Yartseva V. V., Beschastna D. O., Rieznik M. A.

Oles Honchar Dnipropetrovsk National University

THE PROBLEM OF UNEMPLOYMENT IN UKRAINE AND THE WAYS TO SOLVE IT

Unemployment is an economic and social phenomenon, when on the labour market the supply of labour is bigger than the demand for it; thus, there are more applicants for a job than vacancies. The problem of unemployment in Ukraine is urgent at the current stage of the development of the country and its transition to the market economy, because the higher the unemployment rate is, the lower the level of economic and social development is. The problem of unemployment directly affects every working citizen who pays a certain amount of money from their salary to the compulsory state social insurance against unemployment. In order to study the problem of unemployment, first of all, it is necessary to know the reasons for it. One of the main reasons for unemployment in Ukraine is the decline in domestic production and, as a result, the reduction in the number of jobs. Another problem is the fact that the economy suffers from cyclical downturn. The abrupt transition to the automation of technological processes of production may cause the growth of unemployment.   

The Table 1 shows the analysis of unemployment in Ukraine in January 2012 and January 2013.

Table 1

According to the State Statistics Service of Ukraine, the unemployment rate in January 2013 increased by 8.37% compared to 2012. As of January 1, 2013, 564.5 thousand unemployed people were registered in the State Employment Service, while in January 2012 this number amounted to 520.9 thousand, the number of people receiving the financial aid increased by 9.38%. The average unemployment benefit per year increased by 18.76%.  

The unemployment rate differs according to the region of Ukraine. The largest number of unemployed can be observed in western regions of the country, i.e. in Volyn, Zakarpattia, Ivano-Frankivsk, Lviv, Ternopil and Zhytomyr regions. The lowest rate was recorded in Kherson region, as well as in the cities of Sevastopol and Kyiv. 

Despite the fact that unemployment is an incentive for the working population, in general it is a negative phenomenon in the economic and social environment of the country. The main adverse effects are of social and economic character.

Social effects are as follows: increased social tension, decline in the labor activity, increase in the number of crimes, increase in the number of mental diseases, deepening of social differentiation.

Economic effects are the following ones: reduction in tax revenues, decline in living standards, reduction in GNP and GDP, cutback in production, increased spending on unemployment allowance.

Thus, unemployment leads to severe economic and social consequences.

The problem of employment must be dealt with at the national level by creating and implementing the employment programs. Unemployment may also be eliminated by providing additional jobs, establishing new businesses. The labor market must be analyzed and the conditions for retraining of professionals to meet the needs of today must be created. The development of small and medium-scale business, where owners create additional jobs, must be secured. Such companies must be given the benefits for the payroll fund allocation, thus, providing the business with attractive conditions for entrepreneurial activity.