In the system of economic relations it is impossible to do without such a specific product as labor. The labor market (as this component of the economy is most often called) is the most important sphere of the political and social life of society. It is here that employment conditions are fixed and wage rates are developed. Naturally, the labor market is based on supply and demand, like any other. Features of its formation will be considered in the article.
About supply and demand
The demand for labor in the labor market appears as a need to fill vacancies and perform certain tasks. Between applicants in most countries there is a competition for every paid place. The offer on the labor market appears in the form of the presence of a free working population or employed individuals, but wishing for a change for the better and looking for another, more profitable position. Not only an active society competes in the struggle for the best condition, but there are times when employers try to get specialists in certain professions that are advantageous in terms of qualitative composition, less often quantitative, they are looking for exactly what they need.
The demand for labor in the labor market affects the dynamics of employment, and most importantly, the state of the economy in each phase of this cycle. Scientific and technological progress is also making major adjustments that increase the need for an active population. Supply as well as demand are affected by a number of factors. These are moments of migration policy, demography - everything that characterizes the economic activity of various groups of the population, affecting the supply of labor in the market. This is the current state of the economy, affecting demand. The population, for example, in Russia is economically active in the part that provides the supply of labor for production needs. In terms of numbers, the unemployed, the active, and the self-employed belong to this category of people in the labor market.
About forms of employment
People who are arranged under a contract or a civil labor contract, at enterprises (the form of ownership is not important here), at any other paid service, those engaged in entrepreneurship, belong to the category of employed. Also this group in the labor market includes: self-employed (self-employed) self-employed, military personnel holding positions in internal affairs bodies, those who receive full-time education in professional educational institutions who are not currently working for a good reason retraining, temporary disability, vacation.
Unemployed people are quite able-bodied people who do not have earnings, who have registered with the bodies dealing with employment issues, who are looking for vacancies and are ready to begin any duties. However, the supply of labor on the labor market is excessive, and therefore they cannot do this. Fighting such a socio-economic phenomenon as forced unemployment is impossible even in highly developed countries, from a material point of view.
The unemployment rate is characterized by certain indicators and is calculated as the significance of the number of inactive population in the number of economically employed groups of people. Judging by all available data, the global labor market is almost constantly crowded. This problem is more or less prolonged. Here, the calculation is carried out according to the period of time when a person is looking for work - from the moment of losing the previous job and until the period that is being considered.
About unemployment
Unemployment can be natural and forced in the labor market. Demand and supply of labor are not in a long balance. If the obstacles to finding a job cannot be removed, this is natural unemployment. When it takes such forms that can exist besides this reason and thereby increases the level of unemployment, it is forced unemployment. For the natural, characterized by the best reserve of a competitive labor market, able to move between industries and regions, responding to fluctuations in demand and production needs.
Natural unemployment is heterogeneous in composition, and therefore it is customary to subdivide it into types: voluntary, institutional and frictional. The latter is also called current, because it is usually caused by staff turnover, not mass layoffs from institutions or enterprises (most often - at the request of the employee, which is why this type refers to natural unemployment).
In this way, the international labor market is exchanged by highly professional specialists, that is, such unemployment is needed and useful. The place of employment changes precisely because a person deserves more favorable working conditions with a high salary and promotion. Frictional unemployment is harmful only in cases when its level exceeds the average.
Institutional and voluntary unemployment
This type of unemployment appeared in connection with the peculiarities of the labor market, legal norms, and other factors affecting supply and demand. Most often, the movement in this area is inertial, rebuilds more slowly than production. Qualification levels, structure and diversity of professions and other characteristics are gradually changing, and as a result, the market lags behind the enterprise and its needs.
Therefore, an institutional type of unemployment appeared, and it was these factors that influenced its development. The labor market is characterized by imperfect information: people often do not know about the appearance of free places. Unlike other types, voluntary inactivity appears under the condition that the able-bodied population does not want to work anywhere - for various reasons. Many believe that this type is consistent with natural unemployment.
Other types of unemployment
Forced unemployment is also divided into several types. They study the hidden, regional, structural, technological forms. The latter is most noticeable in those countries where the scientific and technological revolution has triumphed and the level of income on average is very high. With this combination, it is precisely the reduction of workers that becomes economically effective, and this is a phenomenon in highly developed countries all the time.
Scientific and technological development and structural unemployment have made it normal: old industries are being reduced, new ones are developing, where recruitment is direct, and vocational training always takes a lot of time. Dismissed specialists do not immediately settle in another place, for some period they will need state assistance, as well as the support of the enterprises themselves, which organize vocational training and retraining, taking into account the requirements of the new leadership.
Inactive people everywhere receive appropriate material support. The formation of the labor market is always moving with some effort, since supply and demand rarely correspond to each other due to constant structural changes.
About migrants
As for regional unemployment, this is basically only one characteristic: the occurrence of an excess of active power in some areas, due to natural or geographical factors unfavorable for any kind of economic activity. Thus, developed countries are filled with labor migrants from depressed regions or places where hostilities are taking place. In Russia, they come from Central and Southeast Asia, in European countries from the Middle East and Central Asia, in America from Mexico, China and other zones. Wages in the labor market are very different: the same work for local people is paid higher than for migrants.
