Научная статья на тему 'ASPECTS OF LABOR MARKET FLEXIBILITY AND RIGIDITY'

ASPECTS OF LABOR MARKET FLEXIBILITY AND RIGIDITY Текст научной статьи по специальности «Экономика и бизнес»

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Modern European Researches
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LABOR MARKET / FLEXIBILITY / RIGIDITY / FLEXIBILITY ASPECTS / EMPLOYMENT FLEXIBILITY

Аннотация научной статьи по экономике и бизнесу, автор научной работы — Fedotova Tatyana A.

The relevance of the studied problem is conditioned due to the formation of the concept of flexibility in the management of the labor market. The purpose of the article is to determine the essence of flexibility and rigidity of the labor market, their positive and negative characteristics. The leading approaches to the study of this problem are information-analytical and comparative-historical ones. The article highlights the principles and features of managing a flexible labor market, analyzes aspects of employment flexibility and their classification. Article materials may be useful for increasing the efficiency of the modern mechanism of the labor market functioning.

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Текст научной работы на тему «ASPECTS OF LABOR MARKET FLEXIBILITY AND RIGIDITY»

REFERENCES

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Pazukhina, S.V. (2012) Diagnostic methods of professionally significant personal competencies in international students - future teachers. Actual problems of teaching international citizens at a Russian university: theory and practice. Tula: Tula State Lev Tolstoy Pedagogical University.

Pazukhina, S.V. (2013) The development of a multicultural personality in the context of intercultural education. Creative development and self-development of the individual in the context of intercultural education. Grodno: Grodno State University.

Vorozhtsova M.S., Korshunova O.V. (2017) Study of the adaptation of international students to the culture and educational system of another country. Scientific and methodical electronic journal "Concept", 29 (246-251). URL: http://e-koncept.ru/2017/770851.htm.

ASPECTS OF LABOR MARKET FLEXIBILITY AND RIGIDITY

The relevance of the studied problem is conditioned due to the formation of the concept of flexibility in the management of the labor market. The purpose of the article is to determine the essence of flexibility and rigidity of the labor market, their positive and negative characteristics. The leading approaches to the study of this problem are information-analytical and comparative-historical ones. The article highlights the principles and features of managing a flexible labor market, analyzes aspects of employment flexibility and their classification. Article materials may be useful for increasing the efficiency of the modern mechanism of the labor market functioning.

Keywords

labor market, flexibility, rigidity, flexibility aspects, employment flexibility

AUTHOR

Tatyana A. Fedotova,

PhD in Economics, Associate Professor, Dnipro National University named after Oles Honchar, Dnipro 72, Gagarina Avenue, Dnipro, 49010, Ukraine fedotova@ua.fm

1. Introduction

Depending on the way how the relationship between employees and employers has developed, how the relationships are regulated, the labor market can be rigid or flexible. The problems of correlation of flexibility and rigidity of the labor market are quite relevant both for countries where these relations are only introduced to the labor market, and for industrialized countries that actively use flexibility in the mechanism of the labor market.

The development of flexibility in labor relations has conflicting consequences. On the one hand, it helps to increase the economic efficiency of enterprises, economic growth, and, consequently, there is an increasing of employment and welfare of the population. At the same time, flexibility allows making employment less "unified", creating jobs that satisfy the requirements of different categories of workers, including women and youth, and allow them to realize their labor potential.

2. Materials and Methods

Study of methodological and applied aspects of labor market flexibility, analysis of the use of individual flexible forms of employment in modern conditions, the formation of areas for further expansion of non-standard forms of employment.

3. Discussion

A feature of the development of the labor market in modern conditions is the contradictory interaction of the processes and their regulation and deregulation. The concept of deregulation is supported today by neoconservative forces. They argue that the regulated labor market desists to be a market in essence, so the institutional structure, laws and regulations hinder its normal functioning. Therefore, in their opinion, the labor market should change its organizational forms completely. These restrictions, being excessively rigid should be replaced by more flexible ones.

The neoconservatives believe that the basis of a flexible labor market should be unlimited competition, everyone's right not only for free choice of a job, but also for free choice of forms of employment, working hours and forms of social security.

They propose to eliminate the general legislative provisions that regulate the labor market and move on to differential tariff agreements. So that is not labor legislation, but an individual labor agreement (or an agreement within the enterprise) should become the main form of labor regulation.

