Solving the problem of unemployment

Diploma thesis

Eva Lorenčič (Author), Timotej Jagrič (Mentor)

Abstract

Unemployment negatively affects the government budget and inflicts costs on the unemployed individuals as well as on the society as a whole in many ways. The direct costs of unemployment for the state budget arise due to the benefits paid out to the unemployed, and due to foregone direct and indirect taxes. On the level of an individual, nonmonetary costs are a multiple of the monetary ones, which indicates that employment plays a central role in a person’s well-being. Unemployment has a spill-over effect on the society as a whole and affects not only the unemployed, but also the employed population, particularly in the areas experiencing high unemployment rates. We take the case study of Germany, the country often used as a quintessence of how to overcome the problem of massive unemployment. Before the four Hartz reforms, which were implemented in years 2003, 2004 and 2005, Germany was characterized as the »sick man of Europe« owing to its exploding levels of unemployment, dysfunctional labor market, unsustainable social budget, and rising public debt. As the reforms were put into force, the situation in the German labor market underwent a 360° turnaround and became portrayed as the »German economic miracle«. The true effects of the reforms fully transpired in the economic and financial crisis of 2008/2009, when most countries experienced escalating unemployment rates, while Germany kept them at bay. Studies show that flexible working-time arrangements and short-time work have played a major role in inhibiting lay-offs in German companies during the recent crisis, and hence in preventing a spike in unemployment rates, which we use as one of the points that validate our Model of employment. The government subsidies made it possible for companies to reduce the working hours of their employees instead of laying them off. An important feature of the German labor market is a comparatively high percentage of part-time workers (around 25% in years 2006–2011), which also explains the low unemployment rates Germany has been recording since the reforms were introduced. The reforms cut the amount and duration of unemployment benefits, which gave the unemployed more incentives to find a job. A negative aspect of the reform may be an increased divide between the core work force and the marginal workers, which intensifies social differences and is currently on the agenda of German politics. Also some researches stress the importance of social cohesion and that the risks and opportunities in the labor market should be more evenly distributed. In the accompanying explanations to the Model of employment, some of the successful measures of Germany’s Hartz reforms may be spotted, while at the same time we avoid the »mistakes« of these reforms, thus making sure that social differences among people would narrow down upon the real-life implementation of the Model. When the number of job vacancies sharply exceeds the number of unemployed, and when there are poor prospects of new job openings in the near future, the only viable solution to the problem of unemployment is to reduce the working hours of the existing employees. The Model of employment that we develop represents a possible solution to the problem of unemployment and thus addresses the need to reduce the costs of unemployment to the unemployed individual, to the state budget, and to the society as a whole. The crux of the Model is a re-distribution of the total number of workplaces and total annual working hours among the »new actively employed population«, which comprises all persons having the potential to become or stay employed or self-employed in a given year. The model allows for a flexible arrangement of working hours – from four and up to eight hours per employee per day. Our solution will release the working hours, make them available to the currently unemployed, and hence ensure a more equitable distribution of income and work load amongst the population. In addition, as the workers will be less tired and stressed-out, their productivity will in

Keywords

unemployment;labor force;labor market;working time;flexibility;costs;reforms;

Data

Language:	English
Year of publishing:	2013
Typology:	2.11 - Undergraduate Thesis
Organization:	UM EPF - Faculty of Economics and Business
Publisher:	[E. Lorenčič]
UDC:	331.5
COBISS:	11480860
Views:	1872
Downloads:	151
Average score:	0 (0 votes)
Metadata:

