The consequence of economic downturns in production is not only inflation. A decrease 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 in times of crisis, but one cannot equate these phenomena. It is necessary to clearly see the differences that inflation and unemployment have.
The first of these phenomena reduces the standard of living of citizens. Unemployment is physically redrawing the existing workforce. A society that has spent considerable resources on training qualified personnel is faced with their uselessness. Millions of workers are simply superfluous for production.
It is possible that time will pass and the situation will change. Specialists will again be needed by companies and organizations. However, their dexterity and skill will already be somewhat lost, and besides, moral breakdown after the experienced unstable situation will affect. 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. That is why in-depth knowledge of this phenomenon is so important.
Basic concept
Unemployment is a socio-economic phenomenon when some part of the active population is not able to fully realize their mental and physical abilities in the processes of production of services and goods. The unemployment of citizens arises in those cases when the demand for labor resources exceeds their supply.
Historical facts
The efficiency of the use of labor has changed with the development of human society. Thus, under the primitive system, the entire able-bodied 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 engaged in various crafts. A similar pattern was observed under feudalism.
Everything changed after the advent of private capitalism. The dominance of market relations at the industrial stage of the development of society has led to a new economic phenomenon called unemployment. It was then that crowds of people who were not in labor relations appeared.
Who is considered unemployed?
The socio-economic phenomenon, when the population is not involved in the production processes, is closely related to the labor market. By definition, given by the ILO, the person who does not currently have a place of work, but is looking for him and is ready to participate in the production process, is considered unemployed. However, not every citizen can be assigned to this category.
So, 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 management system. This is confirmed by the entire history of the development of capitalist society.
So, from the second half of the 18th century, mass demonstrations of the working class began in England. People protested against the use of machines, because the industrial revolution gave rise to an army of unnecessary workers. Further, the phenomenon continued to gain momentum. This led to the fact that in 1995 a record number of unemployed were registered on our planet. It amounted to 635 million people.
The nature and types of unemployment, as well as the number of people unemployed in production, depend on a specific period in the development of the economy, which is characterized by certain indicators, such as:
- labor efficiency;
- economic growth rates;
- the degree to which the qualifications of personnel correspond to the existing demand for them;
- demographic situation;
- state employment policy.
According to statistical studies, the number of people who are not able to find work, especially increases during those periods when the economic crisis is growing in the country. An example of this is the decline in production, which was observed in 1857. During this period, unemployment amounted to 12% in England in the metalworking industry. And in prosperous 1853 - only 2%. A sharp increase in unemployment in 1957 was observed in the United States. For example, in New York more than 150 thousand people turned out to be "superfluous".
The highest unemployment was recorded in the years of the so-called
Great Depression. It was a period lasting from 1929 to 1933. Then without a job left from 15% of the working population living in developed countries. For example, in America over 10 million people have received unemployed status over the years.
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 also 1982-1983.
The types and level of unemployment depend on the country in question. For example, if you take the 1985 data, then in Spain 20% of the population could not find a job, and in Japan - 2.6%. In the 90s in Europe (France, England, Germany and Italy) there were 10-12% of unemployed, in America - from 5 to 6, in Japan - from 2.3 to 3, and in Switzerland - only 1%. Such differences arise due to the different state policies of countries in the field of macroeconomic regulation. Part of the discrepancies in unemployment are related to the different definition of this 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" frames. Among the available reasons are:
1. Malthusianism, or overpopulation.
2. Marxism, that is, the growth of the organic structure of capital.
3. High level of remuneration.
4. Keynesianism, concluded 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 exactly the opposite of the level of remuneration they receive for labor. In other words, employment is falling along with salary growth. 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 industry, that is, microeconomic level.
The founder of the theory, Keynes, argued that employment was directly related to the efficiency of demand for goods. In addition, employment is highly dependent on investment. The growth of such investments invariably affects the industries involved in the production of consumer goods, which leads to an increase in demand for labor resources.
Types of Unemployment
Currently, the negative socio-economic phenomenon characteristic of all countries is subject to a certain classification. The main types of unemployment:
- frictional;
- cyclic;
- structural.
Depending on the criteria and characteristics, this phenomenon can be explicit and hidden, long-term and natural, institutional, stagnant, seasonal, official and unofficial. The table below is a good reflection of the most common types of unemployment.
Consider the types of this phenomenon in more detail.
Frictional unemployment
It occurs when a person is fired of his own free will, when a specialist intends to find a new, more suitable job for him. As a rule, such a phenomenon is characterized by a short period of time. The specialist quickly finds a job and no longer belongs to the army of people unnecessary for production.
A similar type of unemployment occurs when you change your place of residence, receive a new education, or are on maternity leave. A decrease in the level of this phenomenon may indicate a better supply of the necessary information to those who are looking for work. However, economists argue that frictional unemployment is inevitable. In addition, it is to some extent even desirable, because this phenomenon means that specialists 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 necessary vacancy by those specialists who have narrow qualifications. At its core, structural unemployment, examples of which exist in our country, is compelled. It arises as a result of transformations in a particular sphere of the national economy, as well as the development of the latest, high-tech areas and the reduction of obsolete industries.
What specifics does Russian structural unemployment have? Examples of this phenomenon relate to those who, having a secondary specialized or higher education, cannot find a suitable vacancy for themselves. And this happens with a simultaneous increase in demand for unskilled labor.
Inevitability of the phenomena of frictional and structural types
The considered types of unemployment and examples of their appearance give full reason to consider their presence in society as natural. Such phenomena are considered normal for a dynamically developing state. In other words, types and forms of unemployment, such as structural and frictional, are classified as natural and unremovable. Moreover, they influence the creation of long-term sustainable equilibrium in the labor market. These types of unemployment are indicated in the table below.
In fact, both of these phenomena can be called
natural unemployment, which inevitably exists even with full employment. Moreover, this phenomenon corresponds to potential GNP.
Cyclical unemployment
Such a negative phenomenon arises as a result of the decline in production in that period of economic development, which is characterized by insufficient investment in the production sector. Cyclical unemployment reaches its peak level during periods of crisis. The minimum value of this phenomenon is observed during the rise of production. Of course, there are various types and forms of unemployment, but cyclical is the most painful for the population. It leads to a decrease in the income of the individual, and, consequently, to a decrease in his well-being. In addition, the presence in society of cyclical unemployment indicates the use of production capacities not in full. And this implies a reduction in tax revenues to the treasury.
The reasons for the cyclical fluctuations in the employment of the population lie in the state passing 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 account for the unemployed
Types of unemployment and examples of their manifestations can be very different. So, certain forms of this phenomenon are classified on the basis of the need to register unemployed, which will allow the state to take appropriate measures.
At the same time, they distinguish:
1. The registered unemployment rate y, which reflects the number of unemployed people who are looking for vacancies and registered with the state employment services.
2. Hidden unemployment. The category of such labor resources includes citizens who are employed in the production sector, but who are “superfluous” there. They are sent on social leave or offered to go on a part-time basis.
Duration of job search period
Types of unemployment and examples of its manifestations are also different in the lifetime of this phenomenon. So, a similar 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).
Of particular danger to the population are long-term and stagnant types of unemployment. And examples of this can be taken from everyday life. A long-term non-working specialist 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 individual rehabilitation work.