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The labor market of the Republic of Kazakhstan in the context of global challenges

Abstract

Object: The object of the research is analysis of the current state of the labor market of the Republic of Kazakhstan and determination of promising directions of its development.

Methods: Systematic approach, abstract-logical and monographic analysis, horizontal and vertical analysis of official statistical information and the state of the labor market.

Findings: The characteristic of global challenges to the effective functioning of the Kazakhstan labor market is given. A quantitative assessment of indicators characterizing the dynamics of the labor market of the republic was carried out. The structure of employed and unemployed people is given. As a result of comparing the number of vacancies and resumes presented on the electronic labor exchange, it is concluded that there is a shortage of personnel in the republic. The most and least demanded professions are determined. The characteristic of the level of differentiation in wages of workers is given. The analysis of the system of state regulation of the labor market. The methods of regulation aimed at solving the problems of the domestic labor market, both on a planned basis and in emergency situations, are considered. The characteristic of the current results of the implementation of the Program for the Development of Productive Employment and Mass Entrepreneurship for 2017-2021 "Enbek" is given. The main directions of development of the Kazakhstan labor market are determined.

Conclusions: Effective employment should be ensured by increasing competitiveness, professional mobility and efficient use of labor; it is necessary to ensure the priority creation of jobs in high-tech import-substituting and export- oriented industries, training, retraining and advanced training of personnel taking into account the future needs of the economy, improving mechanisms to promote self-employment of the population.

Introduction

The relevance of the topic of this article is due to global challenges that may entail such significant changes in the labor market as:

 rapid technological development, leading to a change in the requirements for qualifications and skills of the workforce;

 demographic changes in the structure of labor resources: an increase in the number and economic activity of the population over the age of 60, women and people with disabilities;

 the development of a gig economy, which is characterized by the transition of the labor market from the availability of permanent jobs with permanent employment at one employer to temporary projects from different companies with one independent employee (Zakon.kz, 2019);

 A pandemic of the coronavirus infection COVID-19, which caused a decline in production in many countries of the world, which can be considered as the beginning of another “great recession”.

The object of the research is analysis of the current state of the labor market of the Republic of Kazakhstan and determination of promising directions of its development.

The research hypothesis is to determine the adequacy of the system of state regulation of the labor market to global challenges.

Corresponding author's e-mail.

E-mail: berdibekov_a_b@kafu.kz

Based on the analysis of literature and statistical information, the authors came to the conclusion that this hypothesis was confirmed - the Kazakhstan labor market demonstrates the ability to function stably in the face of increasing global challenges.

Literature Review

The labor market is a system of social relations that ensures the reproduction and efficient use of the “labor force” product. This market is a mechanism for the distribution and redistribution of labor by type of economic activity based on the criterion of the effectiveness of its use. The labor market provides an opportunity:

  •  free choice of profession and place of work;
  •  hiring and dismissing workers in compliance with labor law;
  •  independent and at the same time economically encouraged internal and external labor migration;
  •  free movement of wages and other types of employee income while maintaining the priority of the level of education and qualifications, as well as observing the minimum wage established by law (Perova, 2012; Eremin, 1993).

State regulation of the labor market in Kazakhstan is based on the principles of:

  •  timeliness - synchronization of competitive labor resources with the current staffing need;
  •  systematic - consideration of subjects and objects of the labor market as a whole, in their interconnection and interdependence;
  •  goal setting - determination of directions, priorities and prospects for market development;
  •  feedback and continuity - continuous market monitoring;
  •  Efficiency - achieving goals and positive associated results.

In the process of managing the development of the labor market, the following types of state regulation are used (Zmiyak, 2011):

  •  protective, designed to reduce the effects of factors leading to social insecurity of the population of the republic;
  •  incentive, aimed at creating conditions for the implementation of certain forms of work;
  •  restrictive, used to exclude the actions of individual citizens or groups of the population, leading to their gaining advantages over others;
  •  financial and economic, contributing to the growth of supply on the labor market as a result of the use of taxes, subsidies, etc.

Methods

The subject of the study is the analysis of the state and prospects of development of the Kazakhstan labor market. The study was conducted on the basis of a systematic approach, using methods of abstract- logical and monographic analysis, horizontal and vertical analysis of statistical information on the state of the labor market. The information base for the analysis of the labor market of the Republic of Kazakhstan is the data of the Ministry of National Economy of the Republic of Kazakhstan (MNE of the Republic of Kazakhstan), the Ministry of Labor and Social Protection of the Population of the Republic of Kazakhstan and other open sources of information.