If the country's market mechanisms are deeply deformed, hidden unemployment appears. First of all, there should be an incentive to work, and if it is not there, productivity will be low. Any number of examples when one rate is divided into two, which indicates that you need only one job, the other is superfluous. In many countries, hidden unemployment reaches fifty percent! This also includes cases when a person works part-time or a week, as well as those people who have despaired of finding their place and have already lost their right to benefit because they have not registered at the labor exchange.
Hidden unemployment in Russia
At the moment, the last few decades, the economy of our country has been experiencing enormous difficulties, since the transition period has been extremely long. Hidden unemployment shows literally an extreme level of height, and this is the reason for all the negative consequences for the efficiency of production. There was a deprofessionalization of the whole country, there are very few free places due to the closure of the lion's share of production enterprises. Real wages are extremely low. All this is not in the interests of the workers themselves, but without the active participation of the government this situation cannot be changed.
Employment problems are very acute, not even workers are paid wages on time. First of all, the state policy on the labor market itself should be improved, but this does not happen. Programs tested by international experience do not function either to stimulate the growth of the number of jobs and general employment, or to prepare the workforce and improve skills.
What do we have to do
It is necessary in the near future to increase the availability of at least unemployment benefits, to increase its size. Then people would not experience such terrifying stress with contractions. We need special resources (and very substantial!) For the employment of all those who have lost their jobs. It is better for decision-makers to learn much closer communication with employment services, information should be adjusted on the needs of enterprises and the emergence of new jobs.
It is necessary to improve the existing training programs, to establish mechanisms for their implementation in order to employ as many people who were laid off to reduce people as possible, and at the same time to satisfy the need for personnel. It is necessary to develop interregional relations for the speedy movement in the labor market, and for this to happen, at least the creation of housing and management centers in the regions will be required.
Virtually no necessary conditions have been created in the social plan for employment with relocation to another region. Workers from Tajikistan and other Central Asian republics come to Moscow to earn a penny and live in basements. They are also satisfied with this option, since it is generally impossible to get a job in one’s own country.
Labor market and market economy
The type of relationship between the boss and his employee has fundamentally changed with the introduction of a market economy. New social roles have appeared, as well as related functions. For example, the employer does not at all like it was in the USSR, relates to wages and the use of personnel. The market economy dictates that employees must be involved efficiently, and wages must be distributed rationally. The connections between the amount of labor and remuneration have become different. Professional growth and mobility have also gained new meaning.
The labor market is an integral and main part of the economy along with the market of goods and securities. A profitable enterprise can attract investors to lend part of their capital for the development of production. Thus, jobs appear and earnings increase. If demand for products falls, investors retreat from the enterprise; labor potential naturally decreases.
The labor market is a multifactorial mechanism; it is formed taking into account very many social and economic conditions, but it also influences them quite strongly. This is a sector of the economy in which there is an exchange between owners of active employees and owners of means of production. The subjects on the labor market are both workers and managers: some sell their own labor, others acquire it. After the conclusion of the transaction, it becomes possible to work on consumer goods. The law of supply and demand on the labor market is the main one. Here there is only one principle regarding the first concept: the more expensive the workforce, the less profitable it is for management. And the market offer also has one principle: the higher the active force is evaluated, the more sellers it has.
The main role of the labor market
The labor market allows you to effectively use labor potential, increase interest in the development of skills of each specialist, maintain high productivity, reduce staff turnover, work with various forms of employment (part-time, one-time payments for work performed, and the like). In this direction, it is becoming more stable and multifaceted, more and more effective farming methods are being developed.
All subjects of the labor market have sovereignty, that is, independence, which gives freedom to defend their own interests, even if they are contradictory. This is how labor relations develop in the labor market. His condition is influenced by the level of the country's economy: the higher it is, the more lively the market. The features of the state, including national ones, are of great importance here: the absence or presence of sexism, racism and other remnants of the past. If the country is in recession, the labor market is functioning worse, if the rise is, it thrives.
The population market, that is, labor resources, the share of the active population in the economic plan, the number of holidays and weekends, the provision of benefits (that is, state policy), the level of education (qualification depends on it), welfare (consumer budget), the development of public institutions. The labor market may be local, but there is a global one, each has its own approach and its own capabilities.
Government policy on the labor market
The main thing in state policy regarding the exchange of labor is to take into account all the features inherent in local markets on its territory. Despite the fact that they are located within the same country, they also have common features in the sectoral structure, depending on the state of social, demographic situations, economic relations in the region. These are quite large differences regarding population density, population size, and historical development.
Scientists have not worked enough to formulate a labor market theory. Even the main economic categories are interpreted differently. The classic approach is the interaction of supply and demand, on which the functioning of the market depends. Neoclassical theory speaks of highly competitive relationships, where all subjects understand how the economy works and are able to find ways advantageous for their own interests. Rates and prices instantly adapt to the slightest changes in supply and demand.
Marxist theory defines labor as a commodity, the efforts of which create surplus value, and the rest of the capital transfers its value to each new product. Profit, therefore, appears from the exploitation of the employee. Keynes created his own theory regarding labor market volatility, fixed wages and elastic demand. There are many theories, but scientists have not yet come to a common denominator.