Neoconservatives give the following arguments:

- new forms of technological progress require more flexible forms of labor utilization;

- Some forms are in the interests of certain segments of the population.

4. Results

Until the 1970s, labor markets in many foreign countries were characterized by state regulation and the great influence of trade unions, full employment, low inflation, the existence of a hard labor market in the context of economic growth. The market was characterized by a guarantee and stability of employment, which was ensured by the social insurance system and strict state policy of full employment, regulation of the dismissal of workers, providing workers with stable incomes by legitimizing the status of trade unions, the stability of the workplace and its security, and the existence of a balancing tax and social security system.

Structural shifts in the economies of these countries led to a contradiction between a tough labor market and a new concept of economic regulation, which was accompanied by crisis in social production and rising unemployment. This caused an objective transition to the concept of a flexible labor market.

The first benefit received or won by employees is considered to be the limitation of the length of the working day, and first was established legally in the XVII century in England. Today, almost in all countries, the law regulates not only the length of the working day, but also the number of working days in a year, weekends and holidays are fixed, etc. However, there is the working time regime in the industry that allows an enterprise to have opportunities aimed to its optimizing and improving the working conditions of its employees: the employee must work a certain number of hours per week or per month and can independently choose a work schedule (start and end time, distribution by day). Such a system has gained wide popularity in organizations that use the work of clerks, administrative staff, engineers, scientists. It gives employees the opportunity to combine family life and work better, take into account their individual characteristics, etc.

In order to regulate labor relations in the Western countries, a tool such as flexibilization is widely used, which literally means increasing the flexibility of the labor market. This is the elimination of its regular, rigidly established volume. The size of the labor force must change rapidly depending on fluctuations in demand for products; labor costs should reflect external changes in labor market conditions, creating savings in connection with the introduction of new technology.

Increasing the flexibility of using workers is also associated with the new concept of the personnel structure of the enterprise: it consists of a core, an intermediate layer and temporary workers. Quantitatively, economists define this in the following ratios: 25% / 25% / 50%. This concept makes it possible to combine intensification and labor efficiency with the diversity of its forms.

Temporary labor can be found quite easily in the market, and therefore, it is possible to decline it without special losses at any time. This is a subgroup of employees with mobile working and employment conditions. They are attracted to work when the conditions of marketing necessitate the expansion of the production program. They do not differ from the intermediate layer in their professional compositions and forms. The only difference is that they are hired only for temporary work, for a certain period of time and, as a rule, for shortened working hours. Existing forms of employment are characterized by the deterioration of all conditions as they move from the core to temporary workers.

Thus, at the present stage, the use of labor is characterized by the development of flexibility of working conditions and by an increasing in the diversity of its forms. Quantitative flexibility (for unskilled labor) and functional (for highly qualified personnel) are being distinguished. The development of labor mobility provides an opportunity to diversify forms of employment. Along with the traditional form (eight-hour work day, five-day week, fifty-two week work year), there are such non-traditional forms as part-time work, week, year, temporary and seasonal work, homework, etc.

The growth rate of employment in non-traditional forms exceeds the growth of employment in the traditional form. Various forms of realization of their abilities to work are created for different groups of the population in terms of age, marital status, gender, experience, training. In the USA and Great Britain, the workforce is covered by non-traditional forms of employment up to one third, and in Germany up to half.

A flexible labor market is characterized by such principles and features:

- prompt response to changes in labor market conditions, that is, changes in demand, supply and prices that occur in accordance with changes in the volume, structure, quality and price of labor;

- territorial and professional mobility of workers;

- the flexibility of the enterprise, which is manifested in the flexible regulation of the volume of products, as well as in the use of new forms of organization of production and labor, personnel management;

- a variety of forms of hiring and dismissal;

- a variety of forms of vocational qualification retraining;

- flexibility of salary differentiation;

- flexibility in the regulation of labor costs;

- flexibility of operating modes and distribution of working time;

- a variety of methods and forms of social assistance;

- a variety of methods and forms of employment (Zavinovskaya, 2000).

