State regulation of the labor market

Like the market of any other resource, the labor market is subject to the laws of supply and demand, because labor, in fact, is the same commodity as any other. The only difference is that those who are sellers in the finished product markets act as buyers in the case of labor. However, taking into account the fact that the level of payment is one of the main factors of the well-being of the population and, hence, political stability in the country, the state regulation of the labor market becomes an integral, and moreover - an important part of the policy of any government. In this article, we will talk about the main tools for regulating the labor market and the specifics of their use.

State regulation of the labor market is an important component of the state economic policy, since it is the terms of payment that determine the level of income of citizens and their purchasing power. And, as is known, the higher the purchasing power of the population, the higher the aggregate demand, which is an important stimulator of the country's economic development. State policy in the labor market has two main aspects: providing citizens with sufficient income, and guaranteeing normal (not harmful) working conditions. The first aspect has a direct impact on the labor market, because the application of various measures to regulate the market takes it out of balance, turning it into a seller's market rather than a buyer's market. The second aspect has an indirect impact on the market, as it increases the costs of entrepreneurs not for labor, but for its organization.

In order to understand how state regulation of the labor market works, it is necessary to understand that although its functioning is subject to the laws of supply and demand, it still has some specific features related to the fact that the line characterizing the labor supply by one person has several Another form than the usual supply curve. So, with an increase in the wage rate, the individual first shows great interest and wants to work more. However, studies show that, having reached a certain level of income, the employee believes that this can be stopped, and further increase in payment will directly have the opposite effect - the desire to reduce the number of working hours, while retaining the gross income at the same level.

State regulation of the labor market removes it from the state of equilibrium due to the following instruments:

1. The introduction of a minimum wage increases the market rate of pay, since people who agree to work even for less than the minimum wage will receive an income that exceeds their expectations;
2. Payment of assistance to the unemployed - in some way reduces labor supply in the market, and also raises its market price, as some people agree to live on the allowance and do not want to work, receiving amounts slightly exceeding the amount of state aid;
3. The introduction of compulsory contributions to social insurance - leads to the fact that many employers, in order to reduce their expenses, hire employees unofficially (paying the so-called "envelope" salary), thus causing a discrepancy between official statistics and the real state of affairs.

The state regulation of the labor market in Russia and other countries of the former USSR at this stage has the characteristic features of both the socialist style of regulation (a relic of the Soviet era) and the regulation of the labor market in developed countries.

It is important to remember that regulation of labor relations and its payment should be based on not only well-known theoretical knowledge, but also taking into account the political situation, the mentality of citizens, the strategic goals and plans of the state.