Unemployment

Unemployment

Unemployment means lack of jobs even for those who are able and willing to work at the prevailing wage. The unemployment may be defined as the gap between the potential “full employment” and the number of employed persons.

Full employment: Full employment is a condition of the national economy, where all or nearly all persons willing and able to work at the prevailing wages and working conditions are able to do so.

Unemployment = Labor force – (no. of employed + frictionally unemployed)

Measurement of unemployment rate:

—  Unemployment Rate = (Number of unemployed)  ÷ labor Force × 100

—  In India NSSO(National sample survey organization), uses three concepts of unemployment:

q  Usual status of unemployment (1 year)

q  Current weekly status of unemployment (1 day)

q  Current daily status of unemployment (1 hour)

Classification of unemployment:

How can employment be classified?
There are four types of job. These are primary, secondary, tertiary and quaternary jobs.

Primary jobs involve getting raw materials from the natural environment e.g. Mining, farming and fishing.

Secondary jobs involve making things (manufacturing) e.g. making cars and steel.

Tertiary jobs involve providing a service e.g. teaching and nursing.

Quaternary jobs involve research and development e.g. IT.

Types and Forms of Unemployment:

Various social thinkers and economists have categorised the unemployment in various ways. Generally unemployment of two types:

1) Voluntary unemployment 2) Involuntary unemployment.

1) Voluntary unemployment:

In this type of unemployment a person is out of job of his own desire. He does not work on the prevalent or prescribed wages. Either he wants higher wages or does not want to work at all. It is in fact an imposed situation. In economic terminology, this situation is “voluntary unemployment”.

2) Involuntary unemployment:

In these types of situation the person who is unemployed has no say in the matter. It means that a person is separated from remunerative work and denied of wages although he is capable of earning his wages and is also anxious to earn them

Forms and Types of Unemployment According to Hock:

Alfred Hock has categorised unemployment under the following 5 heads:

1) Cyclical unemployment:

This is the result of the trade cycle which is a part of the capitalist system. In such a system, there is going up of profit and also loss of profit. When there is high profit, there is greater employment and when there is depression, a large number of people are rendered unemployment. Since such an economic crisis is the result of trade cycle, then unemployment is a part of it.

2) Sudden unemployment:

When at the place where workers have been employed, there is some change; a large number of persons are unemployed. It all happens with the industries, trades and business where people are employed for a job and suddenly when the job has ended they are asked to go.

3) Unemployment caused by failure of industries or business:

In many cases, a business, a factory or an industry has to close down. There may be various factors responsible for it. There may be dispute amongst the partners, the business may give huge loss or the business may not turn out to be useful and so on. Normally this thing also happens all of a sudden.

4) Unemployment caused by deterioration in industry and business:

In various industries, trades or business, sometimes, there is deterioration. This deterioration may be due to various factors. Inefficiency of the employer’s keen competition, less profit etc, is some of the factors responsible for deterioration in the industry and the business.

5) Seasonal unemployment:

Certain industries and trades engage workers for a particular season. When the season has ended the workers are rendered unemployed. Sugar industry is a typical example of this type of seasonal unemployment.

Chapman’s Classification of Unemployment:

Chapman has categorised the unemployment under the following two heads:

a) Subjective unemployment:

This type of unemployment is caused due to the weakness of the worker or the need i.e. rendered unemployed. A wonder may become physically or mentally unit. He may loose the capacity to work, and so on. These causes are responsible for subjective unemployment.

b) Objective Unemployment:

This type of unemployment is the result of the factors that are beyond the control of the person who is rendered unemployed. The circumstances in which he works are responsible for this type of unemployment.

Other Types of Unemployment:

Apart from the unemployment's enumerated above; there are other types of unemployment as well. These forms or types of unemployment are as follows:

1) Structural unemployment:

In this type of unemployment the unemployment caused by the defect in the structure of the industry or the society. It direction continues to change. At one time there is demand for a particular thing so the industry concerning that particular thing goes up. At a later date or after sometime, the demand for that particular thing goes down and demand for something else goes up.

This gives raise another type of industry. As a result of this feature, unemployment in the previous industry takes place and incidence of employment in the second industry goes up. This is all due to defect in the structure. If there is planned development such unemployment shall not take place.

2) Normal Unemployment:

This is a normal feature of every industry and the situation of employment. It is said that unemployment cannot be abolished completely. In a capitalist economy it may not be so but it is said that in socialist economy such a thing is possible. In a socialist economy, everybody has to provide with employment. Then only the total resources of the country or the society are mobilized for the development of the country. Normally speaking, there has to be some form of unemployment or the other. This is known as normal unemployment.

3) Mechanical or technological Unemployment:

Whenever some technological or mechanical improvement takes place in a particular industry certain hands are rendered employed. As a result of automation in certain industries and rationalization in others, a good deal of persons is made jobless. Gandhiji knew this situation. He knew that in India there was a serious problem of employment. He therefore, opposed automation and introduction of too much technology in various fields of life and industry.

4) Agricultural Unemployment:

This form of unemployment is our main concern in the present chapter. When people engaged in the field of agriculture are rendered unemployed, the situation is known as agricultural unemployment.

5) Educational Unemployment:

In India the situation is at present moment very much to be seen when people who are educated do not get any employment it is known as educational unemployment. There are various factors responsible for it. Sometimes the lesser number of avenues of employment as compared to the persons coming out of the educational institutions are responsible for this situation.

Causes for unemployment in India:

—  Rapid Population Growth

—  Economic Inflation

—  Economic Recession

—  Changing Technology

—  Demand for highly skilled labor

—  Global Competition

—  Illiteracy

Ø  Over 70% of total labour force is illiterate or educated below primary level

Ø  Agriculture – backward farming 70 % population depend on it

Measures to reduce the unemployment rate in india:

• NREGA
• Sampoorna Grameen Rozgar Yojna
• Swarna Jayanti Gram Swarozgar Yojna
• Prime Minister’s Employment Generation Programme
• National Food for Work Programme
•  Prime Minister's Integrated Urban Poverty Eradication Program (PMIUPEP)
• The Swaran Jayanti Rozgar Yojana
• Jawahar Gram Samridhi Yojan