The emergence of serious socio-economic consequences of unemployment has led to the need for government intervention in the world of work. Due to this, it became possible to modify labor relations, regulate them and limit the freedom of market forces. As an element, a powerful state legal regulation of the labor market was created, with the help of which labor relations are regulated (the length of the working day, the procedure for hiring and dismissing, providing days off, etc.) at the international and national levels.
State regulation of the labor market is carried out in two forms - active (increasing employment, creating new jobs, as well as overcoming unemployment through retraining and training of workers) and passive (payment of benefits to the unemployed).
State regulation of the labor market sets the following goals:
· Ensuring full employment, which will eliminate the development of cyclical unemployment without violating the so-called habitual unemployment rate, which is determined by the size of its structural and frictional forms.
· Creating a labor market that can adapt to various external and internal changes in the development of the economy.
If we talk about the main direction, then recently, state regulation of the labor market has been doing everything to achieve full employment. To this end, measures are taken such as organizing retraining and retraining of the unemployed, stimulating investment in the economy, developing employment services, promoting the development of small and family entrepreneurship, organizing public works, international cooperation to solve employment problems, and addressing issues related to international labor migration .
State regulation of the labor market also applies to the support of those who are unemployed. Such social protection is a passive form of state policy. For those who for one reason or another cannot find a job, the state guarantees free medical care, as well as the provision of social support in the form of material assistance, unemployment benefits and some other payments.
How necessary is state, especially legal regulation of the labor market? Understand this by analyzing the pros and cons of such a public policy. State regulation of the labor market leads to the fact that the conclusion of labor agreements is not in free form, but in accordance with the law. Until recently, the employer, in the event that a formal labor agreement was not drawn up , could at his discretion set the size of wages and working conditions. Thanks to regulation, such an act is limited by the law on working conditions and minimum wages. Of course, this circumstance is a plus of state regulation. However, on the other hand, proponents of such regulation believe that this law leads to an increase in costs for employers, as a result the latter cannot act flexibly. This provokes an increase in unemployment, which is especially high in certain areas of activity. The reason for this is that the established high level of wages and working conditions suit only the workers themselves, while remaining disadvantageous to organizations and firms. As a result, the latter will avoid hiring those people who do not have a good track record. Their conclusion follows: people who have not worked for a long time or do not have the necessary qualifications remain unemployed. Thus, state regulation of the labor market should not be considered only on the positive side.