Natural unemployment types. Types of unemployment. Inflation and its socio-economic consequences
The consequence of production is not only inflation. The decline in the level of development of all economic spheres of society cannot but affect the state of the labor market. Inflation and unemployment reach their highest levels during periods of crisis, but these phenomena cannot be equated. It is necessary to clearly see the differences between inflation and unemployment.
The first of these phenomena reduces the living standards of citizens. Unemployment physically reshapes existing ones. Society, which has spent considerable resources on training qualified personnel, is faced with their uselessness. Millions of workers are simply superfluous to production.
It is possible that time will pass and the situation will change. Companies and organizations will once again need specialists. However, their dexterity and skill will be somewhat lost, and moral breakdown after experiencing an unstable situation will also take its toll. To restore labor resources, society will need to provide its citizens with social and economic support, the level of which will directly depend on the type and duration of unemployment. This is why deep knowledge about this phenomenon is so important.
Basic concept
Unemployment is a socio-economic phenomenon when a certain part of the active population does not have the opportunity to fully realize their mental and physical abilities in the processes of production of services and goods. Unemployment of citizens also occurs in cases where the demand for labor resources exceeds their supply.
Historical facts
The efficiency of using labor has changed as human society has developed. Thus, under the primitive system, the entire working population of the tribe was involved in hunting, cooking and other vital processes. Full employment of people is also characteristic of the slave system. During this period, huge armies of slaves worked on plantations, and free citizens became colonists, warriors, or were engaged in various trades. A similar picture was observed under feudalism.
Everything changed with the emergence of private capitalism. The dominance of market relations at the industrial stage of society's development became the cause of a new economic phenomenon called unemployment. It was then that crowds of people who were not in an employment relationship appeared.
Who is considered unemployed?
The socio-economic phenomenon when the population is not involved in production processes is closely related to the labor market. According to the definition given by the ILO, an unemployed person is considered to be a person who currently does not have a place of work, but is looking for one and is ready to participate in the production process. However, not every citizen can be classified in this category.
Thus, disabled people, elderly people and children do not fit this criterion. In addition, a citizen who has a certain income, but does not want to participate in production processes, is also not considered unemployed.
The essence of the phenomenon
The concept and types of unemployment are terms that invariably accompany the market economic system. This is confirmed by the entire history of the development of capitalist society.
Thus, in the second half of the 18th century, mass protests of the working class began in England. People protested against the use of machines, because the industrial revolution gave birth to a whole army of unnecessary workers. Then the phenomenon continued to gain momentum. This led to the fact that in 1995 a record number of unemployed people were registered on our planet. It amounted to 635 million people.
The essence and types of unemployment, as well as the number of people unemployed in production, depend on the specific period in the development of the economy, which is characterized by certain indicators, such as:
Labor efficiency;
- economic growth rates;
- the degree of compliance of personnel qualifications with the existing demand for them;
- demographic situation;
- employment policy pursued by the state.
According to statistical studies, the number of people unable to find work especially increases during periods when the economic crisis is growing in the country. An example of this is the decline in production that was observed in 1857. During this period in England, unemployment in the metalworking industry was 12%. And in the prosperous year of 1853 - only 2%. A sharp increase in the unemployment rate in 1957 was also observed in the United States. For example, in New York more than 150 thousand people were “superfluous”.
The highest unemployment was recorded during the years of the so-called This was the period lasting from 1929 to 1933. Then 15% of the working population living in developed countries was left without a job. For example, in America during these years more than 10 million people received unemployment status.
This negative socio-economic phenomenon is a serious problem in modern society. Thus, an increase in the number of people unemployed in production was observed during the crises of 1973-1975, 1979-1980, and 1982-1983.
The types and levels of unemployment depend on the country in question. For example, if we take data from 1985, then in Spain 20% of the population could not find a job, and in Japan - 2.6%. In the 90s, in European countries (France, England, Germany and Italy) the unemployment rate was 10-12%, in America - from 5 to 6, in Japan - from 2.3 to 3, and in Switzerland - only 1%. Such differences arise due to the differing government policies of countries in the field of macroeconomic regulation. Part of the discrepancy in unemployment rates is due to different definitions of the term.
What causes the problem of “extra” frames?
Unemployment, causes, types, consequences of this negative phenomenon are widely studied by economists. To date, researchers have ambiguously explained the appearance of “extra” personnel. Among the available reasons are:
1. Malthusianism, or excess population.
2. Marxism, that is, the growth of the organic structure of capital.
3. High level of remuneration.
4. Keynesianism, which lies in the lack of aggregate demand.
Neoclassical concept
According to economists who adhere to this theory, the number of workers employed in the production process is directly opposite to the level of remuneration they receive for their work. In other words, employment falls as wages rise. How, then, to eliminate the problem of unemployment? Reduce wages.
