How Unemployment Affect Labour Market

How Unemployment Affect Labour Market

Unemployment is a socio-economic situation when part of the active, working population can not find work that they are able to perform. Unemployment is conditioned by excess of quantity of people wanting to find a job over the amount of available jobs, corresponding to the profile and qualifications of applicants for these jobs. Thus, able-bodied citizens, or job seekers registered at the labor exchange, who have no real opportunity to get a job in accordance with their education, specialization and labor skills are considered to be unemployed. Thus, the main aim of the assignment is to explain how unemployment affect labour market.

Making a response to the article about unemployment, we may say that balance in the labor market exists when the amount of the requested labour is equal to the amount of the proposed work. According to the neoclassical concept, it can be achieved by instantaneous reaction of wages on supply and demand in the labor market. Due to the flexibility of wages, market mechanism provides full and productive employment. Full employment in this case means that anyone who needs a certain amount of labor in the current price can realize this wish at the moment.

But, exploring stocks and flows of unemployment into the labour market, it becomes obvious that even in rather stable economic times, there are always can be seen large monthly flows into and out of employment. It means that there appear problems in labour market, when the level of unemployment is increased of decreased because balance is always better than sudden changes in one or another side.

To continue, as it was previously mentioned, unemployment, being a socio-economic phenomenon, has great destructive scales. It is a fact that very often we estimate only economic impact of unemployment as the number of free workers and the amount of benefits paid, while the social consequences that are difficult to stand out and which have cumulative character are not practically evaluated. However, the degree of negative impact on the unemployment situation in the country depends on the particular characteristics of the overall social situation. So, researches in this area allow more clearly define the boundaries of the problem and find ways out of the crisis, in accordance with features of social, economic and political development of the country at the present stage.

Thus, making a conclusion, it can be stated that the labor market is one of the indicators, the state of which gives an indication of the national well-being, stability and efficiency of social and economic transformation. It is a truth that mixed economy and its restructuring put forth new requirements for quality manpower, its professional qualification structure and the level of training, while everything of this greatly increases competition between workers because nobody wants to be unemployed. Moreover, it allows to make actual the tasks of clarifying the influence of factors that shape the processes in the labor market, assessing patterns, trends, and prospects for its development. To add, employment is a necessary condition for human reproduction, as it is essential for people’s living standards, costs of the society for the selection, training, retraining and advanced training of people, their employment, as well as financial support for people who have lost their jobs. Therefore, such problems as employment, unemployment, labor force competitiveness and, in general, the labour market, are relevant to the economy and they are always relevant for consideration.

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