Unemployment and its types. Unemployment
Unemployment is an indispensable attribute of a market economy. Manifesting itself through the labor market, unemployment is still not the result of the functioning of the labor market alone. Unemployment is of a general economic nature, being a consequence of the functioning of the entire economic mechanism, because the labor market is not a separate system of social and labor relations, it is organically included in the system of all market relations, and the demand and especially the supply of labor are formed due to economic and non-economic factors. The labor market and the proportions between labor supply and demand create employment, not unemployment. Unemployment is, as it were, the “wrong side” of employment; it is influenced by factors other than those that shape the employment of the population. However, unemployment is always viewed in the context of employment: an increase in employment reduces unemployment, a decrease in employment increases unemployment.
Unemployment - this is a phenomenon in the economy when part of the economically active population is unemployed.
Unemployed - this is someone who, given the current working conditions and wages, does not have a job, can work and is looking for work.
From a macroeconomic point of view, unemployment reflects the quantitative and qualitative discrepancy in the labor market between the relatively large supply of labor and the demand for it; This is always an underutilization of the labor potential of society, the total labor force as a factor of production.
Foreign economists of different schools and directions have long been trying to identify the causes of unemployment. In the West, the peak of the study of unemployment problems occurred during the Great Depression, which refuted the classical view of unemployment as a temporary phenomenon, automatically eliminated by the market equilibrium mechanism. Foreign economists have never denied the existence of unemployment in general; moreover, they believe that a certain level of unemployment is vital due to the cyclical nature of the development of a market economy and call it natural or normal unemployment.
There are different types of unemployment: frictional, structural, seasonal, cyclical. The peculiarities of the manifestation of each of them are determined by the reasons for their occurrence. Frictional unemployment caused by the natural (normal) desire of a person to look for more profitable and interesting areas of application of his labor force. This is unemployment “between jobs,” when a person has left his previous job and is looking for another (the search process is not instantaneous, but is associated with a certain waiting time). The reasons for frictional unemployment are associated with a person’s desire to improve working conditions, increase wages, avoid conflicts in the team, move to a new place of residence, or simply change jobs to maintain vitality, efficiency, and psychological balance (psychologists recommend changing jobs at least six times in a lifetime , however, this trend has national characteristics). Frictional unemployment is always short-term and voluntary in nature, in contrast to involuntary unemployment, in which a worker can and wants to work at a given level of wages, but cannot find it. However, the voluntariness of frictional unemployment is only legal, but not economic in nature. It is economic reasons (poor working conditions, low wages, pressure from the administration, etc.) that force an employee to temporarily join the ranks of the unemployed. In Russia, frictional unemployment is, as a rule, not voluntary, but forced economic in nature; is often not recorded, since the break in work lasts one to two months, which for many people is not a reason to contact the employment service.
Structural unemployment belongs to the “normal” category, as it is caused by the need for structural changes in the economy, the emergence of new industries and industries against the background of the gradual stagnation of old ones. Structural changes in the economy are long-term, which is also reflected in the duration of structural unemployment, which occurs among those people whose profession and qualifications are outdated and do not meet the requirements of new jobs. Structural unemployment also includes technological unemployment, which is caused by the improvement of the technical level of production and industries. The specificity of the Russian economy in recent years is that structural changes are very rarely associated with technological changes (with the exception of the computerization of management and banking functions, which does not require retraining, but only additional skills to the main profession). The backbone of structural Russian unemployment is made up of people not with outdated professions, but with outdated working methods and ways of thinking, despite the fact that structural changes in Russia are associated with the replacement of market-ineffective or non-market areas of activity with highly profitable and profitable ones, which requires new knowledge and new thinking. Territorial structural inconsistencies may also arise.
Cyclical or demand-deficit unemployment occurs when aggregate demand is insufficient and is caused by a decline in production and a reduction in consumer demand due to a fall in household incomes. The professions and specialties of the unemployed are not so much becoming obsolete as they simply cannot be used due to the uselessness of part of the labor force. In the Russian economy, it is difficult to draw a clear line between structural and cyclical unemployment. If in Western countries the basis of unemployment is its frictional and structural (technological) subtypes, then for Russia the main problem is cyclical unemployment with structural elements in the form of the uselessness of part of the labor force for a transition economy (and not for the economy in general).
Natural and normal unemployment for both developed countries and Russia is seasonal unemployment. It is typical for agriculture, tourism business, some trades (fur, fish, whaling, picking mushrooms, nuts, berries, medicinal herbs, etc.); caused by natural factors and is quite easily predicted in those regions where these types of economic activities predominate.
Thus, unemployment can be caused by various reasons - a decline in production in the economy (cyclical), natural factors (seasonal), structural changes in industries (structural, technological), imperfect information in the labor market (frictional).
The combination of reasons causing one or another type of unemployment forms the overall level of unemployment in the country, which may differ from the real unemployment rate in the labor market. In this regard, in practice, the concept of unemployment is specified using various criteria for its classification (Fig. 2.15).
Specification of unemployment according to the selected criteria is important when studying the problems arising from unemployment, as well as for developing a system of social protection for the unemployed and ways to minimize unemployment. A special problem for developing passive and active employment policies and reducing unemployment is the reliability of determining the number of unemployed. Today, almost all countries use the standard methodology of the International Labor Organization (ILO) to determine the number of unemployed. This methodology is based on three criteria for the unemployed state: 1) lack of work or self-employment;
Rice. 2.15.