Keynesian concept
Economists who adhere to this theory consistently and thoroughly prove that in a market economy, unemployment is not voluntary, but forced. In their opinion, the neoclassical concept can only be confirmed within the sectoral, that is, microeconomic level.
The founder of the theory, Keynes, argued that the volume of employment is directly related to the efficiency of demand for goods. In addition, employment is largely dependent on investment. The growth of such investments invariably affects industries producing consumer goods, which leads to an increase in demand for labor resources.
Types of unemployment
Currently, a negative socio-economic phenomenon, characteristic of all countries, is subject to a certain classification. Main types of unemployment:
- friction;
- cyclic;
- structural.
Depending on the criteria and characteristics, this phenomenon can be obvious and hidden, long-term and natural, institutional, stagnant, seasonal, official and unofficial. The table below reflects the most common types of unemployment well.
Let us consider the types of this phenomenon in more detail.
Frictional unemployment
It occurs when a person resigns of his own free will, when the specialist intends to find a new, more suitable job for him. As a rule, this phenomenon is characterized by a short period of time. A specialist quickly finds a job and is no longer part of the army of people unnecessary for production.
This type of unemployment occurs when changing place of residence, receiving a new education, or while on parental leave. A decrease in the level of this phenomenon may indicate an improvement in the provision of necessary information to job seekers. However, economists argue that frictional unemployment is inevitable. In addition, to some extent it is even desirable, because this phenomenon means that specialists will receive higher incomes, which will allow the state to more rationally distribute labor resources and achieve an increase in the volume of the national product.
Structural unemployment
This phenomenon arises due to the search for the desired vacancy by those specialists who have narrow qualifications. At its core, structural unemployment, examples of which exist in our country, is forced. It arises as a result of transformations in one or another sphere of the national economy, as well as with the development of new, high-tech areas and the reduction of outdated industries.
What are the specific features of Russian structural unemployment? Examples of this phenomenon concern those who, having a secondary specialized or higher education, cannot find a suitable vacancy for themselves. And this happens while the demand for unskilled labor increases.
The inevitability of frictional and structural types of phenomena
The types of unemployment considered and examples of their occurrence give every reason to consider their presence in society to be natural. Such phenomena are considered normal for a dynamically developing state. In other words, such types and forms of unemployment as structural and frictional are classified as natural and irremovable. At the same time, they influence the creation of a long-term stable equilibrium in the labor market. The table below indicates these types of unemployment.
Essentially, both of these phenomena can be called which inevitably exist even with full employment of the population. Moreover, this phenomenon corresponds to potential GNP.
Cyclical unemployment
This negative phenomenon arises as a result of a decline in production in a period of economic development characterized by insufficient investment in the production sector. Cyclical unemployment reaches its peak level during periods of crisis. The minimum significance of this phenomenon is observed during times of production growth. Of course, there are various types and forms of unemployment, but cyclical unemployment is the most painful for the population. It leads to a fall in an individual’s income, and, consequently, to a decrease in his well-being. In addition, the presence of cyclical unemployment in a society indicates that production capacity is not being used to its full extent. And this implies a decrease in tax revenues to the treasury.
The reasons why cyclical fluctuations in employment occur lie in the state going through certain phases of economic development. For example, in Russia, a similar phenomenon arises due to the transition of the national economy to fundamentally new market conditions.
The need to count the unemployed population
Types of unemployment and examples of their manifestations can be very different. Thus, certain forms of this phenomenon are classified based on the need to register the unemployed, which will allow the state to take appropriate measures.
In this case, the following are distinguished:
1. Registered unemployment y, reflecting the number of unemployed people looking for vacancies and registered with employment services opened by the state.
2. Hidden unemployment. The category of such labor resources includes citizens who are employed in the production sector, but are “superfluous” there. They are sent to or offered to work part-time.
Duration of the vacancy search period
Types of unemployment and examples of its manifestation vary depending on the time of existence of this phenomenon. So, such a negative phenomenon happens:
- short-term, when a person cannot find a job within 8 months;
- long-term (from 8 to 18 months);
- stagnant (over 18 months).