Results

In the process of functioning of the labor market, a system of relations is formed between its main subjects - employers and employees, the intermediate links between which may be labor exchanges, private employment agencies, trade unions, etc., which, along with the main subjects, are also elements of the labor market.

From table 1, compiled according to the Committee on Statistics of the Ministry of National Economy of the Republic of Kazakhstan, it can be seen that in 2019 the number of labor in Kazakhstan increased by 2.8% compared to 2014 and amounted to 9214.8 thousand people. or 49.5% of the population of the republic. At the same time, the number of people employed in the economy increased by 3.1% and amounted to 8773.4 thousand people, while the number of unemployed decreased to 443.6 thousand people. (-2.3%). Thus, the employment rate was 95.2%, and the unemployment rate was 4.8%.

In 2019, hired workers accounted for 76% of the total number of employees, self-employed - 24%, which is comparable with countries such as South Korea (25%) and Poland (21%). (Zakon.kz, 2019).

At the same time, during the period under review, the number of employees increased by 9.1%, while the number of self-employed decreased by 12.2%. This indicates the effectiveness of state policy in the field of labor and employment.

Table. Dynamics of the main indicators of the labor market in the Republic of Kazakhstan for 2014-2019

Indicators

2014

2015

2016

2017

2018

2019

2019 to

2014, %

Work force, thous. people

8962,0

8887,6

8998,8

9027,4

9138,6

9214,8

102,8

Busy population, thous. people

8510,1

8433,3

8553,4

8585,2

8695,0

8773,4

103,1

Wage-earners, thous. people

6109,7

6294,9

6342,8

6485,9

6612,5

6667,1

109,1

Self employed, thous. people

2400,4

2138,4

2 210,5

2099,2

2082,5

2106,2

87,8

Self employed, %

28,2

25,4

25,8

24,5

24,0

24,0

- 4,2 p.p.

Unemployed, thous. people

451,9

454,2

445,5

442,3

443,6

441,4

97,7

Unemployment rate, %

5,0

5,1

5,0

4,9

4,9

4,8

- 0,2 p.p.

Youth unemployment rate (aged 15-28 years), %

4,2

4,4

4,1

3,9

3,8

3,7

- 0,5 p.p.

Average monthly nominal wage per employee, tenge

121021

126021

142898

150827

162673

185487

153,3

Nominal wage index, as a percentage of the previous year

110,9

104,2

113,4

105,5

107,9

114,3

+3,4 p.p.

Real wage index, as a percentage of the previous year

103,9

97,7

98,9

98,3

101,7

108,5

+4,6 p.p.

Note - compiled according to the Committee on Statistics of the Ministry of National Economy of the Republic of Kazakhstan.

The largest number of employees live in Almaty (10.7%), Almaty (11.3%), Turkestan (8.9%) and East Kazakhstan (7.7%) regions, the smallest - in North Kazakhstan (3,3%), Mangistau (3.5%), Atyrau (3.6%) and West Kazakhstan (3.7%) regions.

40% of the total number of employees work in the manufacturing sector, and 60% in the service sector. Almost 70% of employees work in the following types of economic activity:

 wholesale and retail trade; car and motorcycle repair (16.3%);

 agriculture, forestry and fisheries (13.4%);

 education (12.7%);

 industry (12.5%);

 construction (7.3%);

 transport and storage (7.2%).

For five years, the number of self-employed population of the republic decreased by 12.2% and amounted to 2106.2 thousand people, of which 91% are independent workers, 6% are employers, 2% are members of a production cooperative and 1% are unpaid family workers enterprises.

In 2018, the self-employed population of Kazakhstan had the following structure:

 52.4% of men, 47.6% of women;

 live in cities - 38%, in rural areas - 62%;

 have primary, general and basic secondary education - 35.9%; vocational education - 40.8%; higher and incomplete higher education - 23.2%.

The average duration of a working week at the main job per one self-employed person is 31 hours. At the same time, 60.8% of the total number of self-employed worked 36-40 hours per week, more than 41 hours - 17.4%.

The largest number of self-employed are residents of Turkestan (17.3%), Almaty (13%) and East Kazakhstan (9.6%) regions, the smallest - in the city of Nur-Sultan (1.7%), Mangistau (1.1 %), Atyrau (1.6%), Karaganda (2.8%), Aktobe (2.9%) and Pavlodar (3%) regions.

The largest number of self-employed (71.8%) are people aged 25-54, 14% - aged 55-64 years, 12.2% - aged 16-24 years.

