Labor market in Russia: features. Labor market regulation. Pages of history State exchanges as a way to reduce the level of existing unemployment

Labor, as is known, is one of the main factors of production. According to economic theory, labor is a contribution to the production process in the form of physical and mental energy expended by a person. The person himself is a kind of labor resource. In a market economy there is a special term – the labor market. It means a system of relations that are associated with the hiring and supply of labor resources. And in order to understand the features of the labor market, it is worth starting with the functions that it performs. Features of the functioning of the labor market lie in a number of such factors:

coordination of working conditions and prices between employers and employees;
providing workers with the opportunity to earn a livelihood;
incentives for employers and employees;
providing production with labor resources, as well as their distribution among industries, regions and enterprises.

The main function of market relations is self-regulation. Its elements are supply and demand, as well as competition among employers and employees. In the labor market, demand is the totality of demand for various resources of the country's labor force, regardless of price. Demand depends on the level of wages, the technical level of production, tax policy and the situation in the investment sphere. Supply in the labor market is the totality of supply of labor resources of workers at any labor prices. The supply depends on the level of wages, internal and external migration of the working-age population and the demographic situation in the country. As for competition, if it arises between workers, it helps to increase labor discipline and forces workers to constantly improve their skills. Competition between employers, in turn, is an incentive to attract new labor, increase wages and improve working conditions.

Features of the Russian labor market

Compared to other countries, the labor market in Russia has a number of distinctive features:

it is not yet fully formed;
in Russia there is a very low level of wages, which results in low labor productivity;
Russians are not highly mobile. The reasons here lie in the Russian mentality, the large territory of the country and climatic features;
due to the certain behavior of enterprises, the state of the labor market cannot be called highly effective, and the state’s attempts to maintain social stability lead to labor reservation;
Russia, according to official data, has a fairly low unemployment rate. Moreover, there is hidden unemployment, when wages at an enterprise are only one tenth of the rate, which does not allow a person to support his family and himself.

The features of the modern labor market in Russia are determined by socio-political and economic conditions. The labor market operates in conditions of a multi-structure economy that is just beginning to emerge, underdeveloped investment markets, the dominance of monopolism and an increasing imbalance in the demand and supply of labor. Modern features of the formation of the labor market lie in processes that are new to our society, in which underemployment and forced leaves have become common phenomena. With the developing labor market, trends such as the growth of secondary and shadow employment, as well as high rates of hidden and partial unemployment have emerged. Enterprises are increasingly going bankrupt, laying off workers. At the same time, employers who are afloat are increasing the requirements for the level of qualifications of existing employees and people just hired. Employment opportunities for university graduates, young people, women, pensioners and the disabled also continue to decline. The state should pay special attention to employment problems. The activities of the state apparatus, first of all, should be aimed at preventing the emergence of crisis situations and mitigating the tense situation in the labor market. In addition, the state is the main regulatory body. Features of state regulation of the labor market lie in several main areas:

assistance in starting businesses;
government subsidies for production expansion;
opening of new state enterprises;
organization of public works;
providing government orders to industry during downturns.

State regulation of the labor market is basically aimed at achieving equilibrium in the socio-economic conditions of the level of employment, mitigating the consequences of unemployment, as well as matching the professional structure with the jobs occupied in it. In countries such as Sweden, Germany and Spain, government regulation measures have a positive effect, in which the state performs the function of protecting young people by lowering the age at which one must retire.

As for neighboring countries, their labor market is not significantly different from the Russian one. For example, the peculiarities of the labor market in Ukraine are that each region of this country has its own specifics. This specificity is primarily associated with universities that train specialists, and various large and small enterprises. Due to this feature, difficulties arise in finding specialists in the region. The state of the metropolitan labor market of Ukraine, as well as regional markets, is largely determined by the migration of personnel. Over the past few years, the influx of various specialists to the country's capital has reached an unprecedented scale. Moreover, mid-level specialists come to conquer Kyiv, and workers leave for Russia and Western Europe. If we talk about the regions of Ukraine with the highest salaries, the top five will include Kyiv, Kharkov, Lvov, Donetsk and Dnepropetrovsk.

The labor market is a special area where workers trade with their own strength, knowledge and skills. Such a market is not standard in the understanding of the average person. However, it functions successfully, allowing it to meet the needs of all its participants. What is it like, the labor market, the current state and problems of which remain at the stage of resolution?

In such a market, just like in all others, its own laws apply - the law of supply and demand, and so-called prices are formed. The price here is the salary of an employee, as well as the payment that can be offered to potential employers.