2) willingness and ability to work at a given time; 3) taking practical steps to find a job. In Russia, determining the real level of unemployment is quite difficult, firstly, due to the ambiguity of the criteria for the unemployed state (for example, can an involuntarily part-time worker be considered unemployed and what should be the duration of the state “out of work” and “searching for work” to classify a person as unemployed); secondly, due to the registration approach to the procedure for obtaining unemployed status (a person must register with the Employment Service, undergo a check to ensure compliance with certain conditions, and persons already recognized as unemployed should not reject job offers, and the unemployment benefits they receive are reduced with increasing length of unemployment).
These factors understate the real unemployment rate. Periodic household surveys conducted by the Federal State Statistics Service since 1992 provide a more complete picture of processes in the labor market, because they are conducted in all regions of the Russian Federation, cover the entire population of the country based on a sample observation method, all areas of economic activity, all sectors of the economy and all categories of workers, including self-employment, unpaid family workers, temporary workers and part-time workers.
The Household Survey is the only data source that combines and measures employment, unemployment and economic activity. Data obtained through expert surveys of the population increase the real unemployment rate by at least three times compared to the officially registered one. Survey programs are carried out according to ILO recommendations, which ensures international comparability of statistical indicators.
The indicator "unemployment level" (UL) is calculated as the ratio of the number of unemployed (U) to the entire economically active population (L), where L = E + U, and E is the number of the employed population, i.e. UB = U/L.
The indicator “prevalence of unemployment” characterizes the total number of persons who had the status of unemployed in a certain period, regardless of whether they retained this status by the end of the period or not. The total number of persons is determined as the sum of those registered at the beginning of the period and recognized as unemployed in a given period. Statistical reporting and expert surveys make it possible to determine the prevalence of unemployment both in general and by individual socio-demographic groups (men, women, youth, rural and urban residents).
The indicator “movement of the unemployed” is characterized by a system of indicators: 1) how many new persons are registered; 2) how many persons had unemployed status at the beginning of the period; 3) how many persons were removed from the register, including those who were employed, registered for early retirement, or removed for other reasons; 4) how many unemployed people remained registered at the end of the period.
The indicator “duration of unemployment” characterizes the average duration of job search by persons with unemployed status (at the end of the period under review), as well as those unemployed who were employed during this period. When analyzing unemployment, indicators of its duration are of particular importance. The average duration of unemployment and the share of unemployed who have not worked for a long time allow us to judge the type of unemployment - frictional (fluid), cyclical (chronic).
The unemployment rate is a social indicator of economic development, and as a socio-economic phenomenon can be considered from the point of view of stock and flow. Stock is the number of unemployed (10 at a given time. Flow is a characteristic of the dynamics of the unemployed, movement in and out of the state of unemployment. Indicators of the flow of unemployed are associated with the inflow into unemployment (G) and outflow from unemployment (O). In general, there are six main flows , which characterize the state of the labor market and the unemployment rate (Fig. 2.16): from the employed to the unemployed, and vice versa, from the economically inactive to the employed, and vice versa, from the unemployed to the economically inactive, and vice versa.
Rice. 2.16.
Let's denote these flows:
- o b - the share of employees who leave the labor force;
- o h - the share of those who move from the economically inactive population to the employed;
- o с - the share of unemployed people who leave the labor force;
- o g - the share of those who move from the economically inactive population to the unemployed;
- o s - the share of those who lose their jobs and become unemployed;
- o f is the proportion of unemployed people who find work.
Thus, the unemployment rate is a function of six flows (directions of movement):
, (2.18)
where the sign above the variable indicates its direct or inverse relationship with the unemployment rate.
Unemployment indicators include the amount of unemployment benefits, which is differentiated depending on the category of citizens recognized as unemployed. The benefit is paid:
- 1) persons dismissed from enterprises for any reason (except for voluntary dismissal) and who had paid work for at least 12 calendar weeks (three months) during the last year before the start of unemployment. The amount of the benefit is determined by the following formula: during the first three months in the amount of 75% of the average earnings for the last three months at the last place of work, during the next four months - 60% of the same average earnings; in the future (five months) - 45% of average earnings. The total duration of benefit payment is 12 months of unemployment. Restrictions have been introduced on the amount of unemployment benefits - it must be no lower than 20% of the subsistence level budget (BML) for the region and not higher than the BML itself;
- 2) persons who did not have 26 calendar weeks of paid work during the year before the start of unemployment, as well as persons seeking work for the first time or wishing to resume work after a long (more than one year) break - benefits are paid at least 20% of the BPM in the region;
- 3) unemployed people studying in the areas of the employment service with the payment of scholarships during the training period in the amount of 75% of the average salary for the last three months of work; the amount of unemployment benefits for this category of persons is 20% of the BPM in the region.
The “hidden unemployment” indicator is not taken into account in the overall unemployment rate. The Federal State Statistics Service indirectly studies the scale of hidden unemployment, using enterprise reports, examining the forms of hidden unemployment - the excess number of workers; the number of people employed on a part-time basis and wishing to switch to full-time work, but who do not have such an opportunity due to the economic situation of the company; the number of persons on administrative leave without pay, on long-term leaves with the minimum wage (minimum wage); the number of people idle due to lack of material and technical resources. Thus, in Russian conditions, hidden unemployment is a situation when workers, without formally severing their employment relationship and being considered employed, do not have a job and do not receive a salary or work part-time (day, week). In international practice, this situation is called underemployment, and hidden unemployment consists of people who are not part of the economically active population at a given time, but would like to enter the labor force if the work provided to them is suitable for them.
