Yarmolenko G. S., Rieznik M. A.

Oles Honchar Dnipropetrovsk National University, Ukraine

CAUSES of UNEMPLOYMENT and ways to solve this problem


Unemployment  is a complex socio-economic phenomenon in which some part of the economically active population are unemployed and dont have earnings.

The main reasons for the high level of unemployment are:

1) payment of unemployment benefits;

2) rigidity in wages.

Allocation and payment of unemployment benefits increase its natural level, as they make the life of the unemployed easier. Unemployment benefits enable a person to be on the look-out for a job for a longer period of time. When the amount of such aid is big enough, the person out of work wont hurry to find a job, because their life wont be very difficult in these conditions.

o receive unemployment benefits, people should belong to the labor force, i.e. they should be looking for a job, even if they do not really feel like working. Then, they are considered to be unemployed. If there was no unemployment payment, some people would not be enrolled in the labor force, and the measured level of unemployment would be lower.

Despite the fact that unemployment benefits increase the natural level of unemployment, such payments can not be scrapped. If we want human resources to be effectively redistributed in the economy, people need to be given some time to search for a job. It would be inappropriate to make a skilled worker, who just lost their job, take on a new, unskilled job only because they can not afford to be unemployed and lose time to look for employment. Thus, even in terms of economic efficiency, reducing unemployment benefits to zero is not the ideal solution.

Another factor that affects the level of unemployment is the so-called rigidity of wages, that is, its inability to flexible changes. 
A major problem is regional unemployment. Its overcoming requires conducting suitable and adequate structural policies and development of regional programs for the effective employment through further diversification of the economy, attracting and operating private sector capital, the development of infrastructure, opening of centers of labout force retraining, the formation of special funds for giving loans to private entrepreneurs. 
In the conditions of market economy the problem of the youth unemployment, which is gradually growing, is particularly acute. To solve it, its necessary to create prerequisites for the grounded, informed choice of profession and a place of work to meet the needs of the labor market, as well as taking into account abilities, vocation and physiological features of a young person and their professional training. 
The important component in preventing the youth unemployment is the implementation of specialized programs that provide expansion of employment for the young people by creating additional jobs for them without high material cost, particularly by organizing their seasonal and temporary involvement in some agricultural work, maintenance and repair of agricultural machinery, transportation and sale of the crop, providing assistance to the disabled, the elderly, work in hospitals, orphanages, residential care homes, etc. 
The active employment policy of the state involves the development of programs to promote employment. These programs may engage not only certain categories of the population, especially marginalized groups, such as young people, women, the disabled, but also specific cases of a threat of unemployment caused by economic or other situations (demographic, political causes, natural disasters, etc.). 
In developed countries, most employment programs apply to certain categories of people who need support and help. 
In conclusion, I would like to offer some solutions to the problem of employment.
Firstly, its necessary to reduce payroll taxes so that companies could recruit more people.
Secondly, its necessary to provide opportunities for a small-scale business so that the unemployed could do business or start their own company.
Thirdly, it is necessary to lower taxes to attract investment to the country. As a result, there will be jobs. In countries with low taxes the level of unemployment is very low.

List of references:

1.              . .      / . .  //   .  2004.   11 (41).  . 164170.
2.              . .       / . .  //   .  2004.   10 (40).  . 167172.