The more the applicant asks for the level of possible salary, the fewer potential employers can accept it (law of demand). And the lower the salary the employer offers, the fewer employees are ready to start work (law of supply). And only at the intersection of these two conditional lines makes it possible to determine the real labor market.

The labor market and its characteristics at the present stage force us to pay attention to one important feature: the employer forces a potential employee to accept conditions that are obviously unfavorable for him, since otherwise he may be left without a job.

What is the labor market like in modern economic conditions?

The modern market represents a certain disproportion that has already taken root, lack of motivation in the professional sphere, low pay. The minimum wage in the country is very small, significantly lower (up to several dozen times) than in developed countries near and far abroad. Today there is virtually no incentive for the professional development of employees and non-working specialists. Certain development criteria can be identified:

rising unemployment)
the emergence of migrants and refugees who are subject to employment)
ineffective use of the labor potential of employees - due to a decrease in production, the need to use the existing labor potential of employees in full disappears)
significantly reduced unemployment benefits)
increase in the growth of shadow employment of the population)
Difficulty of entering some sectors: applicants with higher education are unable to access employment in certain sectors, such as the banking sector, due to monopolization, high wages and requirements)
real differences between the officially registered number of unemployed, as well as the total number of unemployed in general.

Unemployment is an unpleasant but necessary component

The modern labor market in any country determines the level of social status of the entire population. Its main component is unemployment. It is present in every country, but differs only in its level. The demand for workers can be regulated not by the level of cost of their work, but by the direct volume of production. Therefore, the labor market is directly and very closely connected with the existing economy in the country and directly depends on it.

Foreign experience should teach us that the correct and gradual development of the labor market and market relations necessarily involves the building and effective protection of certain groups of the population.

The modern labor market and its requirements for a professional have been very clearly formed, and almost all employers have the same view on this. A valuable professional is a person who can meet certain criteria: the primary thing is that the person is a good specialist in his field. It should also be mobile and universal.

Modern labor market and unemployment

Unemployment is a special situation in which a certain part of the working population cannot successfully find a job at the expected level of wages, or find a job at all. It is known that it is simply impossible to achieve equilibrium between supply and demand. Due to the discrepancy between the stated demand and the put forward supply, this situation usually leads to different levels of unemployment. Unemployment is mainly widespread in certain circles, the most vulnerable of which are:

young women,
youth,
national minorities,
persons who have left places of deprivation of liberty.

We can roughly define three main components of unemployment:

High level of existing wages. If the wage level rises above the average (for example, according to the demands of trade unions), employers reduce the level of necessary offers to fill positions. This leads to unemployment. This phenomenon can only be combated by stabilizing wage levels.
The low level of demand also causes unemployment. For example, when the level of demand for goods decreases, the level of demand for sales employees decreases.
Imperfection and inflexibility of the market. It is believed that the occurrence of unemployment is a derivative of the fact that many employers are unable to adapt to changes in sales at the right time.

To combat unemployment, efforts must be made to combat the factors causing unemployment. The most problematic ones include:

The demographic situation in a specific region where the fight against unemployment is taking place. These are the birth and death rates, migration flows (both from the region and to the region), and the level of life expectancy.
The process of transferring ownership of enterprises from state to private through the standard privatization procedure. In this case, a huge number of employees of such enterprises presumably find themselves without work.
Organizational and economic factors. This refers to the processes of changing any organizational and legal form, as well as mergers and acquisitions of various companies. In these situations, employees may be forced to change their actual place of work to other regions and vice versa. All these movements influence fluctuations affecting the labor market.
Technical factor. Taking into account the development of scientific and technological progress today, as well as its development prospects in the future, many companies (especially manufacturing) cease to need certain categories of employees, which provokes the emergence of global layoffs.

Labor market, its modern structure

The modern labor market in our country has the following structure:

Healthy competition. The modern structure necessarily provides for the presence of natural competition between employers and applicants, as well as between representatives of the same group.
Mechanism for regulating relations in the labor market at the state level.
Construction of a system of complete social protection of the working population.

The subject composition of the modern labor market is very numerous. This includes employers themselves, already hired workers, unemployed persons, and self-employed workers. All prospective members of the modern labor market, representing a group of job seekers, can be divided into categories:

"Blue Collar" This category is represented by factory workers who perform exclusively physical work.
"White Collar" This category is represented only by employees who use mental abilities and knowledge to perform the job.
"Grey Collar" This category represents regular rank and file workers.

The main components in the labor market can be determined by the totality of proposals that cover the entire labor force, as well as aggregate demand, which determines the overall need of the economy for hired labor.