The indicator “structure of unemployment” characterizes the unemployed by gender, age, level of education, professional status, social characteristics (workers, employees, specialists), level of income and security, and reasons for dismissal. The analysis of the structure of unemployment is carried out on the basis of a combination of statistical, operational and sociological research methods. The result of the analysis may be the development of a socio-demographic portrait of the unemployed.
The question of the socio-economic consequences of unemployment occupies a special place in the theory of unemployment. Unemployment, first of all, means underutilization of the production and human capital of society; it results in a loss of national product and national income for the country. If an economy cannot create enough jobs for everyone willing and able to work, the potential production of goods and services is lost forever. The economic costs of unemployment are manifested in non-production. The difference between the actual volume of gross national product (GNP) and the potential that could have been created, but was not produced, is usually called the backlog of GNP volume. A. Okun's law mathematically describes the relationship between the growth of unemployment and the gap between the actual GNP and the potential one. His law states: if the actual unemployment rate exceeds the natural rate by 1%, then the GNP lag is 2.5%. In this law, the fundamental point is the level of unemployment, accepted by society as natural or normal (and it, as is known, consists of structural and frictional unemployment). The natural level of unemployment is considered the maximum permissible, because it achieves a balance of factors that increase market prices and wages. As a market economy develops, the natural rate of unemployment rises. In Western countries in the 70-80s. XX century The natural rate of unemployment was 3-4%, today it is 5-6%. In Russia, this norm is difficult to determine due to the lack of stable low inflation and the presence of high hidden unemployment.
The non-economic costs of unemployment lie in the plane of social, psychological and political problems. They are associated not only with an increase in social tension in society, but also with a possible change in the country’s political course away from economic (market) reforms. The negative social consequences of unemployment are associated with a decrease in the standard of living of the unemployed, as well as the level of wages of the employed due to increased competition in the labor market; with an increase in the tax burden on the employed due to the need for social compensation and material support for the families of the unemployed; with the complete or partial loss of qualifications of persons who remain unemployed for a long time, as well as with an increase in the costs of society for its restoration; with the increase in crime, with the moral and psychological degradation of people who have been unemployed for a long time. Mass unemployment leads to an increase in suicide, mental disorders, and mortality from cardiovascular diseases. Unemployment increases the stratification of the population by income level, leads to marginalization (from the Latin marginalis - located on the edge) of certain segments of the population and social apathy (inactivity).
The main directions of state policy to promote employment of the population and protect it from unemployment are presented in Fig. 2.17.
The most promising areas for regulating employment and minimizing unemployment are active economic methods using tools to stimulate investment activity, support small businesses and self-employment, vocational training and retraining. The main tactical task is to minimize unemployment, stop its growth while simultaneously providing the unemployed with acceptable social guarantees and support.
Unemployment is a socio-economic phenomenon in which part of the labor force (economically active population) is not engaged in the production of goods and services. The unemployed, along with the employed, form the country's labor force. Employed in the economy- persons who, during the period under review:
a) performed paid work for hire, as well as income-generating work for self-employment, both with and without the involvement of hired workers;
b) were temporarily absent from work due to illness or injury, caring for the sick; annual leave or days off; learning outside the workplace; leave without pay or with pay at the initiative of the administration (lasting less than 6 months); strikes; other similar reasons;
c) worked as helpers in the family business. Persons engaged in the production of household products intended for sale (in whole or in part) are also considered employed.
Unemployed(in relation to the standards of the International Labor Organization) - persons of the age established for measuring the economic activity of the population, who during the period under review simultaneously satisfied the following criteria:
Did not have a job (gainful occupation);
We were looking for a job, i.e. contacted a government or commercial employment service, used or placed advertisements in the press, directly contacted the organization’s administration or employer, used personal connections, etc., or took steps to organize their own business;
Were ready to start work during the survey week.
Pupils, students, pensioners and disabled people are counted as unemployed if they are looking for work and are ready to start work.
To characterize unemployment, 2 main indicators are used: the unemployment rate and its duration. The unemployment rate is the ratio of the number of unemployed (officially registered) to the number of economically active population in the period under review, as a percentage. The unemployment rate is used to measure the extent of unemployment.
Duration of unemployment (duration of job search) - the period of time during which a person, being unemployed, looks for work using any means. The duration of unemployment characterizes the average time of interruption from work.
The question of what exactly is considered full employment is of important theoretical and practical importance. After all, full employment does not mean the absolute absence of unemployment. It is defined as employment that constitutes less than 100% of the labor force (or self-employed population), and the proportion of frictional and structural unemployment that exists corresponds to the appropriate level of full employment. Modern economists consider the presence of these two types of unemployment with full employment as an inevitable companion to an economy in which there is a free choice of place, time and conditions of work. Thus, full employment is achieved when cyclical unemployment is zero.
Under conditions of full employment, there is natural unemployment, which is a combination of frictional and structural unemployment. The unemployment rate at full employment is called the natural unemployment rate or natural unemployment rate. Currently, it is generally accepted that at full employment the level of natural unemployment is 5-6%.