There are such aspects of employment flexibility:

- numerical flexibility, that is, the ability of employers to reduce the number of employees in accordance with fluctuations in production volumes. It is considered that this aspect is facilitated by fixed-term contracts, labor agreements and work contracts, as well as the almost unlimited right of employers to dismiss workers;

- functional flexibility, that is, the ability to move an employee from one workplace to another or require a combination of professions in accordance with production needs;

- flexibility of working time - the employer's ability to change the mode and quantity of labor in response to fluctuations in demand and production volumes.

Numerical flexibility. Workers hired by word of mouth to complete a certain amount of work are generally more likely to be fired. However, the likelihood of falling into the number of employees being laid off who were accepted on the basis of different forms of an employment contract is practically the same (Luzgina, 2008). While comparing these data, it can be suggested that lower job security guarantees for those accepted by oral consent are associated not only with the threat of downsizing, but with violations of labor discipline.

Functional flexibility. It was revealed that there are no significant discrepancies between sectors in terms of the degree to which employees are involved in activities that go beyond their work responsibilities. Unlikely that employees and unskilled workers will perform unusual functions from time to time, while aged workers, managers and employees in small enterprises are more likely to perform work that is not part of their job duties regularly.

Small business workers are more likely to combine work with other professions; unlikely to be done by employees, unskilled workers and those employed in the public sector and in the service sector. Employees of new private enterprises combine occupations on a regular basis slightly more likely than traditional workers, however, employees in small enterprises will have to do this more often, although this is less likely to affect unskilled workers and employees (Luzgina, 2008).

Flexibility of working hours. The mode of work depends in part on the industry and profession. Thus, managers, unskilled workers who work in construction and transport, are more likely to set the duration of their work day by themselves. Top managers and specialists, more experienced workers are much less dependent on senior management in choosing the time for the end of the working day. The length of the working day for workers in industry will be determined by KZPP or an individual contract much more likely, and for managers and employees in small enterprises - it will be determined by KZPP or an individual contract unlikely.

Private sector workers work hours by law or contract much less likely; they set their own duration more likely. The mode of operation in the private sector is not significantly

different from other sectors of the economy. However, the workers employed in small enterprises informally or under a contract or labor agreement have much greater chances to work on a schedule (Oganesyan, Kuchkovskaya, 2006).

The simplest and most obvious form of flexibility is quantitative flexibility, which is expressed in the change in the number of employees or the level of salary in response to a change in the economic situation. This kind of flexibility has always been characteristic of the labor market. But in 1970-1980 the flexibility of work in the world was observed in a broader sense, this problem attracted increased attention of specialists and entrepreneurs, which is associated with several reasons (Balakhnin, Sumtsov, Filippova, 2004).

Firstly, the industrial production of the first half of the twentieth century in the industrial era, while dominating in economy, was characterized by the rule of three unities: unity of place of work, unity of time of work and unity of action. According to mass industrial production, this led to the formation of labor organization and labor relations systems that were effective at that stage, but corresponded to the changed production technologies and social relations of the post-industrial era no longer. In economy, being a result of the achievements of the scientific and technological revolution, full employment in large enterprises with a clear division of labor has been replaced by flexible employment regimes based on computer technologies, increased independence and universality of workers, a part of the services sector in which competition has required diversification of forms and customer service modes.

Secondly, for all economically developed countries, since the 1960s, an increase in the proportion of women in the labor force is characteristic, which is associated with the social and technological changes noted above. Family functions of women lead to the fact that they are being employed part-time or in flexible modes of work more likely than men.

Thirdly, the struggle of workers for their rights, the increase in the number of trade unions and their influence, the change in the social policy of many states have led to the development of various forms of social protection, which complicate the adaptation of enterprises to changing conditions. The procedures for determining wages, hiring and firing have become tougher, preventing the increase of economic efficiency of enterprises and thus worsening long-term prospects in the world of work.

As a result, the need for changes led to the formation of the concept of a flexible labor market and its implementation in practice. At the same time, it is a position of both processes contributing to the achievement of quantitative flexibility, and functional qualitative flexibility, which allows flexible modes of work and employment, and changes in wage systems. Therefore, one should rather speak not about the flexibility of the labor market, but about the flexibility of the entire system of labor relations.

Non-standard forms of employment include various forms of part-time employment. They include: part-time employment (employment at half or a quarter of the wage rate and, correspondingly, the same amount from the established working time), the division of jobs (when two or three workers are hired). Non-standard forms of employment also include temporary work and work on the principles of subcontracting, when firms move beyond the scope of their production structure to those types of activities that are not their main ones (protection, nutrition of workers, legal advice).

