most often, it is required by labor sellers - potential employees. Trade unions join in these demands.
Lower labor costs demanded and set by buyers (employers). The opportunity for the employer to dictate the price depends on the characteristics of the labor market - for example, in regions with an overabundance of labor, buyers of labor try to reduce the offered wage as much as possible. If sellers (workers) refuse to sell their labor at a low price, they become unemployed.
The absence of the price of labor is observed when a category of citizens appears, for whose work no one wants to pay. These are vagrants, disabled people, drug users, ex-prisoners and others. This category constitutes the long-term unemployed group.

As a result, we can conclude that unemployment occurs when there is an imbalance in the labor market associated with the supply and demand of labor.

labor market employment and unemployment

Consequences of unemployment

They are extremely serious. Economic impact first:

Decrease in the standard of living of the unemployed themselves - they are left without a livelihood.
Decrease in the level of wages of workers, as in the course of competition in the labor market, the price of labor is reduced.
Decrease in the volume of goods and services due to underproduction and underutilization of opportunities.
Increasing taxes on the employed population to support the unemployed in the form of benefits and compensation.

Now the social consequences of unemployment, which are especially unpleasant and long lasting:

Tension in society.
The increase in crime due to offenses by the non-working part of the population.
Increase in casesdeviant behavior among the unemployed - up to alcoholism and suicide.
Behavioral deformation of the personality of non-working people, breaking their social ties, loss of qualifications, breakups of families.

Unemployment and employment in Russia

There is no need to prove a direct connection between economic crises and rising unemployment and a decrease in employment. The Russian labor landscape is no exception. The crisis of 2014 began to manifest itself in the labor market in 2015 in the form of rising unemployment.

The peculiarity was that the official statistical indicators of employment and unemployment differed from the real ones not at all for the better. There are explanations for this. The fact is that statistics for the country are formed through the analysis of sample data. No data is collected in Crimea.

Keep worrying

In December 2017, the Ministry of Economic Development reported on the historical minimum of unemployment in the Russian Federation: it happened in September 2017 and amounted to 4.9%. One way or another, the unemployment rate is close to 5%, which could be regarded as a very positive trend in the economy as a whole. However, it is too early to rejoice and draw conclusions. Statistics is a multifaceted and ambiguous science, especially when it comes to pressing social issues. Exact figures and charts by year are published in numerous reviews.

If we talk about general trends, then so far the problems of employment and unemployment in the Russian Federation have not been resolved. And the big pictureneither joy nor optimism. Unemployment cannot be considered separately from other social statistics. Its reduction is not due to the employment of people who were unemployed, but due to a decrease in the number of economically active people. The population is aging, the ratio of old people to young people is changing, and there are fewer people of working age. We should not forget about hidden unemployment and citizens about whom there is no data in Rosstat.

Methods to combat unemployment

The main role in unemployment and employment regulation belongs to the state. The most effective means of managing unemployment appear to be:

Retraining of the unemployed.
State support for private entrepreneurs (as buyers of labor in the labor market).
Programs to increase jobs.
Training for different populations.
Unemployment Social Security.
International Migration Coordination.
Providing community service.

The specifics of Russian unemployment lies in economic instability and motley demographics by region. The highest unemployment, for example, is observed in regions with a high birth rate - the Caucasian republics, which have always been distinguished by sad statistics of employment and unemployment. The second most important "suppliers" of high unemployment are the so-called mono-cities - settlements with large city-formingenterprises in crisis sectors of the economy. In general, the unemployment rate is kept at a more or less acceptable level - about 5%. But, as already stated above, such indicators should always be considered and analyzed in the context of extended employment and unemployment statistics in addition to other indicators of the economy.