The term “natural unemployment” was first coined by the American scientist M. Friedman. Natural unemployment implies the presence of people either preparing for employment or looking for a better job based on their qualifications. Moreover, the higher the degree of freedom to choose the place, time and conditions of work, the more stable the category of natural unemployment.
From this formula it follows that natural unemployment grows with an increase in the share of people losing their jobs, and falls with an increase in the share of those employed.
In a real economy, the actual level of unemployment, as a rule, is not equal to the level of natural unemployment, exceeding it during a recession and being lower during an economic recovery. The actual unemployment rate is subject to fluctuations, which determine the magnitude of cyclical unemployment. Thus, the level of cyclical unemployment is equal to the difference between the levels of actual and natural unemployment.
With cyclical unemployment, production capacity is not fully used and the GDP value is less than what it would be under conditions of full employment. The difference between the potential GDP at full employment and the GDP actually achieved at cyclical unemployment constitutes the GDP gap.
There is a stable direct relationship between cyclical unemployment and the GDP gap, discovered empirically by A. Okun. Okun's Law expresses the relationship between the unemployment rate and lost GDP. If the actual unemployment rate exceeds its natural rate by 1%, then the lag in GDP will be approximately 2.5%. This ratio (1:2.5) allows us to calculate the absolute losses associated with any level of unemployment.
Causes of unemployment:
Many economic schools analyze the causes of unemployment. One of the earliest explanations was given in the work of the English priest-economist T. Malthus, “An Essay on the Law of Population.” Malthus noted that unemployment is caused by demographic reasons, as a result of which the rate of population growth exceeds the rate of production growth. Disadvantage: cannot explain the occurrence of unemployment in highly developed countries with low fertility.
K. Marx studied unemployment quite thoroughly in Capital. He noted that with technological progress, the mass and cost of means of production per worker is growing. This leads to a relative lag in the demand for labor from the rate of capital accumulation, and this is the cause of unemployment. This interpretation is mathematically not entirely correct, because if the demand for labor grows, then unemployment disappears, or at least resolves, despite the fact that capital grows at an even higher rate. Marx also admitted other reasons, in particular, the cyclical development of a market economy, which makes it a constant companion to the development of a market economy. The removal of unemployment from the cyclical development of the economy has become a stable tradition in economic theory after Marx. If the economy develops cyclically, when booms and busts replace each other, the consequence of this is the release of labor and the curtailment of production, an increase in the army of the unemployed.
Keynes's merit in developing the theory of unemployment is that he presented a logical model of the mechanism that promotes economic instability and its integral component - unemployment. Keynes noted that as the national economy grows in a developed market economy, the majority of the population does not consume all of its income, but a certain part of it turns into savings. In order for them to turn into investments, it is necessary to have a certain level of so-called effective demand, consumer and investment. The fall in consumer demand dampens the interest in investing capital, and, as a result, the demand for investment falls. When investment incentives fall, production does not grow and may even curtail, which leads to unemployment.
The English economist A. Pigou, in his famous book “The Theory of Unemployment,” substantiated the thesis that imperfect competition operates in the labor market. It leads to higher labor prices. Therefore, many economists pointed out that it is more profitable for an entrepreneur to pay high wages to a qualified specialist who can increase the cost of production. Due to highly productive labor, an entrepreneur has the opportunity to reduce his workforce (the principle applies: it is better to hire one person and pay him well than to keep 5-6 people with a lower salary). In his book, Pigou detailed and comprehensively substantiated the opinion that a general reduction in money wages can stimulate employment. But still, this theory cannot provide a complete explanation of the sources of unemployment. And statistics do not confirm the position that the army of unemployed is always replenished by workers with relatively low wages.
Consequences of unemployment:
1. Production reduction
2. Increase in expenses (benefits for the unemployed)
3. lowering the skill level of the unemployed population
4. decline in living standards, increase in poverty in the country.
5. underproduction of national income
5. Decrease in tax revenues
6. Declining birth rate
7. reduction in average life expectancy.
Reading time: 7 minutes. Views 275 Published 06/10/2018
“Structural unemployment” (SI) is an economic term closely related to the decline in consumer interest in a certain product group, as well as technological progress. The growth of consumer interest in a certain product group leads to the need to increase production capacity and attract more workers to work. This factor helps reduce unemployment in this market segment. But at the same time, there is a decrease in demand for other categories of goods, which is the reason for the increase in the number of people not involved in the work process.
The group under consideration includes laid-off workers who have a high level of qualifications that do not meet the requirements of modern production. Also included in the category of structural unemployment are representatives of those professions that have low demand in the labor market. In this article, we propose to consider what structural unemployment is and talk about the reasons for its occurrence.
In assessing the state of the economy of any country, an important indicator is the employment of the working-age population
Briefly about terminology
In order to define the term “structural unemployment”, it is necessary to become familiar with the basic terminology used in the field of economics. Only a comprehensive study of the issue under consideration will allow us to draw a conclusion about the reasons for its occurrence. So, let's get acquainted with the main terms that are closely related to the concept under consideration. “Able-bodied citizens” are the entire population of a particular country of adult age.
Unemployment is an economic phenomenon in which a certain category of citizens cannot take part in the process of providing services or creating marketable products.
The term “unemployed” is used to define able-bodied citizens who are not involved in the process of providing services and creating marketable products. Based on the above, we can conclude that unemployment is expressed by a phenomenon in which citizens of a country want to participate in the work process, but for various reasons they face difficulties in finding a suitable job. It is important to note that this category does not include persons who are in poor health or who refuse to work for personal reasons.