Among the considered forms of precarious work, remote employment is spreading most rapidly. Its growth for the period 2014-2016. amounted to 10.1% (Musaev, 2017).

Forms of employment under the conditions of flexible use of working time within the framework of a working day, week, year, the whole period of a person's labor activity (part-time, part-time, part-time and part-time work, part-time work, etc.) can be attributed to alternative forms of employment, along with traditional ones.

It is difficult to determine the specific level that would characterize the place of alternative employment and each of its specific forms in the new employment model. One statement is certain: from a social and economic point of view, they are progressive.

First of all, in contrast to the orientation of the employee to long and uninterrupted work during most of his life with a full working day, new weekly forms of employment increase the degree of human freedom in choosing an acceptable mode of work.

Alternative forms of employment also provide additional opportunities for the full and efficient use of labor resources, for engaging those groups of people whom traditional forms are inconvenient or unacceptable for (students, pensioners, people with disabilities, housewives, etc.).

The scale of partial and temporary employment cannot reach the critical point where there is a threat of personnel degradation of the economy behind. Two obvious factors hinder this. The first is associated with the risk of lower incomes, because underemployment cannot provide as high a standard of living as its full form. The second factor lies in the purely industrial sphere. The employee's personal desire is not enough to provide him with part-time employment yet; for this, appropriate jobs are needed. There is no doubt that the need for temporary and part-time workers will be noticeably inferior to the needs for those who work constantly and full time.

Of course, there is a significant list of reasons why an employee gives an advantage to temporary employment. In many countries, when hiring, the right not to work is discussed, for example, during the summer holidays, New Year's holidays, etc. The interests of those people who simply want to have more free time for personal needs (building a summer house, apartment renovation, travel, etc.). In a word, there can be a huge number of reasons for underemployment.

The spread of non-traditional work schedules, primarily of two categories of workers - temporary and working under the so-called alternative working modes became one of the trends, allows taking into account the capabilities of modern technologies and reducing labor costs.

The first category includes workers who do not have a contract in any form (written or oral), and are hired to perform temporary or one-time work. The second category includes four groups identified by statistics: the so-called individual contractors, according to them persons who work under an employment agreement, including workers of free professions - journalists, lawyers, consultants, as well as some other categories of workers; "on call" workers - those who are involved in work only in case of need; employees of special agencies that provide temporary assistance; and finally, workers employed in so-called contract firms.

The advantage of work schedules is their greater flexibility, which allows you to take into account the interests of employers and workers. For employers, this is, first of all, savings on bonuses and social benefits, which have become mandatory for regular employees in many companies, as well as on other expenses often (for the maintenance of premises, their rent or purchase, etc.), therefore that contract and temporary workers, using modern information technologies, can work at home.

In the United States, more than half of the 0 female contract workers combine such work with parenting (Supyan, 2001). At the same time, 25% of independent contractors, 20% of employees of aid agencies and 53% of call workers are part-time workers and only 18% worked on a schedule. According to a nationwide survey, 65% of entrepreneurs think that many firms will expand these forms of labor in the future.

Thus two contradictory trends can be identified in the nature of employment, organization and labor stimulation. On the one hand, in the conditions of a tough labor market, demand for specialists is growing, especially in high-tech industries, and their salaries are increasing, and other forms of motivation are widely used - property

ownership, the right to options, the purchase of shares, etc. On the other hand, under the influence of economic globalization and increased international competition, American entrepreneurs are looking for ways to reduce costs by transferring some of the workers to non-traditional work schedules, and modern technologies allow it currently.

The last quarter of the 20th century is characterized by an increase in labor market flexibility. Homework is widespread. Its economic content becomes different. Not only the women who are burdened by their families, but also skilled workers who have at their disposal personal computers, terminals, and modern means of communication are partially unemployed now. The spread of "electronic homeworking" creates flexible jobs, reduces costs for entrepreneurs on premises, heating, lighting, etc. At the same time, such shifts in the structure of employment create a new lifestyle: work is enriched, employee self-reliance and responsibility are growing (along with possible hardships of self-isolation and lower union organization).