Regulation of the labor market at the state level in our country

The state plays an important role in regulating the employment market. It has a great influence on some issues that affect the formation of employment, both in individual industries and on a global scale. For example, the state can influence:

level of offered wages, working conditions,
providing additional benefits to individuals or categories of employees,
level of social security.

The state can actively combat unemployment by creating additional jobs, government bodies that monitor and combat unemployment, effective programs to attract the interest of potential employers, etc. This often includes government programs that allow employers to provide additional benefits when employing unemployed people with disabilities or specialists in certain professions, as well as to carry out the process of filling vacant positions and providing the unemployed population with work.

State exchanges as a way to reduce existing unemployment

Exchanges created by the state help to actively combat the current level of unemployment in the country as a whole, as well as in its individual regions. The main focus of these organizations is that they must ensure the turnover of potential employees and provide them with employment. To achieve this goal, action plans are being developed aimed at changing the level of professional training, as well as changing the professional orientation of a potential applicant. Applicants are provided with free advanced training courses, training courses for certain specialties, etc. All this helps not only to gain additional knowledge, but also to find a job in a newly acquired profession.

Such institutions play a big role in the fight against unemployment, especially by increasing the social activity of the population, researching the labor market in the region and country for the purpose of mobility of job seekers. They help to obtain from other authorities the provision of preferential lending programs for individual entrepreneurs with employees, improved conditions of service, reduced tax rates, as well as the use of other types of incentives.

The special role of exchanges in the process of regulating market relations

Unfortunately, it should be noted that the work of the labor exchange cannot particularly influence the established labor market in the country. In our country, there is no legislative obligation for entrepreneurs and enterprises to fulfill the appointments of the exchange. The latter try to independently determine the circle of possible applicants through their own personnel departments. This allows you to make a choice in a fairly short time and make a decision on employment after communicating with a large range of possible specialists. And applicants, in turn, in order to avoid the bureaucratic costs of communicating with exchanges, show a desire to communicate directly with potential employers.

Private recruiting companies

In addition to government agencies, there are private companies that recruit personnel for a variety of enterprises. Such organizations also work for potential employers, satisfying their needs for specialists of various levels, and also help applicants for certain vacancies.

The work of such companies significantly influences the labor market. The current development trend helps to select personnel to fill a vacant position, as well as select the necessary job for the candidate. The role of such companies in regulating the labor market is very large, since they really show good indicators of employment and satisfaction of both parties. Since recruiting companies are private, their activities are entirely aimed at achieving a certain result, in this case, meeting employment needs.

Labor market regulation

Unfortunately, the established exchanges cannot fully fulfill the role of a labor market regulator. The issue of getting a job continues to be at a critical level. In an unstable economy, many institutions and organizations either stop working for a while or go bankrupt. Accordingly, all employees who worked at such enterprises remain unemployed. Naturally, not all of them can get a job with the help of exchanges; many will remain registered (especially if they are near retirement age or do not have a corresponding profession). Also, the influx of unemployed occurs at the end of the school year, since there are many universities and specialized schools, and it is not possible to provide all graduates with work, at least not immediately.

These problems have always been known, but little attention was paid to them. Only recently have they begun to pay sufficient attention to solving these problems. The position regarding the labor market has changed; vacant vacancies can now be filled after attending monthly job fairs, as well as other similar events.

Of course, it is simply impossible not to accept the role of exchanges in regulating the labor market. As already noted, exchanges are engaged in retraining, retraining, training of potential workers, and also actually help citizens find employment. In addition, it is of particular importance that exchanges collect data on the number of unemployed people already employed, determining the list of in-demand professions, which helps to compile statistics and an action plan aimed at combating unemployment.

But no matter what the exchange does, it does not solve the main problem. A person who has lost his job, coming to the stock exchange and receiving an offer to acquire a new specialty, naturally agrees. But the labor market will give preference to potential employees who are under 45 years of age and have a certain amount of work experience in the required profession. But real applicants who are looking for work through the stock exchange do not have experience in a new profession, and their age is often around the limit or higher. The same thing happens with young people, who, during the period of retraining, may lose a real opportunity to find a job due to the vacancy being filled by another specialist. That is, the issue of retraining cannot solve the problem of employment.

Since it will still be a long time until the problem is completely eliminated, effective interim solutions can be taken. Although they do not solve the problem as a whole, they will not be superfluous at all:

increase in the minimum and maximum benefits received by the unemployed)
directing efforts towards employment of the country's young population)
making efforts to actually find jobs for the unemployed population.

In today's conditions, the mobility of potential job seekers plays a huge role in stabilizing and improving the economy in the country, as well as economic processes. That is, the ability of an employee, as well as his family members, to change their place of residence from region to region if necessary. It is this feature that can lead to increased productivity and efficiency of the economy as a whole.

