Analysis of correlation between employment and the income of the working age population in the Republic of Moldova

Abstract

This article presents the results of an analysis of the influence of social factors on the employment level of working age population in the Republic of Moldova. Possible threats to the competitiveness of labour market depending on social factors are identified. One of the determining factors of a social nature is the cost of labour force (the price of labour force), which is expressed in the form of wages on labour market. At present, in the Republic of Moldova, wages have lost its economic, social, reproductive, stimulating and regulatory functions and, ultimately, do not reflect the real cost of labour force. The remuneration of labour of hiring workers in the budgetary and real sectors of economy is formed on the basis of two main legislative acts. In the budget sector, the value of minimum wage is the basis for the formation of wages established in the country and the increase in its amount is connected with additional financial resources in the budget, which is not always possible and practically the tariff scale remain unchanged on during of several years, that is, the budget sector is characterized by inertia and stability of the formation process of remuneration of labour. In the real sector of economy, the amount of wages are more mobile, revised annually depending on growth of prices and the productivity of public labour. As a consequence, the difference between the remuneration of labour of the real and budget sectors constitute over 11%. As wages are one of the main sources of income compared with other possibilities of receiving it by various categories of population, the evaluation of its receipt is performed depending on professional status, as well as the analysis of the standard of living based on a comparison of incomes with some existing social standards. As a result of research of the income level of various categories of population, it was concluded that wages do not stimulate employment, especially for young specialists, but, on the contrary, contribute to polarization, stratification of society, social inequality, and low level of wages are one of the most acute problems in the Republic of Moldova, which is in the top of the countries with the lowest remuneration of labour in the region. Low amount of wages are one of the factors of the lack of qualified personnel in labour market, especially in sphere of the provision of services, in the production sector and construction, which affects the quality of the work done and services which determines the decrease in demand and public opinion on them, as well as one of the reasons for the outflow of labour force outside the country in search of a work place (labour migration). As a result of the implementation of ineffective social policies, in particular in the field of remuneration of labour, the phenomenon of poverty takes place in the Republic of Moldova as the consequence of the inequality in the remuneration of labour of working age population in accordance with the real cost of labour force, part of the employed labour force is included in the category of social risks of being poor in labour market. The low level of remuneration of labour is also one of the motives for labour migration, the research of which was performed on the basis of the comparative analysis of statistical data on the number of the resident population and the population with usual residence, which made it possible to obtain a more real situation on labour market, taking into account the absence of more than a year of population. Summing up the research of labour market challenges to ongoing social policies, proposals to improve their effectiveness were elaborated, including in the field of improving forms and systems of remuneration of labour and further liberalization of labour relations, taking into account the experience of the EU countries, the necessity for a deeper research of the correlation between the two aspects of “employment - poverty”, including evaluation the impact and remove of factors that are determine in the existence of the phenomenon of “poverty” of the working age population and the justification of social policies to overcome given situation.