Privredna izgradnja 2005 Volume 48, Issue 1-2, Pages: 81-92
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Policy of the labour market and employment strategy

Radić Jova

In terms of economy, it is practically impossible to tackle separately the issues of unemployment and labor market, Only in the non-market economy environment that existed till the very end of the past century the issue of human resources employment was treated as a dominant ideological and political issue. That resulted in inherited high rate of hidden unemployment, low labour productivity, technological gap in relation to the countries with the developed market economy, imbalanced regional development, and the like. People's psychological fear from unemployment resisted the reestablishment of the labour market. Many of them have experienced stressful job losses. Regretfully, in the first years of the market reestablish men t, due to well-known circumstances, new jobs have been created much slower than the surplus jobs have been eliminated in the rationalization process. That additionally increased the fear from unemployment and resistance to necessary transformation of labour legislation which should free the labour market from inflexible administrative restrictions. High unemployment rate does not characterize only the less developed countries. We have highlighted the problem in the EU member states, as well. Although we have not conducted a detailed empirical analysis, we have concluded that the issue of labour market functioning and unemployment have been the major internal problem for EU for many years now. EU plans to reach full employment in the foreseeable future. To reach the set goal, the labour legislation is being changed in terms of further labour market liberalization and achievement of flexible employment; establishment of European institutions with the task to tackle unemployment problems; and allocation of significant resources to finance employment programmes through structuring funds, first of all the European Social Fund. The general conclusion and the message to be drawn out of this paper are in that that the government and its social partners should, each in their domain of responsibility, do their best to free still hidden potentials of the labour market. In order to keep his job or to return to the work environment, a worker should master new competences and skills, and his employer should feel free to make decisions regarding his employees as much as he is free to choose work technology or the product he is going to produce. Of course, the labour market, particularly in high unemployment rate environment, does not imply employer's unlimited self-will toward his employees. Humane attitude and the heritage of the democratic world, which include equality among people without any kind of discrimination, gender equality, free movement, health care, right to social welfare, education, and the like, should be the leading principles. After all, EU has in its Social Welfare Charter clearly expressed its attitude toward man and his rights.

Keywords: labor market, employment, unemployment, profit, income, supply, demand, enterprise, transition

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