Long-term and stagnant types of unemployment pose a particular danger to the population. And examples of this can be taken from everyday life. A specialist who has not worked for a long time loses his professional level and ability to work intensively. In addition, often this condition becomes the cause of social degradation of the individual, which leads him to a group of drunkards or homeless people. It is possible to return such people to professional activity only through long-term individual rehabilitation work.
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 some workers who 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 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 in nature. Seasonal unemployment can be forecasted with a high degree of accuracy since it repeats itself from year to year, and therefore 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 over 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 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.
One of the most acute and negative socio-economic phenomena is unemployment. A situation in which a significant part of the working-age population is looking for, but cannot find, work is fraught with a number of serious consequences. Politically and socially, this is a great stress for society, leading to increased discontent among the people. From an economic point of view, unemployment indicates ineffective and incomplete use of labor and production resources. But despite all this, it is impossible to completely get rid of unemployment; a certain natural level will always remain.
The concept of unemployment and economically active population
(unemployment) – the presence in the country of a part of the economically active population that is willing and able to work, but cannot find work.
Economically active population- residents of the country who have an independent source of livelihood, or wish and potentially can have it.
- employed (employees, entrepreneurs);
- unemployed.
A synonym for the concept of economically active population is the term - labor force (labor power).
Unemployed- a person aged 10-72 years according to the ILO definition (in Russia aged 15-72 years according to the Rosstat methodology), who at the date of the study:
- didn't have a job;
- but looked for her;
- and was ready to start it.
Indicators of unemployment rate and duration
One of the most important indicators characterizing the phenomenon of unemployment is its level and duration.
Unemployment rate– the share of unemployed in the total economically active population of a certain age group.
where: u – unemployment rate;
U – number of unemployed;
L – number of economically active population.
An important concept is the natural level of unemployment, “natural” because even under the most favorable economic conditions there will be a small but certain percentage of the unemployed. These are people who can, but do not want to work (for example, they have profitable investments and live on interest, as rante).
Natural rate of unemployment– the level of unemployment while ensuring full employment of the labor force.
That is, this is the percentage of unemployed in a situation where everyone who wants to work can find a job. This can be achieved subject to the most rational and efficient use of labor.
Full employment of the economically active population presupposes the presence of only structural and frictional unemployment in the country. Therefore, the natural rate of unemployment can be calculated as their sum:
where: u * – natural rate of unemployment;
u friction – level of frictional unemployment;
u str. – level of structural unemployment;
U friction – the number of frictional unemployed;
U str. – number of structural unemployed;
L – size of the labor force (economically active population).
Duration of unemployment– the period during which a person is looking for and cannot find a job (that is, he is unemployed).
Frictional, structural, cyclical and other forms of unemployment
The following are the most important forms of unemployment :
1. Friction– unemployment caused by the employee’s voluntary search for a new, better place of work.
In this case, the employee deliberately quits his previous workplace and looks for another one, with working conditions that are more attractive to him.
2. Structural– unemployment caused by changes in the structure of demand for labor, resulting in a discrepancy between the requirements for applicants for available jobs and the qualifications of the unemployed.
The reasons for structural unemployment can be: the elimination of obsolete professions, changes in production technology, large-scale restructuring of the entire economic system of the state.
There are two types of structural unemployment:
- destructive- with negative consequences;
- stimulating- encouraging employees to improve their skills, retrain for more modern and in-demand professions, etc.
3. Cyclic– unemployment caused by a decline in production during the corresponding
In addition, there are other types of unemployment :
a) voluntary– caused by people’s reluctance to work, for example, when wages decrease.
b) forced(expectation unemployment) - appears when people can and agree to work at a given wage level, but they cannot find work.Voluntary unemployment is especially high during the peak or boom phase of the economy. When the economy declines, its level decreases.
c) seasonal– unemployment is typical for some sectors of the economy, where the need for labor depends on the time of year (season).The reason for involuntary unemployment, for example, may be the inflexibility of the labor market in relation to wages (the struggle of trade unions for high wages, the establishment of a minimum wage by the state). Some workers are ready to work for a small salary, but the employer simply cannot accommodate them under such conditions. Therefore, he will hire fewer workers, more qualified and at a higher salary.
For example, in the agricultural industry during sowing or harvesting.
d) technological– unemployment caused by mechanization and automation of production, as a result of which the productivity of ore increases sharply and fewer jobs with a higher level of qualification are required.
e) registered– unemployment, characterizing the unemployed economically active population officially registered in this capacity.
e) hidden– unemployment that actually exists, but is not officially recognized.