There are four main types of unemployment:
- seasonal;
- cyclic;
- structural;
- frictional
According to experts who assess the economic state of each region, the last two concepts are of particular importance in this list. In order to develop a method for combating SR, it is necessary to carefully study the causes of its occurrence.
Causes
According to economic experts, the causes of structural unemployment are closely related to the development of a certain market segment. In addition, special attention is paid to the height of consumer demand for various product groups. The height of consumer demand is a dynamic value, which is characterized by sharp rises and rapid declines. A decrease in the interest of the target audience in a certain product group becomes the reason for the need to reduce the production capacity that is used to produce these products. In such a situation, employers are faced with the need to carry out staff reduction procedures, which contributes to an increase in the number of unemployed.
Structural unemployment is formed in cases where technological adjustments (for example, modernization) are made to the process of creating goods and services
Also, this phenomenon arises as a result of changes in a certain manufacturing industry. Technological progress is causing the population's demand for certain goods to gradually decline to zero. This factor contributes to the closure of many companies and enterprises. An example would be a product such as a black and white TV. The advent of computers, laptops, smartphones and LCD monitors made black and white TV an irrelevant and unclaimed product. All of the above has an impact on the state of the economy and the demand for representatives of certain professions.
Today, blacksmiths and glassblowers are in extremely low demand. Such professions as lamplighter and coachman have completely disappeared. They were replaced by more in-demand areas - designers, managers, PR specialists and programmers.
Difference between labor force and number of jobs
Structural unemployment is a parameter that determines the difference between the number of jobs and the number of representatives of certain professions. In simple terms, this criterion reflects the number of people who can be fired, despite having certain professional skills and a high level of qualifications. The reason for the low demand for such workers is the lack of compliance with modern requirements of the manufacturing industry.
The category under consideration unites citizens who have lost their jobs due to changes in the size of demand for certain product groups. With the development of the manufacturing industry, products produced by various factories are becoming very popular among consumers. This factor contributes to the need to increase production capacity, which requires the involvement of additional specialists in the work process. A decrease in consumer demand leads to a drop in sales.
In order to normalize the financial condition of his company, the employer needs to fire employees who are not involved in the production process. In order to determine the structural unemployment index, analysts need to determine the total number of structural unemployed and the total number of working-age citizens. SR level is a dynamic value expressed as a percentage.
A striking example of structural unemployment: a worker fired from one industry cannot find a job in his specialty or move to work in another industry
Difference between frictional and structural unemployment
Experts often draw comparisons between the concept in question and frictional unemployment. Despite the presence of several similarities, these concepts have several specific differences. The main difference is that the frictional unemployed have professional knowledge that they can use in future employment. Structural unemployed people do not have the opportunity to get a job due to the lack of skills that will be in demand in the modern labor market. In order to get a new job, such people must master new specialties and take retraining courses.
These concepts are united by the fact that representatives of each category are interested in employment. However, this process may vary in the length of time required for employment. According to experts, structural unemployment has a maximum duration, since it is almost impossible to find a job without obtaining a new specialty.
Representatives of frictional unemployment have the opportunity to find a suitable vacancy much faster. In most cases, this process lasts no more than one week. It is important to note that the phenomena under consideration are natural and inevitable.
Structural unemployment is caused primarily by constant changes in the supply and demand market. This segment is characterized by constant changes, thanks to the regular introduction of various technical innovations.
Preservation of the phenomenon
The preservation of structural unemployment is facilitated by the constant development of the economy. This process causes the demand for one industry to increase, while for others it systematically decreases to certain values. Some experts argue that the phenomenon in question turns out to be a kind of norm. Other analysts dispute this view and say the sharp increase in structural unemployment is not a positive development. A high index of this parameter reflects the fact of the presence of violations in the organization of labor activities of citizens.
This problem is due to the fact that certain specialists are no longer in demand
Examples from life
In order to understand the power of influence of this phenomenon on the lives of ordinary citizens, one should consider practical examples of structural unemployment. First, let's take a look at the impact of structural unemployment on the newspaper industry. Just a few decades ago, most advertisers used various print media to attract the interest of their target audience to their products or services. The development of progress and the Internet have made this method of promoting goods uncompetitive. Advertising on the Internet allows you to reach a wider audience, and also makes it possible to work only with a target group of consumers.
This factor caused many employees of small print publications to be laid off. It is important to ensure that not only journalists are fired, but also people who deliver printed publications to sales points. In order to get a new job, all of the above employees need to obtain a new specialty and undergo retraining courses.
Another striking example of structural unemployment against the backdrop of the formation of a market economy is people engaged in farming. The development of the trade sector allows large corporations to develop new market segments, which leads to the exit of smaller firms that become uncompetitive. The reason for going out of business is the lower cost of goods from large manufacturers. Structural unemployment forces many people to leave their hometowns and travel to large metropolitan areas where they can learn new skills and find work.
In contact with
Unemployment - This is a phenomenon organically connected with the labor market. According to the definition of the International Labor Organization, an unemployed person is anyone who is currently unemployed, is looking for work and is ready to start work. According to Russian legislation, able-bodied citizens who do not have work or income, are registered with the employment service in order to find suitable work, are looking for work and are ready to start work are recognized as unemployed. Officially unemployed are considered able-bodied citizens of working age (determined by law), permanently residing in the territory of a given state, not having a paid job, not engaged in entrepreneurial activities, not studying in full-time educational institutions or not undergoing military service and registered at the labor exchange (in state employment service).
