UNEMPLOYMENT

Unemployment is said to exist in a country where the able bodied persons of working age who are ready and ruling to work are not able to get work at the current wage levels. 

Persons who are not willing to work at the existing wage rate and those who are physically or mentally not capable of working are not considered unemployed.

Types of unemployment

Open unemployment – is a situation in which workers willing and able to work are unable to find job opportunities at the prevailing rate of wages.

Seasonal unemployment – employment level depends on the level of economic activity during different seasons. The level of employment improves in the busy season and reduces during slack season. Agricultural operations in India fluctuate from one season to another.

Cyclical unemployment – is caused by cyclical fluctuations in economic activity. The periods of intense economic activity are followed by slack or lean activity period. These periodic fluctuations give rise to variations in volume of demand and investment leading to periods of prosperity and depression.

Disguised (hidden) unemployment – is the result of sharing of limited amount of workload or job by too many laborers. Laborers seem to be busy doing a job  that is inadequate to keep him fully occupied. The same can be carried out by fewer persons.

Under employment – in such a situation, workers are actually producing less than what they are actually capable of. The lack of factors like natural resources, capital, etc. creates such situations and forces labor to produce below their full capacity.

Structural unemployment – is the result of changes in organizational and institutional set up of an economy. It is also the result of the growing imbalance between the supply of labor and the country’s productive capacity to absorb it gainfully.

Frictional unemployment – is mainly the result of changes in technology and the process of production. The introduction of new techniques in an industry requires new skills or adoption of new mechanized methods of production and may result in loss of jobs for worker (e.g. introduction of mechanized farming / corporate farming)

Technological unemployment – is caused by introduction of superior technology. Due to introduction of new techniques of production, workers become surplus and are retrenched and thus rendered unemployed

CAUSES OF UNEMPLOYMENT

Slow economic growth – the five year plans have embarked upon industrial and agricultural growth. Unfortunately, the growth rate achieved is not enough to absorb all job seekers.

Population growth – the rapid increase in population has resulted in an increased number of job seekers and less job opportunities

Capital intensive technique – large scale industries which have been established are capital intensive and hence offer limited employment. Modern technology limits the scope for employment.

Low priority for small scale industries – small scale industries are labor intensive and a large number of disguised unemployed can be absorbed. Unfortunately they have not been given due importance.

Defective educational system – the excess supply of educated job seekers is the result of a defective education policy. Education has not succeeded in becoming job oriented.

Poor human resource planning – unemployment it the result of the imbalance between demand for and supply of jobs. It is necessary to plan the supply of educated youth in different disciplines so that supply is in accordance with demand.