According to the MNE RK, the income of 853 thousand self-employed (40.5%) does not exceed 60 thousand tenge per month, which is 32.4% of the average monthly nominal wage of employees.

From January 1, 2019, citizens providing services to individuals whose total annual income does not exceed 1175 MCI, must make a single comprehensive payment (SCP).

The SCP, the size of which is 1 MCI for urban residents and 0.5 MCI for those living in rural areas, includes four basic payments:

  • - individual income tax - 10%;
  • - social contributions to the State Social Insurance Fund - 20%;
  • - pension contributions to the Unified Accumulative Pension Fund - 30%;
  • - deductions to the Mandatory Social Health Insurance Fund - 40%.

In the period from January 1, 2019 to January 31, 2020, payments to the budget were made by 297 thousand people who are payers of the SCP, or 14.1% of the self-employed. The total amount of payments amounted to 924.1 million tenge (Azattyq-ruhy.kz, 2020).

In 2019, the number of unemployed in Kazakhstan decreased by 2.3% compared to 2014 and amounted to 441.3 thousand people. or 4.8% of the workforce. The proportion of men among the unemployed was equal to 47.8%, women - 52.2%.

Currently, the unemployment rate in Kazakhstan is below the threshold level of economic security (5%). It is 2.2 times lower than the 2001 level (10.4%), and 1.5 times lower than the pre-crisis 2007 level (7.3%). At the same time, the average duration of the job search period was reduced in comparison with 2004 - by 2.4 times (from 14.9 to 6.2 months)[1], and compared with the level of 2007 (11.7 months) - by 1.9 times.

This, in our opinion, indicates a sufficient degree of stability of the Kazakhstan labor market in the face of the global challenges of our time.

The largest number of unemployed live in Almaty (11.4%), Almaty (10.9%), Turkestan (9.5%), East Kazakhstan (7.8%) and Karaganda (6.8%) regions, the smallest - in North Kazakhstan (3.3%), Mangistau (3.5%), West Kazakhstan (3.7%), Atyrau (3.7%) and Kyzylorda (3.8%) regions.

Youth unemployment is a serious socio-economic problem and a threat to the country's social stability not only for Kazakhstan, but also for any other country in the world. The youth unemployment rate in the world is 13%. This is three times higher than that of the adult population (4.3%) (Novoetv.kz, 2019).

According to the Law of the Republic of Kazakhstan “On state youth policy in the Republic of Kazakhstan”, people aged 15 to 28 years old belong to young unemployed (Adilet.zan.kz, 2015). From table 1, it can be seen that in 2019, the youth unemployment rate over the past five years has slightly decreased and amounted to 3.7%. The proportion of young people aged 15–28 years is 18.4% of the total number of unemployed in the republic.

The situation on the labor market is complicated by labor migration. According to the Commission on Human Rights under the President of the Republic of Kazakhstan, at present, from 300 to 500 thousand illegal labor migrants are illegally working in the republic. Taking into account legal labor migration, the number of foreign workers in Kazakhstan, mainly in the labor-surplus southern regions, is about 600 thousand people. Employers often give preference to migrant workers, both legal and illegal. This is because in the case of hiring an illegal labor migrant, employers save not only on wages, but also on taxes (Shaukenova, 2017).

Currently, a significant part of the population of the republic searches for work mainly on the Internet through special sites and applications. There is an electronic labor exchange in the republic, an electronic labor exchange, on the website of which in the third quarter of 2019 169.9 thousand vacancies were published. The number of resumes was only 116.9 thousand units. Consequently, for every 100 vacancies, there were 69 resumes.

At the same time, in the city of Nur-Sultan the number of vacancies was 3.4 times higher than the number of resumes (23.4 and 6.8 thous. units, respectively), in the Karaganda region - 2.4 times (16.3 and 6.8 thous. units), in Kostanay region - 4 times (15.9 and 4.0 thous. units), in the city of Almaty - 2 times (14.0 and 7.0 thous. units), in East Kazakhstan region - 1.7 times (12.7 and 7.4 thous. units), in Almaty region - 1.5 times (10.1 and 6.7 thous. units), in Pavlodar region - 2 times (10.0 and 4.9 thous. units), in Akmola - 1.5 times (7.0 and 4.8 thous. units) (Kazakhstan Forbes, 2019).

The data presented indicate the presence of a shortage of personnel in the republic.

The following professions were most demanded on the electronic labor exchange:

 security guard (5,4 thous. vacancies);

 car driver (4,2 thous. vacancies);

 nurse (4 thous. vacancies);

 educator (3.9 thous. vacancies);

 Primary school teacher (3.6 thous. vacancies).