Modern economists view unemployment as a natural and integral part of a market economy. In this regard, much attention is paid to the analysis of types of unemployment. The criterion for distinguishing types of unemployment, as a rule, is the cause of its occurrence and duration, and the main types of unemployment are considered structural, frictional and cyclical (opportunistic).
Over time, important changes occur in the structure of consumer demand, which, in turn, change the structure of overall demand for workers. New, more modern goods and services are being created in the country, requiring the introduction of advanced technologies; accordingly, a structural restructuring of production is being carried out with the reduction of old and the development of new economic facilities. In this regard, personnel are recruited and trained, and the qualifications of existing employees are upgraded, and some employees may be released.
The released personnel cannot immediately solve their problems in the labor market, and some of them end up among the unemployed. This happens because people tend to be slow to respond to the emergence of new professions, resulting in the structure of labor supply not matching the structure of jobs and the fact that some workers do not have the skills that employers need, and these citizens become unemployed. This type of unemployment is called structural. In this situation, the initiator of dismissal is the employer. An example is the widespread introduction of personal electronic equipment, computers, which replaced and freed up a large number of junior service personnel from typists, bookkeepers, clerks and some other professions.
A number of Western economists identify a special type of structural unemployment - unemployment waiting , which arises as a result of significant differences in wage levels at different enterprises. Thus, some workers, having left some enterprises, consciously expect the emergence of vacant jobs in their profession in other companies, with higher wages. If a person is given the freedom to choose the type of activity and place of work, then at any given moment some workers find themselves in a position where they have already left their previous job, but have not yet started a new one. Some of them are voluntarily changing their place of work, others are looking for work for the first time, and others have completed their seasonal work. Some people looking for a suitable job find a job, others temporarily leave their jobs, but, in general, this type of unemployment remains. In this case, the labor market functions clumsily, as if “creakingly”, trying to match the quantity and quality of workers and available jobs. This kind of unemployment is called frictional .
Since the initiative to quit in this case comes from the person himself, frictional unemployment is considered inevitable and, as some economists argue, desirable, since many workers who voluntarily remain unemployed move from low-paid, ineffective work to higher-paid and productive work, and this, in turn, means an increase in the well-being of citizens and a more rational distribution of resources for labor. Essentially, frictional unemployment is voluntary, and the resulting temporary unemployment of a citizen is not of a forced nature. In industrialized countries, frictional unemployment affects 2-3% of the economically active population. Frictional unemployment is considered inevitable, as it is caused by the natural course of life. We must keep in mind a certain difference between structural and frictional unemployment. Thus, the “frictional” unemployed have all the skills to find a job, while the “structural” unemployed need mandatory additional training or retraining. The combination of structural and frictional unemployment determines, according to most economists, the level of natural unemployment. Frictional unemployment is the result of the dynamism of the labor market, and structural unemployment arises due to a territorial or professional mismatch between supply and demand in the labor market. Thus, the level of natural unemployment is that socially minimum level, below which it is impossible to fall and which corresponds to the concept of full employment. At the same time, full employment is understood not as universal employment, but as employment that does not exclude a certain natural level of unemployment.
Changes in the situation on the market for goods and services, increased competition between commodity producers lead to the fact that some industries reduce or even stop production, while laying off some workers and giving rise to serious problems in the labor market. In an economic recession, when the aggregate demand for goods and services decreases, employment declines, and unemployment rises, a significant army of unemployed people appears, and this kind of unemployment is called opportunistic or cyclical . To smooth out the negative consequences of this type of unemployment, it is necessary to develop and adopt special programs to ensure employment, subsidized by the state. According to Western experts, during periods of economic ups and downs, the value of cyclical unemployment can fluctuate from 0 to 8-10 percent or more, thereby significantly increasing the overall unemployment rate. The absence of cyclical unemployment in a country determines the natural rate of unemployment. Employment in this case is defined as full-time. Another type of unemployment is seasonal unemployment, which is generated by the temporary nature of certain types of activities and the functioning of economic sectors. These include agricultural work, fishing, berry picking, timber rafting, hunting, partially construction and some other activities. In this case, individual citizens and even entire enterprises can work intensively for several weeks or months a year, sharply reducing their activities the rest of the time. During the period of intense work, there is a massive recruitment of personnel, and during the period of curtailment of work, there are mass layoffs. This type of unemployment corresponds to cyclical unemployment in some characteristics, and frictional unemployment in others, since it is voluntary. Seasonal unemployment can be forecast with a high degree of accuracy because it repeats itself from year to year and, accordingly, it is possible to prepare to deal with the problems caused by it. One of the types of unemployment is partial unemployment, which arises as a result of a decrease in demand for the company's products. In this case, two options for the entrepreneur’s behavior are possible: either he retains the opportunity for part of the staff to work full time and fires the other part, or without dismissal he gives everyone the opportunity to work part-time, which leads to partial unemployment.
Analysis of economic indicators makes it possible to estimate the costs of unemployment. Thus, it is believed that for every increase in real output by 2%, the unemployment rate tends to decrease by 1%, and vice versa.
Another type of unemployment is stagnant unemployment.
It characterizes that part of the population that is constantly unemployed or relies on odd jobs. This part of the people, having lost their legal source of existence, as a rule, joins the ranks of the criminal world.