An example of hidden unemployment can be the presence of people who are formally employed, but are not actually working (during a recession, many production facilities are idle and the labor force is not fully employed). Or these could be people who want to work, but are not registered with the labor exchange.
g) marginal– unemployment of weakly protected social groups (women, youth, disabled people).
h) unstable– unemployment caused by temporary reasons.
For example, layoffs in seasonal sectors of the economy after the end of the “hot” season or people voluntarily changing their jobs.
i) institutional- unemployment provoked by the intervention of trade unions or the state in establishing the level of wages, which as a result becomes different from what could have been formed naturally.
Causes and consequences of unemployment
There are many factors that can initiate an increase in unemployment. The following main ones can be identified reasons for unemployment:
1. Structural improvements in the economy– the emergence and implementation of new technologies and equipment can lead to a reduction in jobs (machines “displace” humans).
2. Seasonal variations– temporary changes in the level of production and provision of services (and, accordingly, the number of jobs) in certain industries.
3. Cyclicality of the economy– during a recession or crisis, the need for resources, including labor, decreases.
4. Demographic changes– in particular, the growth of the working-age population can lead to the fact that the demand for jobs will grow faster than their supply, which will lead to unemployment.
5. Remuneration policy– measures by the state, trade unions or company management to increase the minimum wage may cause an increase in production costs and a decrease in the need for labor.
The situation when the working-age population cannot find work is not harmless, and there may be serious consequences of unemployment:
1. Economic consequences:
- reduction in federal budget revenues - the higher unemployment, the lower tax revenues (in particular from);
- increased costs for society - society, represented by the state, bears the burden of supporting the unemployed: payment of benefits, financing of professional retraining of the unemployed, etc.;
- decreased standard of living – people who become unemployed and their families lose personal income and their quality of life decreases;
- lost output - as a result of underutilization of the labor force, there may be a lag in actual GDP from potential.
Okun's Law Show
Okun's Law (Okun's law) - named after the American economist Arthur Melvin Okun.
It says: an excess of the unemployment rate over the level of natural unemployment by 1% causes a decrease in real GDP relative to the level of potential GDP by 2.5% (derived for the USA in the 1960s; today the numerical values may be different for other countries).
where: Y - actual GDP;
Y * - potential GDP,
u cycle. - level of cyclical unemployment;
β is the empirical sensitivity coefficient (usually assumed to be 2.5). Each economy (country), depending on the period, will have its own value of the coefficient β.
2. Non-economic consequences:
- worsening crime situation - more thefts, robberies, etc.;
- stress load on society - loss of a job, a major personal tragedy for a person, severe psychological stress;
- political and social unrest - mass unemployment can cause an acute social reaction (rallies, strikes, pogroms) and lead to violent political changes.
Galyautdinov R.R.
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Unemployment is one of the main forms of manifestation of macroeconomic instability and one of the most pressing social problems. It is closely related to the cyclical fluctuations of the economy discussed above.
Unemployment reflects a situation in the economy in which the structure of the working-age population includes unemployed are people who do not have a job, want to work and are ready to start working immediately. This definition of the unemployed was adopted by the International Labor Organization (ILO), an authoritative organization created in 1919 to regulate social and labor relations in the world (the USSR became its member in 1934, and modern Russia retained its legal succession). Thus, not every person who is not currently working can be called unemployed.
Unemployment is opposed to employment. Busy are those people who have jobs, including those who work part-time.
The employed and the unemployed together form economically active population(EAN) or workforce. Working population includes, in addition to EAN, and part economically inactive population, which includes those who have left the labor force, i.e. those able-bodied people who do not have a job and are not actively looking for it (students, housewives, as well as those who, for various reasons, have stopped looking for it). According to age parameters, the working-age population is the population of working age (in the Russian Federation for women - from 16 to 55 years, for men - from 16 to 60 years). It is necessary to distinguish from those who have left the labor force disabled population, which includes people of disabled age and special categories of the population who are kept in special institutions for a long time (places of detention for convicts, closed medical institutions, etc.).
Types of unemployment
Unemployment can exist in different forms (types). The following are distinguished: types of unemployment(the first three of them can be qualified as main ones).
- 1. Friction (fluid) unemployment associated with searching for a job, collecting information and waiting to go to work. Caused by personal motives, a person’s desire to change jobs, for example due to a change of residence. Can exist at any phase of the cycle. As a rule, it is voluntary and short-term in nature.