Solving problems in the labor market

When market relations are established, the most important sphere of the economy is always affected - employment of labor resources. With the right economic policy, the unemployment rate should not be higher than 5%, this is the ideal ratio. Today it is possible to achieve such a situation in our country. However, there are a number of factors that block the road to achieving this goal, namely:

The current labor market is not balanced. There are a large number of vacancies posted by various companies, and there are a large number of unemployed people whose skills, professional training and work experience do not allow them to take advantage of the vacancies offered.
Existing restrictions, including legal ones, reduce the real possibilities of mobility of the working population (the existing institution of registration and registration significantly ties a person to a specific location).
There is no possibility of providing affordable housing, which reduces the mobility of good specialists to other regions.
The level of labor productivity, in relation to other countries, remains at very low levels.
Monopolized economy. This successfully and for a long time allows employers to dictate their working conditions and level of payment for work, and the employee has no choice but to accept clearly unfavorable conditions.

By eliminating all existing problems, you can achieve good results in the labor market, in the economy, and in market relations. As has already become clear, market relations and the economy as a whole greatly depend on the labor market. And we can only hope that it won’t be long until the labor market will be absolutely objective and allow employers and employees to fight on equal terms to satisfy their employment needs.

Basic functions

The labor market is characterized by two main functions in which its importance is manifested:

Social function implies ensuring a decent standard of living for the population by providing workers with wages and other guarantees. We are also talking about the quality of education, which should ensure the replacement of qualified personnel.
Economic function is to provide the production and non-production spheres with a sufficient number of personnel to achieve maximum effect.

The role of the labor market

More narrowly, the essence of the labor market can be reflected in the following functions:

setting wages for labor, which occurs under the influence of the balance of supply and demand;
defining the terms and conditions under which hiring and firing are carried out to avoid discrimination;
formation of standards regarding safety and working conditions;
education and advanced training in the case when production reaches a fundamentally new level.

Supply and demand

The main categories by which the labor market can be characterized are supply and demand. Thus, the first concept implies the currently required number of workers of a certain specialty and qualifications. It is worth noting that, as with the goods market, demand begins to decline as average wages rise.

Speaking about labor supply, it must be said that this is the amount of the working-age population that is ready to start working. This indicator is also characterized by the qualifications and level of education of potential personnel. Unlike demand, labor supply will grow steadily with an increase in average wages.

Features of the labor market

Most people are accustomed to applying the concept of "market" only to the economic environment where we are talking about the buying and selling of certain goods. However, this category also applies to the workforce. Thus, the features of the labor market can be described as follows:

self-regulation of this mechanism occurs on the assumption that relationships in the economic environment are free and based on the priority of private property;
Every person has the right to independently choose the place and type of work, and no one has the right to force him to do anything (with the exception of forced labor imposed by a court verdict);
Each participant in labor relations has every right to start his own business activity, both independently and on the basis of partnership relations (and subsequently he himself becomes an employer).

Labor market in Russia

In each individual state, working relations are built according to approximately similar principles, but with their own specific aspects. Thus, the development of the labor market in Russia was influenced by various political and historical processes, which determined some of its features. Before the collapse of the USSR, this area was completely under the control of the state, which excluded such concepts as “personnel shortage” and “unemployment.” With the collapse of the Union, the economic situation sharply worsened, which led to crisis phenomena and a sharp reduction in the number of employed citizens. However, after going through a long period of rehabilitation, the labor market again began to return to its normal state, which is reflected in the balance of labor supply and demand.

An analysis of the labor market, carried out on the basis of statistical data and sociological research, indicates that at the moment the number of unemployed citizens does not exceed 5%, which is a completely acceptable indicator. However, it is an average, and therefore does not provide absolutely objective information. The fact is that unemployment in a number of regions is much more significant, which is due to natural conditions, geographical location and lack of industry.

Main problems of the domestic labor market

The labor market in Russia can be characterized by the presence of a number of significant problems. The main ones can be considered the following:

Millions of labor migrants arrive in the country every year. If we consider that their requirements for wages and working conditions are much more modest than those of state citizens, then it is quite natural that employers prefer them. This situation is mainly observed in the unskilled labor market.
Mismatch between labor supply and demand. We are talking here not only about quantitative indicators. The main problem is that employers cannot offer job applicants the desired level of remuneration. This leads to a decrease in the income of the population, as well as to a drain of qualified personnel who find suitable conditions in foreign companies.
It is quite difficult for citizens from regions with high unemployment rates to find employment in other areas. This is due to the fact that in almost all organizations, a mandatory condition for employment is the presence of local registration or temporary registration.

