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Principles of Social Politics. Sample Essay for Students

Principles

Social politics is a complex of social and economic measures aimed at protecting the population from unemployment, increasing prices, etc. This is also a very interesting topic for a dissertation since its versatility goes beyond standard reflections and conventional definitions.

The problem of social protection of the population is differently solved within the framework of a particular socio-economic formation or a specific country.

To ensure such protection, the state must first of all legislatively establish the main social guarantees, the mechanism for their implementation, and the functions of providing social support.

Along with the state, social protection is provided by enterprises (or entrepreneurs) and by the employees themselves.

In the system of social protection of the population the most important element is social insurance, which includes pension, medical, unemployment, and work accident insurance. In developed countries medical and pension insurance is implemented through deductions from wages and profits of the same amount. For example, in Sweden social funds are formed entirely at the expense of the state. Money from these funds is collected by special councils, which include workers and entrepreneurs.

Unemployment insurance is provided from special funds. The size of payments depends, firstly, on the length of the unemployment period, and secondly, on the specific conditions of a country. In the first case, the maximum amounts of payments (from 50 to 70% of the average salary) are paid in the first months for a certain period. Afterwards, the amounts of payments are reduced.

In the second case, the period of employment, work experience, time for providing assistance, etc. are taken into account. For example, in Great Britain only the payment of contributions to the insurance fund is taken into account: there should be 26 ones during the year.

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What Can Be Done?

An important link in social protection of the population is employment and retraining programs. When these programs are put into effect, the state and entrepreneurs should also participate. Every year, US firms need about 30 billion dollars for these measures. The state spends most of the funds on the implementation of the programs of retraining.

On a national scale, the modern state, with the aim of reducing the army of the unemployed, tries to regulate wages so that the rates of unemployment growth are lower than those of the growth of labor productivity. To achieve this, an "income policy" – an active monetary policy – is implemented. Such tactic is used by private firms, trying to make sure that the level of labor productivity outstrips the growth of labor payment.

A reduction of work hours can result in the implementation of an employment policy. Over the past 100 years in most developed countries the working day has been halved. Only Japan is an exception to this rule.

One of the elements of social protection of the population in a planned market economy is the legal regulation of wage labor, which is realized through the legislative establishment of minimal wages and pensions, as well as through the procedure for collective bargaining with respect to working conditions.

However, just some numbers are not enough for complete harmony. They must be balanced and should inspire people's trust and understanding, but not rejection and anger. Unfortunately, the authorities often forget about this.

A set of basic goods and services that satisfy the basic physiological and social needs of an individual or typical families of different types (with one, two, or more children, for example) is accepted as a minimum wage base. Different countries include different components to this set. In the US, for example, it includes the payment of hired housing, about 20 types of meat products, the purchase of a used car every 5 years, etc.

The size of the minimal wage is up to 50% of the average one in developed countries. A separate minimum is set for young people.

The most common poverty criteria are unemployment and inflation, the level of which characterizes the degree of poverty. The main criterion of poverty is the level of income. The general criterion of poverty is the structure of family expenses, for example, the share of food costs.

The overall level of poverty in a country is determined by the proportion of the number of poor people at the age of 16 and older in the total population. Poverty itself is measured by a living wage in the form of a vital (or physiological) and a social minimum. The first one determines the satisfaction of only the main physiological needs and the provision of basic services.

The second one, in addition, includes minimal spiritual and social needs. Despite these two indicators, the level of poverty of different people can vary greatly. In the final analysis, only their belonging to this category makes sense. Internal classifications have an exclusively visual and fact-finding meaning.

Salary Levels

Calculations

An important element of the program of social protection of the population is the regulation of wages depending on the scope of activity and profession and of the form of ownership. Thus, in developed countries direct regulation of wages in the public sector is carried out. The special legislation establishes the rights and duties of employees in the state apparatus, military personnel, and elected officials.

Typically, in the US and some other countries, wages in the public sector are lower than in the private one, but there is a much greater job security and higher social payments for such employees.

Employees’ salary is regulated by collective and tariff agreements. A broader range of issues is regulated by collective agreements. They, in addition to paying salaries, record the length of the working day and holidays, specific guarantees in relation to working conditions, extra payments for overtime work, provision of supplementary food, etc. The tariff agreement establishes a minimal wage in various industries and minimal guarantees of the level of wages for employees of different qualifications.

The tariff agreement with the participation of a firm’s representatives and employees is made with the assistance of the state. It is the guarantor of its implementation. While the tariff agreement is valid, a strike is considered an illegal means of resolving labor disputes.

An extremely important link in the system of social protection of the population is indexation of money incomes to the level of prices. It is used in all developed countries. In some countries local unions have sought full compensation for price increases.

The incomes of working people are not exhausted by the sources mentioned above. In any market economy there is a system of compensation payments, which is an important part of income. Such system is necessary because inflation at a certain rate prevents the increase in monetary incomes of the population in any country.

In fairness, we should note a certain positive role of inflation: it does not allow industrial and commercial enterprises to stop and calm down at some point. They are forced to produce more and more goods and services, improve their quality. Otherwise, they will be attacked by inflation.

However, its impact must be mitigated by introducing protective mechanisms for low-income categories of the population that is usually deprived of the opportunity to promote the development of a market economy and thereby to increase or at least maintain their material well-being at the same level at their own expense.

A well-known method of protection is the indexation of income, but the goal should not be to completely compensate for inflation. Admittedly, it can be argued that the market balance will be achieved by the size of the "gap" that is formed between the rise in prices and the indexation of income.

We believe the notion still dominates that the state should fully compensate for the consequences of price liberalization. It is not taken into account, however, that such actions would only reproduce inflation and even strengthen it.

Inflation itself is the topic for a separate college paper.

The indexation of incomes is possible on the part of both the state and a firm: the latter gives a part of its profit for this purpose.

However, one cannot but say a few words about such an important component of the state impact on the macro and micro-economic process as planning. It seems that today the use of the term "planning" is almost nonsense if we do not add the adjective "indicative" to it. In other words, some economists extend the absurdity of comprehensive directive planning of the times of real socialism to planning in general.

State planning does not mean socialism. It means only the presence of a thoughtful strategy and formulated goals. It means harmonization of all aspects of an economic policy instead of parties’ secret development and disjointed promotion, pursuing only their narrow group interests.

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