At the same time, the excess of the number of submitted resumes over the number of vacancies took place in the professions of lawyer, computer programmer, technical technologist (general profile), economist (general profile) and financier (Kazakhstan Forbes, 2019).

The results of the analysis of the dynamics of wages indicate a steady increase in its nominal value. In 2019, the average monthly nominal wage per employee increased by 1.5 times compared to 2014 and amounted to 185.5 thousand tenge. However, the size of real wages in 2015-2017 tended to decrease.

Mining workers have the highest wages, in which the average wage is 2.1 times higher than the national average, in financial and insurance activities (2 times), in professional, scientific and technical activities (1.8 times).

The lowest level of wages is for workers in agriculture, forestry and fisheries, where it is 62.4% of the average republican level, water supply and sewage systems (65.1%), education (67.1%), healthcare and social services (71, 5%), art (80%).

In the regional context, there is also inequality in terms of wages. The highest level of wages are residents of the Atyrau region, where the average wage is 1.7 times higher than the average republican level, as well as the Mangistau region (1.5 times) and in the city of Nur-Sultan (1.5 times).

The lowest level of wages are residents of the Turkestan region, in which the average wage is 67.7% of the average republican level, North Kazakhstan (69.2%), Almaty (73.8%), Akmola (76.7%), Kyzylorda (78.2%), Kostanay (79.3%) regions and the city of Shymkent (74.8%).

In Kazakhstan, there is a big differentiation in the level of wages of managers and middle managers. Thus, in metallurgy the salaries of managers are 10 times higher than the salaries of mid-level specialists, in the financial sector - 8 times, in construction - 4 times (Kurmanbekov, 2019). The high level of differentiation of workers in terms of wages does not increase their motivation and poses a threat to the socio-economic security of the state.

According to the forecast of the Ministry of Labor and Social Protection of the Population of the Republic of Kazakhstan for the period up to 2025, the labor market in Kazakhstan can develop according to the following scenario:

  1. Increase in the population of the republic to 19.8 million people. will lead to an increase in the workforce to 9.8 million.
  2. Technological modernization of the economy will lead to an increase in the need for personnel by more than 570 thousand people.
  3. The number of medium and high-skilled jobs will increase by 766 thousand, while reducing the number of low-skilled jobs by 530 thousand.
  4. As a result of increasing the productivity of social labor, the number of people employed in agriculture will decrease by 343 thousand people, and the released workers will be employed in such types of economic activities as education, construction, transportation, trade and other services (Zakon.kz, 2019).

The development of the Kazakhstan labor market is carried out on the basis of the Enbek program for the development of productive employment and mass entrepreneurship for 2017–2021 (Enbek.kz, 2016), according to which the reduction of unemployment and the increase in the level of employment are ensured in three priority areas:

  1. Training in popular professions or the basics of entrepreneurship. From September 1, 2019, free training of the first profession of school graduates who did not enter educational institutions in the amount of 21.6 thousand people was started. 56.4 thousand people were enrolled in short-term professional training, 50.3 thousand people completed training, of which 35.5 thousand people were employed, or 70.6%.
  2. Creation of conditions for the development of mass entrepreneurship in cities and rural areas and the expansion of microcredit. As of January 1, 2020, 17774 microloans were issued, of which 15633 (88%) in rural areas and 2141 (12%) in cities. In addition, individuals who complete training under the Enbek Program receive state grants for the implementation of new business ideas in the amount of up to 100 MCI, and up to 200 MCI for young people, members of large families and low-income disabled people. As of January 1, 2020, 40,066 state grants were issued, of which 5,328 grants (13.3%) in the amount of up to 100 MCIs, 34,738 grants (86.7) - up to 200 MCIs.
  3. Development of labor market institutions promoting employment. In this area, an electronic labor exchange has been created, to which 203 state employment centers, 51 private agencies, 4 media outlets and 7 online sites are connected. In 2019, in the framework of this direction, 139.7 thousand people were employed for subsidized jobs, of which 20.7 thousand people for social jobs. (14.8%), for youth practice - 34.7 thousand people. (24.8%), for public works - 84.3 thousand people (60.3%). (Zakon.kz, 2019; Gov.kz, 2020).