Legislative regulation

The main legislative act on the basis of which the labor market is regulated is the Law “On Employment of the Population of the Russian Federation”. It outlines the following points:

the procedure for recognizing citizens as unemployed and their corresponding registration;
promoting the realization of the right to work;
the main postulates of state policy regarding the functioning of the labor market;
measures to improve the employment situation;
the procedure for the activities of employment services in the regions;
defining the rights and responsibilities of all labor market participants;
the procedure for compiling and analyzing statistical reporting;
labor rights granted to special unprotected categories of citizens.

In addition to the above law, working relationships are also regulated by the Labor and Civil Codes.

Labor market structure

The modern labor market is characterized by a rather complex structure, which includes the following elements:

subjects of labor relations, which are applicants for a certain position, as well as employers directly;
market conditions, which is a combination of supply and demand, as well as working conditions, average wages, level of education and qualifications;
legislative acts that contain rules governing labor relations;
government bodies authorized to resolve issues related to employment;
alternative employment, which can be expressed in temporary or part-time work;
a system of social guarantees for the unemployed, as well as people who are unable to work due to their physical condition or due to old age;
educational and information component aimed at training and retraining of personnel reserves, as well as improving their qualifications.

Competitive labor market model

The labor market, operating on the basis of a model with pure competition, is characterized by the following features:

the number of firms operating in the industry is quite large, and therefore there is a high level of competition for labor resources;
the number of workers of certain qualifications applying for similar positions is also at a significant level;
the current market situation does not give any party to the labor relationship the opportunity to dictate terms regarding wages.

Thus, the system is independently regulated based on market conditions. An increase in the average wage provokes an increase in supply and a decrease in demand. And vice versa.

Monopoly in the labor market

In order for the labor market to be considered monopolistic, it must have a number of mandatory features, namely:

the bulk of workers of a certain specialty and qualifications are concentrated in one single organization;
workers do not have the opportunity for alternative employment (this may be caused by economic and geographical characteristics, as well as the specifics of the education received);
all rights and powers regarding setting wages belong exclusively to the hiring company (figures may vary significantly depending on the number of employees).

A similar situation is typical for small and remote settlements, where there is only one city-forming enterprise or where there is a tense situation in terms of employment. The activities of such firms should be monitored by trade unions to prevent violations of the rights of the working population.

International experience

The goal of most advanced economies of the world (American, Japanese and many others) is absolute (or full) employment, and the labor market in this case will be considered optimal. To achieve this goal, the following activities are often used:

support for developing firms, as well as strict control of large organizations in order to somehow equalize the wages that they can offer to applicants;
From the previous provision, a rule follows that obliges enterprises to be united in their remuneration policy (for example, small organizations overestimate this indicator, and large ones, on the contrary, slightly underestimate);
entrepreneurs receive some benefits and subsidies, in exchange for which they undertake to hire unqualified personnel with decent pay and working conditions;
those sectors of the economy that produce socially significant products or services receive comprehensive government support even in the event of unsatisfactory economic results.

It is worth noting that the labor market is not static, but is prone to constant changes. They can occur both under the influence of market factors and as a result of intervention by government agencies.

One of the fundamental parts of the modern economy in all countries of the world is the labor market. It is difficult to underestimate the role of this mechanism, since its meaning lies in the fact that billions of people who sell their labor receive a means of subsistence, and millions of organizations receive the personnel they need to function. This is why the labor market is needed in the first place. That is why it is necessary to know its essence, meaning and features not only for economists and owners of large companies, but for absolutely all people.

Labor market concept

The labor market is a platform where the employer and the applicant meet and enter into an employment contract. This is a kind of system of mutually beneficial relationships, social and economic, between two entities.

One party to the employment contract is the person who needs the job. The other is, as a rule, a legal or natural person who needs professional personnel or labor and who is able to employ the applicant.

As in any other market, there is a product here - this is labor. A person looking for a job acts as a seller of his knowledge, time, abilities and skills. And he wants to receive a reward for the offered goods in

Market elements

Market elements are:

applicant and employer;
supply and demand, their relationship;
laws regulating the mechanism of the market;
organization of employment services;
career guidance services, enterprises for improving the qualifications of workers;
organizations for temporary employment, home work, etc.);
a system of state financial support for citizens who have lost their jobs due to layoffs, are transferred to another place of work, or are simply unemployed.

Applicant and employer as market subjects

The following groups of able-bodied citizens are applicants on the labor market:

citizens who do not have a job and want to find a job; perhaps individuals already or people simply looking for a job on their own;
people who are working, but want to change their place of work for some reason, looking for another position;
able-bodied citizens who are on the verge of being fired.

