An important component of the social and economic potentials of the region is its labor potential, which is the total labor force and the aggregate social ability of the population to work. As an economic category, labor potential reflects production relations regarding the reproduction of psychophysiological, qualification, spiritual and social qualities of the able-bodied population. On the quantitative side, labor potential is labor reserves, which are determined by the total number of labor resources, their gender and age structure, educational level and opportunities for their use.
The labor resources of the region are the part of the country’s population that has physical and spiritual abilities to work and which is an active and potential labor force.
In fact, the workforce includes:
population of working age: men aged 16 to 60 years and women – from 16 to 55 years (with the exception of non-working disabled workers and war I and II groups and non-working men and women of working age who receive old-age pensions on preferential terms); the population older and younger than the working age engaged in social production.
The labor force of both the country and the region can be characterized by such parameters as:
educational level, reflecting the proportion of persons with primary, secondary, secondary specialized and higher education; professional and qualification structure that characterizes labor resources by types of activity, professions, specialties and level of qualification; sex-age structure, reflecting the ratio of age and gender-differentiated groups; socio-economic heterogeneity of workers associated with the complexity of labor in certain groups (unskilled, qualified and highly qualified labor; for managers – managers of the highest, middle, lower level).
To assess the state of the workforce of a country or region, the following system of indicators is used:
(a) Total labour force;
b) the average annual number of workers and employees in the national economy;
c) the level of employment of the population;
d) the composition of employees by sex and age;
e) sectoral structure of employment of the population;
(e) Level of education and training.
State regulation of the labor potential of the region is an integral part of the mechanism of regional management. It covers the demographic, social and economic aspects of the object of regulation, its reproductive cycle – formation, distribution and use. It should be noted that the market mechanism is fundamentally incapable of solving the problems of employment (unemployment), so market forces and state regulation of the labor market and labor potential are objectively designed to complement each other. The system of state regulation of the labor market is a set of specific legally fixed rules for the interaction of economic agents, which are based on market relations.
State regulation of labor potential involves the solution of the following main tasks:
ensuring scientifically based reproduction of the population as a whole in the republic, in individual regions and districts; achieving rational employment of the population, that is, creating conditions under which people’s need for work and study is satisfied; providing branches and spheres of the national economy with labor, the quantity and quality of which would correspond to real needs; rational and effective use of labor potential and certain groups of the population (youth, women, people of older working age).
State regulation of the labor market and labor potential is carried out in the following main areas: forecasting and planning of demographic development, labor resources and the labor market; employment regulation; social protection of the population.
The system of state regulation of labor potential is based on the consideration and use of political, social, economic and legal factors. It involves the use of direct (administrative) and indirect (economic) management methods. Direct methods of regulation include such effects on the labor potential of the regions that directly determine its state through the activities of special funds and the development of employment promotion programs, the creation of appropriate regulations, tariff and qualification systems, remuneration systems, forms of contractual relations, and wage indexation. Indirect (economic) methods change the motivation (interest) of economic entities in the development of labor resources in the region and are implemented through the tax, credit system, indicative planning.
In turn, the totality of measures of state influence on the level of employment (unemployment) can be divided into two groups: active and passive. Active measures are directly aimed at resolving the problem of unemployment and increasing the level of employment (job creation, subsidies, preferential taxation, organization of public works, benefits for the provision of material resources, guaranteed marketing of products, flexible working hours, etc.). Along with the above measures, which are not aimed at increasing the demand for labor, active measures of state regulation of labor potential include influences aimed at reducing the supply of labor (increasing the duration of schooling, parental leave, annual leave, etc.).
Passive methods of state regulation of the labor market include allocations for the payment of unemployment benefits and partial compensation, to the unemployed their loss of income.