Labor market. Employment and Unemployment

Unemployment in the country can be compared with the staff turnover in the company - they have a lot in common. Raising these figures above normal is a formidable sign that not everything is in order in the Danish kingdom. The reasons for the increase can be very different, you need to deal with them. And the most important thing is that you cannot get rid of either one or the other. High unemployment, as well as high turnover, must be fought for months, quarters and years. And follow them all my life, because the problems of employment and unemployment are eternal …

First, we will deal with the wording of the main concepts. This is important because the labor market, employment and unemployment are hot and “hot topics”, they touch upon issues of economics, politics, management, new technologies, etc. And where there are many participants with their opinions, the 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 do not have earnings.
The labor market is the interaction of labor supply and demand.
Labor is people willing to work for hire.

All this is enough to move on.

Employment classification

Depending on the level of participation of the working population, 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 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 - a variant of free employment, in which the "right" people work in the "right" places, in other words, this is a high compliance of the employee with their jobs. In this case, employment and unemployment are close to the ideal balance in the labor market.
Effective employment - maximum effect at minimum cost. This refers to the use of labor resources, leading to maximum material effect at low social costs.

Forms of employment, rear view

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

By ownership of the means of production:

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

In the place where the work is performed:

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

Regularity of work:

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 - work for a certain period, business trips.
Seasonal employment - work during a certain season.
Occasional employment - short work without a contract.

According to the legality of the device to work:

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

The form of employment is still basic and additional, with a rigid or flexible work schedule.

"Fearless" types of unemployment

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

The wording is one thing, understanding the essence of this complex and multifaceted phenomenon is another. First you need to decide who exactly needs to 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, unemployed are all those who have been unemployed for one week + job seekers / waiting for results / sick during this week. In Japan, the unemployed are all those who have not worked a single hour for one week. In the Russian Federation, all able-bodied people who do not have work and income, are looking for work, are ready to start it, and are registered with the employment service, are unemployed.

Unemployment refers to negative social phenomena. But there are positive aspects in it, 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 relate specifically to phenomena without a negative value:

Frictional unemployment is a fixation of the time spent searching for a job. Usually this period 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 with this ideal condition, frictional unemployment will 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 a lot of reasons and options for short periods without work between formalized places of work. Frictional unemployment can be called "voluntary work interruptions." This is the most harmless and to some extent even desirable type of unemployment, everyone would have such unemployment …

Structural unemployment occurs when demand for a particular labor changes. Such situations can occur as a result of scientific and technological progress or the emergence of new technologies, production improvement. An example is the historical “uselessness” of lifters. Structural 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 fixed among people who simply do not want to work.

Natural unemployment with components

Structural unemployment is often considered in the same package with frictional one: laid-off employees within the framework 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 on the labor market. People will always move from one place of work to another, and entrepreneurs will always optimize processes. In other words, the labor market is constantly in dynamic equilibrium - supply and demand are in a state of fluctuation.

Natural unemployment always accompanies full employment, it inevitably arises as a result of staff turnover, technological changes in industries, migration processes, etc. This also includes frictional and structural unemployment. This type of unemployment is in no way associated with economic growth or crisis and arises only with a normal balance of labor in the market. And balance is a situation where the number of those who are looking for work is equal to the number of free vacancies in the work market.

Now you can clarify the concept of full employment:

Full employment and unemployment are not at all mutually exclusive things. Full employment does not mean complete unemployment - this does not happen in nature. Full employment is accompanied by minimal levels of natural unemployment. Employment and unemployment always go side by side; this is an inseparable social and statistical couple.

Start to worry

Seasonal employment and unemployment arise with the seasonal nature of work in some sectors of the economy (agricultural, tourism, construction, etc.).
Regional unemployment occurs in places where significant social changes occur - either the closure of the 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 groups of the population (people with disabilities, youth, women).
Institutional unemployment arises due to 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 actual unemployed in the economically active population or in the labor force. 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 for long, years cannot find work.
The level of employment and unemployment in the countries of the twenty significantly exceeds Russian indicators. Spain has been and is Spain's long-term champion of unemployment with its level of 26%. On average, the EU unemployment rate 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, there it reaches 7.6%, which is considered the merit of Barack Obama.

There are no norms in employment and unemployment: countries, traditions, counting systems, and so on, are too different. It is better to compare over the years in dynamics, and not across countries. I must say 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. This article does not intend to list all of these indicators. It is much more important to deal with the essence and concepts of employment and unemployment.

Causes of unemployment

Overpriced (wages) labor. Most often it is demanded by sellers of labor - potential workers. In these requirements, unions join sellers.
The lower cost of labor, which is required and set by buyers (employers). The opportunity for an employer’s price dictation depends on the characteristics of the labor market - for example, in regions with an excess of labor, its buyers try to minimize the proposed wage. If sellers (workers) refuse to sell their labor at a low price, they become unemployed.
The lack of labor prices is observed when a category of citizens appears, for whose work no one wants to pay. These are tramps, people with disabilities, drug users, former prisoners and others. This category constitutes a group of stagnant unemployed.

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

Consequences of unemployment

They are extremely serious. First, the economic consequences:

The decline in the standard of living of the unemployed themselves - they are left without a livelihood.
Decrease in the level of wages of workers, since in the course of competition in the labor market the price of labor decreases.
Decrease in volumes of goods and services due to under-release and under-utilization of opportunities.
Raising taxes on the employed part of the population to support the unemployed in the form of benefits and compensations.

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

Tension in society.
The increase in crime due to offenses by the non-working part of the population.
The increase in the number of cases of deviant behavior among the unemployed - up to alcoholism and suicide.
Behavioral deformation of the personality of unemployed people, the breakdown of their social ties, loss of skills, family breakdowns.

Unemployment and employment in Russia

There is no need to prove the direct connection of economic crises with rising unemployment and declining employment. The Russian labor landscape is no exception. The crisis of 2014 began to appear 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 at all for the worse. There are explanations for this. The fact is that country statistics are generated through the analysis of sample data. Data is not collected in Crimea.

Keep worrying

In December 2017, the Ministry of Economic Development reported on the historical minimum 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’s too early to rejoice and draw conclusions. Statistics is a multifaceted and ambiguous science, especially if it concerns acute social issues. Accurate numbers and graphs 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 overall picture is neither 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 reduction in the number of economically active people. The population is aging, the ratio of old and young is changing, and people of working age are becoming smaller. We must not forget about hidden unemployment and citizens about whom there are no data in Rosstat.