Physicists turn into psychologists

Ukraine’s Deputy Prime Minister Serhii Tihipko told a press conference last week that the most difficult reforms will now be in the social sector. “First of all, I mean the pension reform and reforms of the health care system and the labor law,” he said.

Tihipko also emphasized that the reforms should be carried out without too much delay. “We have a clear-cut action plan and we abide by its logic,” he noted. “Now that the groundwork for development has been laid down, we should think of how not to ‘eat up’ what we will earn. The solution to this problem is in the social sphere.”

Meanwhile, the National Institute of Strategic Studies says the labor market reform is one of the most urgent ones in the social sphere. As it is noted in the institute’s report “Systemic Faults of the Labor Market and the Priorities in its Reform” presented last Friday, employment processes have a decisive effect on social development and the competitiveness of the national economy.

“The Ukrainian labor market is immature, unbalanced, and ineffective,” the report says. “Since the economic reforms began the state has failed to formulate an integrative concept of the labor market policy.”

Academics believe that the labor market is now cushioning crisis shocks just as it did in the early 1990s, i.e., by reducing and delaying wages, actively resorting to incomplete workdays, etc. “As a result, the labor market pattern remains an effective ‘buffer’ to increased social tensions,” the institute concludes. According to Olha Pishchulina, the report’s leading author and chief of the social policy section at the Institute of Strategic Studies, this in fact slows down the restructuring of the economy and conserves an ineffective structure of employment.

Another serious problem of the Ukrainian labor market is the shortage of highly-skilled workers. In the academics’ view, this hinders the formation of innovative competitive businesses.

The report’s authors conclude that, to replace the “Ukrainian model” with a model in which employment, not wages, adjusts to economic upheavals, the labor market requires a major institutional reconstruction. And reconstruction in turn requires a powerful targeted intervention by the state. “The labor market of Ukraine used to adjust to new economic conditions without the participation of state, which now hinders its regulation,” Pishchulina says.

The institute notes that the steps to be taken are still to be discussed because they are not so easy to grasp. It suggests setting the following goals: increasing the power of the employment service, introducing a broader participation of the regions in labor market regulation, shaping a new concept of the economics of higher education, leveling wages according to the types of economic activity, etc.

So, when choosing a profession, young Ukrainians and their parents should not forget that work is, above all, a product on the market. And, before making a choice, one should study the demand for a specific profession in order not to fill the ranks of degree-holding marketplace hawkers. “Unfortunately, there are no plans or forecasts for the labor market,” says Valentyn Fedorenko, Rector of the Ukrainian Institute of Employment Staff Development. “This is why our institute has to retrain a lot of lawyers, accountants, etc., whom universities have ‘churned out.’ It is sad that people who graduated from the Kyiv Polytechnic, i.e., physicists, mathematicians, etc., are being converted into psychologists.