Like any other market resource, the labor market is subservient to the laws of supply and demand, because labor, in fact, is a commodity like any other.The only difference is that those who are sellers in the markets of the finished product, in the case of the labor force act as buyers.However, given the fact that the level of payment - one of the main factors being of the population, and hence political stability in the country, state regulation of the labor market has become an integral, in fact - the most important part of the policy of any government.In this article we will talk about the basic tools of regulation of the labor market and especially their use.
State regulation of the labor market is an important part of the government's economic policy, because it is the conditions of remuneration depends on the level of income of citizens and their purchasing power.As you know, the higher purchasing power of the population, the higher aggregate demand, which is an important driver of economic development.State policy in the labor market has two main aspects - providing citizens with a sufficient level of income as well as to guarantee the normal (non-hazardous) working conditions.The first aspect of the labor market has a direct impact, as the use of various measures to regulate the market takes it out of balance, making it more likely in a seller's market than a buyer's market.The second aspect has an indirect impact on the market, since it increases the cost of business is not labor, and on its organization.
In order to understand how the state regulation of the labor market, it is necessary to understand that, although its function and obeys the laws of supply and demand, it still has some specific features related to the fact that the line characterizing the labor supply oneperson has a slightly different view than the usual supply curve.Thus, with increasing rates of pay, first the individual is very interested and willing to work more.However, studies show that after reaching a certain level of income, the employee believes that this can stop, and a further increase in payment will cause the opposite effect - the desire to reduce the number of working hours, while maintaining the gross income at the same level.
State regulation of the labor market leads him out of balance by virtue of the following tools:
- introduction of a minimum wage - increases the market rate of pay, as people who are willing to work even for an amount less than the minimum wage will receive income,exceeding their expectations;
- payment assistance to the unemployed - in some way reduces the labor supply in the market, while also increasing its market price, because some people are willing to live on welfare and do not want to work, receive an amount slightly exceeding the amount of state aid;
- introduction of mandatory social insurance contributions - leads to the fact that many employers to reduce their costs, hire workers informally (by paying the so-called salary "in envelopes"), thereby causing the discrepancy between the official statistics and the real state of affairs.
State regulation of the labor market in Russia and other former Soviet countries at this stage has the characteristic features as a socialist-style regulation (a relic of the Soviet era), and regulation of the labor market in developed countries.
important to remember that the regulation of labor relations and its payment should be based on well-known not only theoretical knowledge, but also taking into account the political situation, the mentality of the citizens, the strategic objectives and plans of the state.