Employers in this market can be:

various forms of enterprises and organizations (legal entities);
individual entrepreneurs (individuals).

Market functions

Why the labor market is needed is easy to understand by considering its main task and the functions arising from it. Thus, the main goal of this mechanism is to organize full employment of the population while meeting the needs for hired workers from enterprises and organizations.

The market in question achieves this through the following functions:

organizing meetings of enterprise representatives and job seekers;
ensuring healthy competition among market participants;
establishment of equilibrium wage rates.

The market is undergoing the process of agreeing and signing a contract for the purchase and sale of human labor on mutually beneficial terms. A well-functioning mechanism contributes to the most useful use of people’s labor potential, which means that at the macro level the economy is in the black. The labor market, therefore, performs a regulatory function.

Having examined in more detail the labor market, its concept and functions, we can ask the question of what contributes to its emergence in countries and what its condition is today.

Economic prerequisites for the formation of the labor market

To understand why the labor market is needed, you need to know that it is formed in any country primarily with the advent of economic prerequisites. These are:

Liberalization of all spheres of the economy. Its essence is the right to private property, to the availability of means of production and land in one’s own possession.
Recognition of a person's freedom of choice in professional and labor terms. That is, everyone can decide for themselves where and how to work, for what pay and whether to work at all. At the same time, forced labor actions are prohibited in the country, with the exception of those imposed as punishment by justice.
Freedom of entrepreneurship as a type of activity. Every person in the state, alone or with a group of people, has the right to freely open their own business.

Thus, education and the functioning of the labor market are influenced by the economy. The labor market cannot be formed outside of it.

Social prerequisites for market formation

For the formation of a labor market, in addition to economic aspects, sociological prerequisites are also necessary, which consist in the formation of inequality in income level, length of service and qualifications of work, degree of health and level of education between people. As well as differences in mental abilities and personal qualities (endurance, physical strength, charm, etc.).

This type should be balanced by government authorities with the help of federal and municipal programs to protect the population from unemployment, thanks to pension payments, subsidies for low-income families and health insurance.

Legal prerequisites for the formation of the labor market

The legal prerequisites through which the labor market and the mechanism of its functioning are formed include laws and government orders that can protect the population economically and socially, aimed at individual rights and freedoms. In the Russian Federation, for example, these were:

Constitution of the Russian Federation, Art. 7, which states that the Russian Federation is a social state whose goal is to create conditions that ensure a decent life and free development of people.
The Labor Code of the Russian Federation, which lists and explains the rules for monitoring and regulating labor relations.
The Civil Code, which defines the organizational and legal forms of business.
Federal Law No. 10321 “On employment in the Russian Federation”, Federal Law No. 207-FZ “On collective bargaining agreements”, Federal Law No. 10-FZ “On trade unions, their rights and guarantees of activity” and others.

Supply and demand in the labor market

From the definition of the labor market and the description of its subjects, it becomes clear that this mechanism is based on such economic concepts as supply and demand. Demand is the availability of open vacancies, it reflects And supply is the number of unemployed people ready to sell their labor to an employer. In whatever country it is organized and whatever the labor market is, supply and demand in the labor market always exist. They change depending on external and internal factors.

Thus, demand in the labor market depends primarily on the level of wages. Its connection under normal conditions, with ideal competition, is inversely proportional to the price of labor. Also, the level of demand is influenced by other economic facts, such as, for example, the demand for goods produced by the enterprise, the level of its technological equipment or the price of capital of the company.

The supply of labor, on the contrary, is directly proportional. That is, if wages rise, the number of people willing and able to sell their professional skills at a given cost increases.

The supply of labor, in addition to the level of wages, is influenced to varying degrees by the number of working-age population, the number of hours allocated to work per day, week, year, and the professional and qualification characteristics of the working masses.

Supply and demand in the labor market shape market conditions. It, with their different ratios, can be as follows:

with a labor shortage (the market is experiencing a shortage of labor resources);
with a labor surplus (the market is overflowing with labor supply);
balanced (supply and demand are in equilibrium).

Subjective and objective influence on the functioning of the labor market

Undoubtedly, the state is capable of regulating the functioning of the labor market. This action can be exerted at various levels of government:

federal laws (for regulation at the level of the entire country);
regional or local (to regulate local labor markets according to their specifics).

Also, public organizations, such as trade unions, can have an impact on the labor market.

But it is not only the subjective regulation of employment and unemployment that determines how the labor market will function. Supply and demand in the labor market undoubtedly also play a significant role in this process. Moreover, their influence will be independent of the will and opinions of people, since it will be based on economic laws. That is, it will be objective.