- 2. Structural unemployment caused by technological changes in the economy (most often the “dying” of some and the emergence and expansion of other industries and productions), the discrepancy between the demand for labor and the existing professional and regional structure of labor resources. It can be at different stages of the cycle, although it especially expands during times of crisis. It is (unlike frictional unemployment) forced and long-term in nature, since it requires retraining or moving to another region.
Frictional and structural unemployment together form natural rate of unemployment, and the form of unemployment itself is defined as natural. The term itself reflects the natural, “normal” (in contrast to the cyclical unemployment discussed below) nature of the types of unemployment included in it. It can also be defined as the unemployment rate at full employment of resources, i.e. as corresponding to the potential value of GDP.
3. Cyclic (opportunistic) unemployment is associated with cyclical fluctuations and is characteristic of periods of recession and depression: it is during these periods that unemployment increases or remains high, during the period of recovery, on the contrary, it falls, and during the recovery phase it disappears. It is by this magnitude that actual unemployment exceeds natural unemployment.
This form of unemployment is forced in nature, since the number of unemployed exceeds the employment opportunities available in the economy. The duration of this type of unemployment depends on the speed of change of phases of the cycle.
In addition to the main types of unemployment listed above, there are a number of other types:
- – hidden (latent) unemployment– it (in Russia) includes those working part-time or on forced (administrative) leave. In another interpretation, it should include the unemployed who do not register on the labor exchange, but who are independently looking for work. In some interpretations, it includes that part of the economically inactive population who was looking for, but despaired of finding, work; working, but having incomes below the subsistence level (as if working almost for free); overemployed (“unemployment at work”, i.e. the real absence of production functions of a formally employed worker);
- – persistent unemployment– it includes those unemployed who cannot find work for a long time (usually more than a year). There is a deskilling of people, aggravated by their moral and psychological depression;
- – institutional unemployment– caused by all kinds of legislative and organizational reasons that reduce the efficiency and flexibility of the labor market (in particular, this concerns the underdevelopment of its infrastructure, difficulties in finding jobs for certain categories of the population, etc.);
- – unemployment waiting– it includes those who cannot get a job due to wage rigidity (see the rigidity of prices and wages in the short term in Chapter 3), which leads to an excess of the supply of labor over the demand for labor and to the emergence of shortage of jobs;
- – seasonal unemployment– is associated with the peculiarities of production with a seasonal nature of work (primarily agriculture);
- – "fake" unemployment– includes those registered unemployed who actually do not want to work and who are satisfied with life on unemployment benefits.
In a market economy there is a tendency towards economic instability, which is expressed in its cyclical development, unemployment, and inflationary rise in prices.
Unemployment is a macroeconomic problem that has the most direct and severe impact on every individual. Losing a job for most people means a decrease in their standard of living and carries serious psychological trauma. It is therefore not surprising that the problem of unemployment is often the subject of political debate. Many politicians use the so-called “poverty index,” which is the sum of unemployment and inflation rates, to assess the state of the economy or the success of economic policies.
Unemployment means inability to find a job . Unemployment is a socio-economic phenomenon when part of the economically active population does not find work and becomes a surplus population. According to the International Labor Organization, unemployed – This is a person who wants to work, can work, but does not have a job.
To determine the number of unemployed in each country, it is necessary to divide the entire population into groups according to the degree of their labor activity. First, all individuals are divided into two groups:
1. Economically inactive population - residents of a country who are not part of the labor force. This includes:
a) pupils and students of full-time educational institutions;
b) pensioners (for old age and other reasons);
c) persons running a household (including those caring for children, the sick, etc.);
d) desperate to find a job;
e) persons who do not need to work (regardless of the source of their income).
2. Economically active population (Ea)– part of able-bodied citizens that offers labor for the production of goods and services.
Then it is determined level of economic activity of the population (Va)– share of the number of economically active people in the total population (Nn):
Ua = Ea / Chn.
In turn, the economically active population is divided into two groups:
1.Busy (E)– persons aged 16 years and older (as well as persons of younger ages) who:
a) are employed for remuneration (full-time or part-time);
b) work without pay in family enterprises.
2. Unemployed (U) – persons 16 years of age and older who:
a) do not have a job (gainful occupation);
b) are looking for work (contacted employment services, etc.);
c) ready to start work;
d) are trained in the direction of the state employment service.
Based on data on employment (3) and unemployment, the unemployment rate is determined.
Unemployment rate(Ub) – the share of the number of unemployed (U) in the economically active population (Ea):
Due to the different lengths of the period of unemployment, 3 types of unemployment are distinguished:
1) friction;
2) structural;
3) cyclical.
