Unemployment is the forced unemployment of the labor force arising from a constantly disturbed balance between supply and demand in the labor market. One can distinguish such modern types as voluntary (frictional), structural, cyclical, technological, seasonal, hidden, and others.
Due to various factors, the level of official unemployment does not always correspond to reality, because latent unemployment (and rural residents from overpopulated regions also belong to this category) are much larger in scale than all other types. At the same time, official statistics do not take into account among those who are unemployed those who have stopped looking for work (do not get registered on the labor exchange), as well as those who do not want to work at all (there are about 1-2 million of such people in large developed market countries) For official statistics, these people simply do not exist. All this affects a significant understatement of unemployment.
Of great importance is the calculation of the unemployment rate. This value is calculated to determine the amount of domestic product lost for the national economy in connection with it. For economists, Ouken's law expresses the lag of the actual volume of GDP from its potential value.
The American scientist A. Ouken managed to prove the existence of a correlation between the volume of the total product and the unemployment rate. This ratio is called Oaken's law. According to this law, the volume of the national product is inversely proportional to the number of unemployed people in the country. With unemployment growing by 1%, the value of real GDP decreases by at least 2%. Since natural unemployment is inevitable and permanent, only excess unemployment is taken into account to calculate the lag in the volume of the national product. This last species, by the way, is presently characteristic of more developed countries.
To assess the level of natural unemployment, it is customary to take a value equal to 6% of the total number of able-bodied people. Earlier, about 30-35 years ago, it was determined at 3%, which indicates that labor mobility has increased (this leads to an increase in voluntary unemployment) and the rate of scientific and technological progress has accelerated (this increases structural unemployment). Nowadays, the aggregate unemployment rate, as a rule, exceeds the natural level, which, according to Oaken's law, leads to the loss of part of the GDP of market countries.
At the same time, Ouken’s law also demonstrates an inverse relationship. Its essence is that, subject to an annual increase in the national product of at least 2.7%, the number of unemployed people will be unchanged and will not exceed the natural value. Thus, if macroeconomic parameters fail to overcome the three percent barrier, unemployment in the country grows.
It is worth noting that Ouken’s law is not a strict rule, which is certainly followed in all circumstances. Rather, it is a trend that has its own limitations for each country and time period.
The increase in unemployment has the following negative consequences: there is underutilization, the depreciation of the country's labor potential, the quality of life is deteriorating, pressure on wages is increasing, society's expenses for changing career guidance or restoring professional status are growing, and the number of offenses is growing.
The main factors affecting the unemployment rate are the following:
- organizational and economic - the state of the labor market infrastructure, a change in the organizational and legal forms of organizations and enterprises, privatization, structural changes in the economy;
- economic - the level of inflation and prices, the rate of accumulation, the state in which the investment activity is located, the financial and credit system and national production;
- technical and economic - the rate of scientific and technical progress, the ratio of supply and demand in different areas of the labor market, structural changes in the economy;
- demographic - an indicator of fertility, mortality, age and gender structure of the population, life expectancy, directions and volumes of migration flows.