Other data

Secondary language:	Slovenian
Secondary title:	Reševanje problema brezposelnosti
Secondary abstract:	Diplomski seminar je sestavljen iz dveh delov: v prvem delu preučimo nemške reforme trga dela, ki so bile izvedene v letih 2003–2005 (tako imenovane Hartz reforme), kar nam je v pomoč pri utemeljevanju Modela zaposlenosti, ki ga obravnavamo v drugem delu. V drugem delu predstavimo tudi stroške, ki jih brezposelnost povzroča, kar utemeljuje potrebo po iskanju rešitve tega problema in s tem tudi smiselnost izbire teme našega diplomskega seminarja. Podrobno opišemo regulatorne postavke, ki so sestavni del Modela zaposlenosti in ki bi jih morali implementirati še pred morebitno uvedbo Modela v realnost. Predstavljamo ukrepe, vsebovane v nemških Hartz reformah. Pred implementacijo reform se je Nemčije prijel vzdevek »bolni mož Evrope« zaradi visoke stopnje brezposelnosti, rigidnega trga dela, nevzdržne socialne blagajne in večajočega se javnega dolga. V letih po uvedbi reform se je položaj na nemškem trgu dela popolnoma obrnil in se v zgodovino zapisal kot »nemški ekonomski čudež«. Celotni učinki reform so se pokazali šele v času ekonomske in finančne krize (2008/2009), ko je mnogo držav izkusilo povečanje stopnje brezposelnosti, medtem ko se je nemška stopnja brezposelnosti ostala na predkrizni ravni oziroma se celo znižala. Fleksibilno prilagajanje delovnega časa in zaposlitve s krajšim delovnim časom od polnega so v Nemčiji igrale pomembno vlogo pri preprečevanju masovnih odpuščanj zaradi upada gospodarske aktivnosti, kar je zavrlo porast stopnje brezposelnosti v obdobju recesije. Slednje predstavlja tudi enega izmed temeljev našega Modela brezposelnosti, v okviru katerega zagovarjamo fleksibilno razporejanje delovnih ur. V Nemčiji so v času krize podjetja pod določenimi pogoji imela možnost črpanja vladnih subvencij za delno pokritje stroškov dela, kar jim je omogočilo obdržanje večine delavcev na osnovi skrajšanega delovnega časa, ki bi jih brez vladne pomoči morali odpustiti. Tudi sicer je v Nemčiji precej oseb zaposlenih le za skrajšani delovni čas (okoli 25% vseh zaposlenih v letih 2006–2011 je bilo zaposlenih za krajši delovni čas od polnega), kar deloma pojasnjuje nizko stopnjo brezposelnosti v tej državi vse od uvedbe reformnih ukrepov. Pomemben del reform je bil med drugim rez v višini in trajanju nadomestila za primer brezposelnosti, kar je brezposelne osebe spodbudilo k izkazovanju dodatnih prizadevanj pri iskanju zaposlitve. Negativni vidik reform, ki ga omenjajo nekatere študije, se kaže v naraščajoči neenakosti med rednimi in marginalnimi delavci, kar povečuje socialne razlike in napetosti ter si je že prislužilo vidno mesto v razpravah nemških politikov. Nekateri raziskovalci spoznavajo pomembnost socialne kohezije v državi in ugotavljajo, da bi morala biti tveganja in priložnosti na trgu dela enakomerneje porazdeljena. V pojasnilih in regulatornih predlogih, ki spremljajo Model zaposlenosti in so njegov sestavni del, je možno zaslediti poteze uspešnih ukrepov nemških Hartz reform. Hkrati se naš Model izogne pastem in napakam omenjenih reform, kar pomeni, da bi se ob njegovi implementaciji socialne razlike v populaciji zmanjšale. Brezposelnost povzroča stroške državi, posamezniku in družbi v mnogih oblikah. Neposredni in posredni stroški, ki jih ima država na račun brezposelnih (izplačila denarnih nadomestil brezposelnim, manj pobranih davkov na izplačane plače, manj pobranih prispevkov za pokojninsko in invalidsko zavarovanje, manj pobranega davka na dodano vrednost zaradi nižje potrošnje brezposelnih itd.) zavzemajo mnogo oblik in v celotnem obsegu predstavljajo znatno vsoto. Pri tem ne smemo izpustiti ekonomskih stroškov zaradi izgubljene proizvodnje, ker produkcijski tvorec v obliki človeškega kapitala ostaja neizrabljen. Na ravni posameznika so nemonetarni stroški večkratnik monetarnih, kar kaže na to, da igra zaposlitev pri dobrem počutju posameznika pomembno vlogo. Posameznik, ki izgubi zaposlitev, izgubi del dohodka ali celoten dohodek, ki ga je bil vajen, razen tega je prizadet tudi po psihol
Secondary keywords:	brezposelnost;delovna sila;trg delovne sile;delovni čas;fleksibilnost;stroški;reforme;
URN:	URN:SI:UM:
Type (COBISS):	Final seminar paper
Thesis comment:	Univ. v Mariboru, Ekonomsko-poslovna fak.
Pages:	79 str.
ID:	8726119