A qualitatively new situation on the labor market objectively requires greater diversity and flexibility in the ways of managing labor resources, including the elements of "self-adjustment" between jobs and the need for them. One of the most important prerequisites for choosing methods of such regulation is the legal recognition and free distribution of flexible forms of employment.

Shortening the working day can produce certain results in the implementation of employment policies. Over the past century, in most Western countries, working hours have been reduced almost by half. The exception to this rule was only Japan. Japanese work an average of 150 hours a year, which is 230 hours more than in the USA, 450 hours more than in Germany and 400 hours more than in France (Artyukh, 2016). Reducing the length of the working day in order to increase employment occurred in Sweden in the 70s, in France in 1982-1983 and in some other countries.

As for the Ukrainian labor market, it should be stressed that labor legislation as an attribute of the rule of law is becoming more stringent, in any case, with respect to employers. An unpaid salary on time (which takes place at many domestic enterprises) is a reason to get into the dock. At the same time, an employee, even in case of downtime, will receive two-thirds of his salary and leave at his own expense (Gabdulina, 2016).

In accordance with the new edition of Art. 24 of the Law of Ukraine "On Remuneration of Labor": "Salaries are paid to employees regularly on working days within the time periods established in the collective agreement, but at least twice a month after a period of time that does not exceed 16 calendar days" (Law of Ukraine, 1995).

After introducing amendments to the Law of Ukraine "On Leave" from 02.11.2000, the employer will have to pay employees 2/3 of the salary if the company is idle (Law of Ukraine, 1996). Thus, Law No. 2073 complicated the situation of enterprises that are idle. Employers have two legal options in the event of an enterprise downtime: either to look for money and pay temporarily non-working employees (that is almost impossible, because if there was money, the enterprise would not stand idle, or to fire them in compliance with labor law requirements (which is also not easy today: sanctions are provided for illegal dismissal up to criminal liability.) The most optimal solution to this problem is to agree with the labor collective on leave at their own expense.

5. Conclusion

Currently in Ukraine, among economists and politicians, it is widely considered that the current labor legislation, which is inherited from the Soviet period largely, became a serious obstacle to the development of a market economy in the country and does not allow employers to use labor resources flexibly.

It is widely believed that the Ukrainian labor market is dualistic: the unregulated commercial sector pays high salaries and takes advantage of labor flexibility, and the tightly regulated traditional sector with low salaries and inflexible labor is an obstacle to economic reform. The key conclusion implies the need to put an end to job security and increase the flexibility of the use of labor resources by moving from permanent labor contracts and collective agreements to individual fixed-term contracts, which are regulated by the Civil Code, and not special labor legislation.

6. Conclusion

This article is intended for scientists, specialists in the field of labor relations, researchers on the problems of the functioning of the labor market, labor market infrastructure workers, teachers, students of economic specialties.

REFERENCES

The Law of Ukraine "On Remuneration of Labor" dated March 24, 1995, No. 108/95-BP.

The Law of Ukraine "On Vacations" dated November 15, 1996 No. 504/96-BP.

Artyukh, E. How many hours a week do they work in different countries. http://evroru.com/skolko-chasov-rabotayut-v-raznyx-stranax.

Balakhnin, G. S., Sumtsov, V. G., Filippova, I. G. (2004) State regulation of employment. Lugansk: Publishing house SNA them. V. Dahl. 256 s.

Gabdulina, Yu. (2016) If you are not paid a salary. URL: http://www.prostopravo.com.ua /trudoustroystvo/stati/esli_vam_ne_platyat_zarplatu.

Zavinovskaya, G. T. (2000) Labor Economics. K .: KNEU. 200 sec

Luzgina, Yu. V. (2008) Assessment of the potential effectiveness of the youth labor market // Diss .. cand. econ. Sciences: 08.00.05. Novosibirsk 161 p.

Musaev, B. A. (2017) Precarious work as a form of implementation of the conditions of the new economic structure. Science of Science. T. 9. No. 2.

Oganesyan, L.O., Kuchkovskaya, N.V. (2006) Mechanism of the functioning of the labor market of the agricultural sector // Bulletin of the Lower Volga Agro-University Complex: science and higher professional education. No. 3. S. 76-85.

Supyan, V. (2001) Sphere of labor in the USA: new trends and challenges of the 21st century. // Problems of theory and practice of management. No. 3/01. S. 96-102.

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