The strategic plan of the Ministry of Labor and Social Protection of the Population of the Republic of Kazakhstan for 2017-2021 contains a set of measures that contribute to increasing the level of employment:

  1. Conducting weekly monitoring of the situation at enterprises exposed to the risk of workers being released, which in 2019 covered 390 enterprises with more than 175 thousand employees.
  2. The conclusion of memorandums of mutual cooperation between akimats and enterprises of the regions on the stabilization of production processes, ensuring labor rights and guarantees of workers. As of January 1, 2020, 128 thousand memoranda were concluded, covering 90.3% of large and 84.5% of medium and small production enterprises of the republic, which envisage the preservation of more than 2.3 million jobs.
  3. Development and implementation of comprehensive employment promotion plans. In 2019, employment measures covered more than 659.6 thousand people, of which 449 thousand were employed.
  4. Promoting job creation. As of January 1, 2020, 424 thousand jobs were created, 65.9% of which (279.2 thousand) were permanent jobs, 42.6% (180.8 thousand) were created in rural areas.
  5. Joint investment by the state and business of retraining of layoffs and facilitating their further employment in other areas. At the end of 2019, 711 thousand people were covered by active measures to promote employment, of which 527 thousand were employed.
  6. Quoting in order to protect the domestic labor market, attracting foreign specialists to Kazakhstan. For 2020, a quota of 29.3 thousand people was established. or 0.32% of the economically active population. (Cov.kz, 2020).

In the context of the economic downturn caused by the COVID-19 pandemic in various countries of the world, the Government of the Republic predicts the possibility of the release of workers, a reduction in the number of new jobs and an increase in this level of unemployment. In this regard, a roadmap was developed containing anti-crisis measures to ensure employment for reconstruction, overhaul and maintenance of social and cultural facilities, housing and communal services and engineering and transport infrastructure.

When implementing such projects:

 at least 50% of employees should be hired in the direction of employment centers;

 the share of the use of goods and services of domestic production cannot be less than 90%;

 salary should not be less than 85 thousand tenge (Kazakhstan Forbes, 2020).

Under the state of emergency introduced in connection with the increase in the number of people infected with coronavirus, the Government of the republic invited entrepreneurs to switch to a remote mode of work, in which, in accordance with Article 138 of the Labor Code of the Republic of Kazakhstan (Labor Code of the Republic of Kazakhstan), time records are regulated by the act of the employer, and wage the payment is paid in the same way as in normal operation (Miko soft, 2015).

If it is impossible to work remotely, employers have the right to introduce an incomplete working hours regime - a shorter working week or a shorter working day. Moreover, according to Article 70 of the Labor Code of the Republic of Kazakhstan, wages are paid in accordance with the actual hours worked.

If an enterprise is forced to stop work, then, in accordance with Article 112 of the Labor Code of the Republic of Kazakhstan, such a situation is recognized as a forced downtime, and the employee has the right to receive wages in the amount not lower than the minimum (42500 tenge).

Discussion

As a result of the analysis of the labor market of the Republic of Kazakhstan, the authors concluded that their research hypothesis was confirmed. In the face of constantly existing global challenges, the Kazakhstan labor market has the ability to function stably. Despite the new coronavirus pandemic, the unemployment rate in the first quarter of 2020 remained at the level of 2019 (4.8%), which indicates the adequacy of state regulation of labor and employment. As a result of the implementation of the Ebek program for the development of productive employment and mass entrepreneurship for 2017-2021, the unemployment rate, including youth, is below the threshold level of national economic security (5%) (Arbuzov, 2016). We believe that the implementation of the activities of this and other programs to ensure employment should continue after they are completed.

Conclusion

Effective employment that meets the needs of the national economy should be ensured by increasing competitiveness, professional mobility and efficient use of labor.

The development of the Kazakhstan labor market should be carried out in the following main directions:

  1. Rationalization of the employment structure based on priority job creation in high-tech importsubstituting and export-oriented industries.
  2. Improving the quality of vocational training, retraining and advanced training of personnel, taking into account the prospective needs of workers in the economy of the republic in the conditions of rapid technological development, leading to a change in the requirements for qualifications and skills of the workforce.
  3. The transition in the context of the development of the gig economy to regulate the labor market from the concept of the availability of permanent jobs with permanent employment with one employer to temporary projects from different companies with one independent employee.
  4. An increase in the number of people working remotely.
  5. Improving mechanisms to promote self-employment in order to reduce the imbalance between supply and demand in the labor market.

As a result of the study, the hypothesis about the adequacy of the current system of state regulation of the labor market in Kazakhstan was confirmed. The main points and conclusions of the article have elements of scientific novelty, since at present the traditional problems characteristic of the labor market are becoming more acute as a result of increasing global challenges, such as digitalization and the pandemic. In these conditions, the practical significance of recommendations for the development of the Kazakhstan labor market increases.

 

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