Labor market models

What might the labor market be like? The classification of markets can be as follows:

depending on the degree of competition (fully competitive market, monopsony market);
depending on national characteristics (Japanese model, US model, Swedish model).

A fully competitive labor market is a labor market that includes a large number of firms and organizations competing with each other, as well as quite a lot of workers competing with each other. With this model of the labor market, neither enterprises nor workers can dictate their own conditions.

Monopsony is a labor market that consists of a monopoly on the part of one of the labor buyers. With this model, almost all workers are employed at one enterprise, without having the opportunity to choose. Consequently, the company dictates its own rules, including setting wages. This model is typical for small settlements where one large plant or organization operates.

The labor market is characterized by a system of lifetime employment, that is, an employee works in the same place until he reaches retirement age. Moreover, his salary and social benefits directly depend on his length of service. Advanced training and career growth occur strictly according to plan. If an organization needs to make reductions, workers are not fired, but simply transferred to short working hours.

The US labor market model is based on the decentralization of legislation regarding employment and assistance to the unemployed. Each state makes its own rules. In organizations, there is strict discipline and a disloyal attitude towards employees. Career growth does not occur within the company, but by leaving for another company. The unemployment rate in America is very high compared to other countries. This is the labor market in the United States, and the causes of unemployment stem from its characteristics.

The Swedish labor market model is distinguished by the large influence of the state on the employment of the population. There is a minimum level of unemployment due to its prevention.

Specifics of the labor market

It is worth noting that the modern labor market and its characteristics differ in each state, in each region, and even in each locality. But the main distinguishing features of all markets is that the subject of purchase and sale is labor. The fact that the seller and the product cannot be separated from each other, as well as the fact that the product itself cannot be stored when it is not needed.

A specific feature of all these markets is the impossibility of setting wages below those specified by the state.

Why the labor market is needed is easy to understand by considering its concept, goals, models and prerequisites for its emergence. In general, we can say that it is the basis of a market economy. This means he is able to dictate his own laws.

The labor market is a system of competitive relations between market participants (entrepreneurs, workers and the state) regarding the hiring and use of workers in social production.

The object of purchase and sale in the labor market is the right to use labor; the subject of bargaining is a certain type of human ability and the duration of its use. It also characterizes relations in the sphere of employment regarding the exchange of functioning abilities to work for the monetary equivalent of means of subsistence, i.e. for wages.

The labor market has a number of features. The labor market includes not only the sphere of exchange (purchase and sale) of labor, but also the sphere of reproduction of labor potential (market mechanisms of education, vocational training, etc.) and the sphere of use of labor (market mechanisms of personnel management in production).

The constituent elements of the labor market are people who act as carriers of the labor force and are endowed with such human qualities as psychophysiological, social, cultural, religious, political, etc. These features have a significant impact on the interests, motivation, degree of labor activity of people and are reflected in the state of the market labor.

The fundamental difference between labor and all other types of production resources is that it is a form of human life, the realization of his life goals and interests. That is why the price of labor is not just a type of price for a resource, but the price of living standards, social prestige, and the well-being of the worker and his family.

Functions of the labor market

The functions of the labor market are determined by the role of labor in the life of society, when labor is the most important source of income and well-being. From an economic point of view, labor is the most important production resource. In accordance with this, the main functions of the labor market are identified.

The social function is to ensure a normal level of income and well-being of people, a normal level of reproduction of the productive abilities of workers.

The economic function of the labor market is the rational involvement, placement, regulation and use of labor, which makes it possible to highlight the placement and selective functions.

The allocation function is the allocation of labor based on and in accordance with demand. This function assumes that the organization and functioning of the labor market should serve the rational distribution of the workforce in individual enterprises, industries and regions. The formation of such an accommodation network is the basis for regulating the labor market at all levels of government. The more perfect the labor market system, the more effective the methods for achieving the main goals of management, the more noticeable the manifestation of the placement function. This means that the efficiency of the economy depends on how optimally the process of functioning of the labor market system occurs. This function mainly manifests itself at the regional and macro-regional levels.

The selective function is to select labor based on supply and demand, as well as on the professional and qualification characteristics of the labor force. This function is most significantly manifested at the microeconomic level.

The labor market also performs a stimulating function, promoting competition between its participants, increasing interest in highly effective work, improving skills and changing professions.

Classification of labor markets

Classification of labor markets is carried out on the basis of a variety of criteria.

According to the criterion of the spatial sphere of the labor market, one can distinguish (in relation to the federal type of state structure and the administrative division of Russia) federal, republican, regional, regional, city, district, rural labor markets, labor markets of megacities (such as Moscow, St. Petersburg, etc.) . At the level of interstate social and labor relations, one can distinguish the international labor market, labor markets of interstate regions (European, Latin American, Central Asian, CIS countries).