Based on the need to take into account the unemployed and take appropriate government measures to provide work to everyone, they distinguish: registered unemployment, which reflects the number of unemployed citizens looking for work, ready to start work and registered with the state employment service; hidden unemployment, which includes workers employed in production, but in reality being “superfluous”. They, as a rule, either work part-time or a week through no fault of their own, or are sent on administrative leave. There is also the so-called survey unemployment - an estimated value characterizing the real situation in the labor market based on periodic special surveys of the working population.
In accordance with the methodology of the Federal Employment Service of Russia, prepared taking into account international standards, the unemployment rate is defined as the ratio of the unemployed officially registered in the state employment service to the economically active population, expressed as a percentage. The number is determined by the employment service for a certain period (month, quarter, half-year and year), the denominator is an indicator presented by the bodies of the State Committee on Statistics of Russia on the basis of a household survey conducted since 1992 on employment problems.
Causes of unemployment
Economic causes of unemployment include:
A). The high price of labor (wages) demanded by its seller or trade union.
The behavior of the buyer (employer) in the labor market is determined in these conditions by the correlation of the costs of purchasing labor and the income that he will receive from its use for a certain period of time with the costs that he will incur to purchase a machine that replaces labor and that result , which this car will bring him. If such a comparison is in favor of the machine, then the entrepreneur will refuse to purchase labor power and give preference to the machine. A person's labor power will be unsold, and he himself will find himself unemployed. Scientific and technological progress and an increase in the technical structure of production are one of the reasons for the increase in unemployment in modern conditions.
b). Low price of labor (wages), which is set by the buyer (employer)
In this case, the seller (hired worker) refuses to sell his labor for next to nothing and is looking for another buyer. For a certain time, he may remain unemployed and be classified as unemployed.
V). Lack of cost and, accordingly, the price of labor.
There are always people in society who cannot be involved in the production process due to their lack of labor as such or the presence of labor of such low quality that the buyer (employer) does not want to purchase it. These are tramps, declassed elements, disabled people, etc. This category of citizens, as a rule, forever loses their job and hope of finding it and falls into the category of stagnant unemployed.
Thus, the main cause of unemployment is imbalance in the labor market. This imbalance is especially intensified during periods of economic downturns, wars, natural disasters, etc.
Unemployment is an integral part of a market economy. The labor reserve within the natural norm is one of the factors of its effective functioning.
Consequences of unemployment
Unemployment has serious economic and social costs. One of the main negative consequences of unemployment is the non-working state of able-bodied citizens and, accordingly, the output of products. If the economy is unable to meet the job needs of everyone who is willing and able to work, who is looking for work and ready to start work, who is willing and able to work, who is looking for work and ready to start work, then the potential for the production of goods and services. Consequently, unemployment prevents society from developing and moving forward based on its potential. Ultimately, this is seen as a decrease in the rate of economic growth and a lag in the increase in the gross national product. The underutilization of society's production capabilities is predictable. Thus, some economists believe that an excess of 1 percent in employment leads to a lag of the real volume of gross national product by 2.5 percent from potential GNP. In addition to purely economic costs, one cannot discount the significant social and moral consequences of unemployment, its negative impact on social values and the vital interests of citizens. Unemployment, no matter what level it is measured, is always a tragedy for those who do not have a job and cannot obtain a legal source of livelihood. Moreover, its consequences go far beyond material wealth. Prolonged inactivity leads to loss of qualifications, which ultimately kills the hope of finding a job in the specialty. The loss of a source of livelihood and a miserable existence lead to a decline in moral principles, loss of self-esteem, family breakdown, etc. Researchers are finding a direct link between increases in suicide, homicide, mental illness, mortality from cardiovascular disease and high unemployment. Finally, history convincingly shows that mass unemployment leads to rapid, sometimes very violent, social and political change. That is why the state should not rely on the self-regulating role of the market in employment matters, but should actively intervene in this process.
Lack of jobs is an inevitable phenomenon in the world of work. As long as the law of demand and , the redistribution of labor will never be uniform. But the lack of work is not always negative, since the reasons why a citizen receives unoccupied status in the activities of organizations may differ.
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Features of this phenomenon
In the field of macroeconomics, employment is a significant index. Employment means the number of working-age population provided with jobs.
However, not everyone can work, even if they have a strong desire.
A situation in which a certain percentage of the working population does not participate in the provision of services and production, and is in search of vacancies, is called unemployment.
This phenomenon becomes especially widespread during the economic crisis, which is right now the world is experiencing. It is necessary to consider the types of unemployment and give their characteristics in order to reveal the essence of the concept.
Unemployment is divided into types according to various characteristics and criteria. Depending on the current situation, it is customary to distinguish into two types:
- hidden,
- open.
Hidden is considered implicit, that is, the person is not included in ranks of the official unemployed the following reasons:
- he is officially employed, but the employer has sent him on long unpaid leave;
- An employee does not voluntarily work part-time or a week due to the fact that he cannot find a job.
Open unemployment is a classic example when an employee has lost his job and is looking for work.
Most people who think about being unemployed think about being open.
Each person is able to independently search for a job, using the information provided by recruitment agencies, job sites and friends.
Time indicators
Types of unemployment and examples of its classification vary in duration. The time period during which a citizen is looking for work can be divided into three types:
- Short-term (the search for vacancies lasts up to 8 months).
- Long-term (job search lasts from 8 to 18 months).
