Unemployment is stagnant - that sounds pessimistic. But is it all that scary?

2024 Author: Henry Conors | [email protected]. Last modified: 2024-02-12 02:42

In difficult times of economic and financial crises, the term "stagnant unemployment" is ubiquitous. This concept does not inspire hope, but rather, on the contrary, aggravates the situation even more. But knowing the interpretation of terms, the causes of this phenomenon, the features of its course and possible consequences reduces panic and makes it possible to objectively assess the situation.

Meaning of the concept

The term "unemployment" refers to a socio-economic phenomenon in which part of the country's able-bodied population is not employed in the production process. The situation in which absolutely all citizens of the state work is impossible even with forced employment, so there is the concept of a normal (natural) level. In addition, according to their manifestation, different forms of unemployment are distinguished: open, hidden, fluid, stagnant. Each of them has its own characteristics, causes and consequences. SoThus, stagnant unemployment is just one of the manifestations of an economic phenomenon. We will consider all its nuances and subtleties below.

Who are the "unemployed"?

In order to correctly understand the essence of the whole phenomenon, it is worth understanding who exactly we are talking about. The unemployed are people who have reached working age and do not have a disability or other good reasons not to be employed. This category of citizens also does not include those who are on an old-age pension, on parental leave, are guardians of incapacitated persons requiring constant care, etc.

Persistent unemployment characterizes that part of the population that is unemployed for a long time of its own accord. This category includes:

• People working without official employment (illegal).
• Population employed at home without official registration (artisans, freelancers, etc.).
• People who could not find a job for a long time and, having lost hope, stopped all searches.
• Citizens whose education, profession, skills and abilities are not in demand in the labor market.
• "Dubious elements" - thieves, homeless people, tramps, beggars, people with alcohol or drug addiction.

Causes of occurrence

In addition to the classic economic downturns, reduced production and a general decline in living standards, the causes of long-term unemployment can also be identifiedbased on the list of persons whom this phenomenon covers. For example:

• The growth of taxes and fees leads to the departure of a number of enterprises "into the shadow", i.e. people working there are moving from officially employed to permanently unemployed.
• A sharp change in the economic system or the direction of production activities. A vivid example of this can be the 90s: the professions and speci alties of people who worked for a long time at the enterprises of the USSR turned out to be unclaimed in the newly created independent states.
• Low wages (labor costs) are forcing citizens to abandon full-time employment in favor of crafts or freelancing.
• Extensive amnesties lead to an increase in the population of able-bodied persons who find it difficult to find a good job for a long time.

Negatives

If no action is taken to level the problem, then the rise in the level will continue, and long-term unemployment will lead to a number of negative consequences. These include:

• The growth of social tension and the aggravation of the crime situation.
• Decrease in budget revenues.
• Increase in the cost of unemployment benefits.
• Underproduction of GDP, GNP.
• Growing gap between social strata of the population.

Who's in charge?

Unemployment is stagnant - this is a problem of the scale of the whole country, respectively, and it should be solved by state authoritiesauthorities. To date, in addition to traditional payments and one-time financial assistance, several fairly effective ways to combat this phenomenon have been developed and implemented:

• State employment centers offer citizens whose professions, knowledge, skills and abilities are not in demand on the labor market to take retraining courses and get the opportunity to find a job in another speci alty.
• Special rehabilitation centers help people overcome alcohol and drug addiction, as well as get an education and start working.
• Corrections provide training for convicts in working speci alties to facilitate their adaptation to normal working life after release.
• A number of different measures for the official registration and state registration of entrepreneurial activities of those citizens who work at home.

These programs require considerable funds from the budget, but over time they will give a fairly good result.

Positives

Unemployment is stagnant - it's not only negative consequences. Like any socio-economic phenomenon, it also has its advantages:

• Creating a labor reserve.
• Stimulation of government agencies to develop and implement various measures and programs that can offer solutions to several programs at once.
• Increasing the social value and importance of labor among the population.

So the soci althe economic phenomenon called “long-term unemployment” is not catastrophic or hopeless for the country, but requires government intervention and control.