Based on the criterion of time parameters, promising, forecast and current labor markets are distinguished.

According to the degree of elasticity, there are flexible and rigid labor markets.

In the total population, there are two large groups: people who are able and those who are not able to work for hire.

According to the criterion of the relationship between demand and supply of labor - equilibrium (balanced), deficit (demand exceeds supply) and excess (supply exceeds demand) labor markets. These types of labor market may be related to the regional, professional, integrated labor market.

According to the stage criterion, an emerging market, a transition period market, and a mature (or developed) labor market are distinguished.

According to the criterion of social group, markets are distinguished between predominantly physical labor (workers), predominantly mental labor (employees), predominantly creative labor (intelligentsia), peasant labor, etc. Within the boundaries of these social groups, skilled labor markets are distinguished. Thus, among workers one can distinguish highly skilled, skilled, semi-skilled and unskilled groups. Segmentation of labor markets is dynamic and contradictory.

The work of a certain specialty or profession goes through various stages of the life cycle: from origin to extinction and death. At the stage of emergence and expansion of the scope of application of this profession, the demand for it grows, then decreases. The duration of each stage is determined by the life cycle of the technological process and equipment that caused the emergence of this profession.

The mechanism of functioning of the labor market

The main elements of the functioning mechanism of the labor market are the demand for labor, the supply of labor and the price of labor.

The demand for labor is determined by the needs of employers to hire a certain number of workers with the necessary qualifications to produce goods and services, taking into account aggregate demand. The demand curve for labor D/ has a negative angle: as the general level of wages rises, the demand for labor falls. This is clearly seen from the graph in Fig. 8.1, on which the horizontal axis is the quantity of labor (QL), and the vertical axis is the wage rate (W).

The market supply of labor for a certain type of labor at a given wage is the sum of the supply volumes of all workers. The total supply of labor in the economy depends on the number of workers willing to sell labor to employers. The number of such workers depends on the levels of fertility, mortality and migration of the population, the physical ability to be a productive worker, the availability of other sources of livelihood (other than wages), personal choice between work and leisure, and the opportunity cost of hired labor. Other sources of livelihood include pensions, benefits, subsidies, interest on invested capital, dividends and any other income that does not require direct work.

The supply of labor is also determined by the needs of people of working age for the normal reproduction of their abilities and maintaining a sufficient level of well-being, and therefore, like demand, it depends on the amount of wages. But the dependence here is different. The SL labor supply curve has a positive slope: as the general wage level rises, the supply of labor increases.

Individual supply of labor in a market economy occurs on the basis of a choice between leisure (time spent not related to work for pay) and work, subject to two restrictions: the number of hours in the day (which must be distributed between leisure and work) and the amount of wages.

When the latter changes, the employee’s choice is influenced by the income effect and the substitution effect.

The graph shows a supply curve, which differs in its configuration from the usual one and shows the total amount of working time that an employee agrees to work for a given wage.

Up to a certain point (Wh), an increase in wages increases the supply of labor, which reaches its maximum value at point h. After reaching the maximum level, as wages continue to rise, the supply of labor (the amount of time worked) begins to decline. The same reason, namely, an increase in wages, leads to both an increase and a decrease in labor supply.

This happens because when hired, a person chooses between work and free time. When wages increase for each hour of time worked, the employee perceives each hour of free time as lost profit (lost income). This benefit can actually be obtained by converting free time into working time by replacing free time with additional work. When wages increase, there is an incentive to sacrifice leisure in favor of a high-paying job and obtaining a higher income, which can be used to purchase additional benefits. As a result, labor supply increases. In this case, there is a substitution effect. On the graph, this effect appears when moving along the labor supply curve to point h.

The income effect is the opposite of the substitution effect and begins to appear when the employee reaches a sufficiently high level of income and material well-being. With further wage growth above the level Wh, the income effect begins to dominate, i.e. high incomes stimulate more varied and longer leisure time rather than work. At the same time, the employee has a desire not only to purchase more goods, but also to have more free time for leisure by reducing the amount of working time. Therefore, after point h, an income effect is observed when, as income increases, the supply of labor decreases. The labor supply curve takes the form of bending back towards the y-axis. The predominance of the substitution effect or the income effect at a given wage level depends both on the general economic situation and on the employee himself, who makes an independent decision in accordance with his preferences and interests.

So, the labor market is an economic environment or space in which, as a result of competition between economic agents through the mechanism of supply and demand, a certain volume of employment and wage level are established.