- Stagnant (over 18 months).
The longer a specialist does not work, the more likely he is to lose his qualifications, since over time he forgets the nuances of the profession and stops following innovations. If this concerns an office worker, then for him it is less critical and can be easily restored. A worker who interacts with production equipment is more susceptible to skill loss.
Peculiarities
In macroeconomics it is accepted the following classification of types of unemployment:
- seasonal,
- frictional,
- structural,
- cyclical.
We will consider further what the characteristics of different types are manifested.
Impact of the season on employment
Seasonal unemployment is typical for certain professions and areas of employment, depending on the weather and changing seasons.
This type includes people employed in the tourism sector. It is a well-known fact that entire cities located in the resort area fully provide their population with work only in certain time periods.
Settlements that provide tourists with access to the sea in the summer are engaged in maintenance until the cold weather begins.
Ski resorts can operate and provide jobs to the population only during the winter season.
While the tourist season lasts, the working population sells their services and goods at inflated prices in order to create a cash reserve that will help them live peacefully until the onset of the next season.
Present in such areas of activity, How:
- Agriculture,
- shipping,
- utility (heating);
- fishing;
- construction.
Of course, there are some caveats to these types of labor. Thus, construction has seasonal characteristics mainly during the construction of country houses and cottages. The construction of a multi-storey residential building will not be stopped due to the onset of winter cold. Shipping mainly concerns river transport, since most seas do not freeze, let alone oceans.
Employers for the most part do not want to pay for forced downtime, so workers have to quit, relying on cash reserves or the government.
Or employers send employees on unpaid leave before the start of the season.
Seasonal unemployment is inevitable will have a negative impact on the economic situation in the country, since, in addition to the unemployment of the population, during this period most industries do not generate profit.
Economists advise developing other areas; of course, this is not always possible. For example, some European winter resorts successfully use ski slopes in the summer, attracting cycling enthusiasts.
Is there any benefit from being unemployed?
Frictional unemployment is regarded as beneficial for the macroeconomy as a whole, since it results in increased income and a high density of highly qualified specialists. It caused natural fluctuations in the labor market.
Examples frictional unemployment:
- the employee wants to find another job because he has lost his previous one or dreams of more comfortable working conditions and wages;
- after completing training, the new specialist wants to find a job;
- the employee for some reason changes his place of residence;
- a person previously unemployed wishes to join the workforce;
- The employee decided to change his profession and place of work.
Important! With the short-term option, finding a job takes several months.
Structural unemployment appears due to changes in technological processes or territorial changes in activity. This means that outdated equipment is being replaced with more advanced equipment, which is cause of structural unemployment. The specialist who worked on the previous equipment has not yet had time to obtain a new qualification or change his place of work.
Examples include the phenomena occurring at automotive industrial giants.
When management completely changes the line of cars produced, removing old bulky Soviet-era equipment and replacing it with a modern imported assembly line.
At the same time, the plant no longer needs many specialists, and they lose their jobs.
Another example is a drop in labor demand in a particular region. This phenomenon is especially characteristic of cities that were built around one enterprise.
If production declines and closes, the region's supply of labor greatly exceeds demand. Suffice it to recall the famous Detroit, which actually turned into a ghost town after the city-forming plant closed. In such cases, the working population changes their place of residence.
Important! It is unrealistic to completely reduce this phenomenon to zero, since this is a natural consequence of the development of processes in the labor market.
What is the naturalness of a phenomenon
It is impossible to remove frictional and structural varieties from the list, so economists include them in the natural level. They are considered useful and irremovable because they have a stimulating effect on creating equilibrium in the economy.
The natural rate of unemployment is the level that provides employment to the working population. It is calculated as the sum of frictional and structural unemployment and is believed to have a stabilizing effect on inflation markers. At its natural rate, inflation is not prone to growth, which speaks positively about the economic situation as a whole. People who want to find a job invariably achieve success in their endeavor. Yes, it takes some time.
The Harm of Unemployment
Cyclical unemployment is one of the most negative types inherent in the labor market. It appears during an economic crisis and is not natural.
In this case, what is called a fall in demand for manufactured products occurs at a rigid wage level.
In other words, if enterprises produce fewer products, then they Less labor required. However, they do not reduce the wage threshold, which could reduce labor costs.
Examples here could be massive layoffs at industrial enterprises, which reduce the volume of output, as their production activities become unprofitable. At the same time, the mass of the working-age population who wants to work cannot get a job due to their excessive numbers and the small supply of vacancies.
The forced nature of stagnation
The above examples remind us that in addition to the natural one, there must be a forced level of unemployment.
In economics, it is called the stagnant level, since the nature of the phenomenon is closely related to the long period of job search.
But in addition to its temporary characteristics, the stagnant level is distinguished by forced ways of occurrence.
People who lose their jobs for reasons beyond their control are literally forcibly thrown out of the labor market.
Of course, this phenomenon cannot have a positive effect on the economic situation, therefore the cyclical and seasonal levels belong to the stagnant level. For clarity, a simple table will serve.
We study labor law - what kind of unemployment there is
Unemployment - types, types, ways to overcome
Conclusion
Having examined the causes and types of unemployment, we can draw the final conclusion that the state and employers need to take measures to combat this phenomenon in cases where this is possible. The organization of new jobs, reasonable planning for the development of the economy of an enterprise or municipality are quite capable of improving the situation of the population.
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