Frictional unemployment means short periods of unemployment necessary to find a job that matches the employee’s qualifications. These periods are voluntary.
This type of unemployment brings together people who are either unemployed due to a transition from one job to another, or have already found a job and are planning to start it soon, as well as workers in industries with a seasonal nature (agriculture, construction).
A certain period of time is required to establish a match between the structure and workforce and available jobs. The labor market equilibrium model assumes an exact correspondence between the qualities of workers and available jobs, i.e. assumes that any worker is equally suitable for any job. If this were actually the case, and the labor market were in equilibrium, then job loss would not lead to unemployment.
However, in fact, workers have different inclinations and abilities, and each specific workplace has certain professional requirements. In addition, the system for disseminating information about job applicants and vacancies is imperfect, and the geographical movement of workers cannot occur instantly. Finding a suitable workplace requires some time and effort.
A certain level of frictional unemployment is inevitable in a constantly changing market economy.
Structural unemployment. This term refers to a situation in which a worker remains unemployed for extended periods. These periods are explained by structural shifts in the economy that devalue the skill level of certain categories of the workforce.
The demand for various goods fluctuates constantly, which in turn causes the demand for the labor of the workers who produce those goods to fluctuate (for example, the introduction of personal computers reduced the demand for typewriters, which in turn reduced the demand for labor in typewriter factories). Further, since different regions produce different goods, the demand for labor may simultaneously increase in one part of the country and decrease in another. Such changes in the structure of labor demand by industry and region are called structural shifts.
Unemployment of frictional and structural types exists in both prosperous and unfavorable periods. The total number of unemployed people of both types is called natural rate of unemployment , this level corresponds to the situation of macroeconomic equilibrium.
The modern name for this indicator is the non-inflation-accelerating unemployment rate.
The natural rate of unemployment increases over time. If in the early 1960s. it accounted for 4% of the labor force, now it is 5.5 - 6.5% of the total labor force. The reason for the increase in the natural rate of unemployment is an increase in the duration of the job search, which may be due to:
An increase in unemployment benefits;
Increasing the time for payment of unemployment benefits;
An increase in the share of women in the labor force;
Increasing the share of young people in the labor market.
The first two factors provide the opportunity to search for work over a longer period of time. The third and fourth factors, which mean a change in the gender and age structure of the labor force, increase the number of people who have entered the labor market for the first time or are looking for work, and therefore the number of unemployed, increase competition in the labor market and lengthen the period of job search.
Full employment is compatible with the natural rate of unemployment. The amount of output that can be produced under full employment is expressed by production potential of the economy.
Cyclical unemployment - uh This is unemployment caused by the cyclical contraction of production. The difference between the actual value of the unemployment rate and the value of the natural rate is called cyclical unemployment.
The development of a cyclical form of unemployment leads to its actual level exceeding the natural one. The economic price of this excess is expressed in the gap between the actual volume of GNP and its potential value.
The following types of unemployment are also distinguished:
1) seasonal;
2) voluntary (unemployment caused by the fact that part of the labor force does not want to work for a wage rate that is low compared to unemployment benefits and social benefits);
3) part-time (shortened working hours);
4) marginal (unemployment of weakly protected segments of the population: youth, women, disabled people);
5) hidden unemployment (in a market economy) - the presence of people who want to work, but are not registered as unemployed. Hidden unemployment is partly represented by people who have stopped looking for work;
6) hidden unemployment (in a command economy) – the presence of excess workers with simultaneous low labor productivity;
7) economic (unemployment caused by market conditions:
curtailment of unprofitable production under the influence of the bankruptcy law; the government's reluctance to support unprofitable industries and enterprises, etc.);
8) institutional - unemployment generated by labor market institutions and factors influencing the demand and supply of labor (imperfect tax system, the introduction of a guaranteed minimum wage, inertia of the labor market, imperfect information about available jobs);
9) classical (unemployment resulting from a wage rate that is too high compared to the rate that would balance the demand for labor and its supply);
10) technological unemployment (associated with the introduction of sparsely populated and uninhabited technology based on electronic technology).
An unemployed person in the United States is a person over 16 years of age who is not working but has been actively seeking work for 4 months or expecting to return to work within 4 weeks.
The population is classified as employed, unemployed, or temporarily unemployed according to a monthly survey of 50,000 households conducted by the U.S. Bureau of Labor Statistics. People are defined as employed if they work full-time, part-time, or are absent from work due to holidays, strikes or personal reasons. Persons who are willing to work but are not actively looking for work are not counted as unemployed, but are considered temporarily unemployed.
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