Employment: Growth,Informalisation And Other Issues - Class 12 Commerce Economics - Extra Questions

Disguised unemployment exists where part of the labour force is either left without work or is working in a redundant manner where worker productivity is essentially zero. It is unemployment that does not affect aggregate output

In India, there is a large amount of graduate, the matric passes people who are unemployed especially in urban areas. Thus 'educated but unemployed' is a peculiar problem in India.

The nature of unemployment in under-developed countries is quite different; it is of chronic and long-term nature. It is now almost universally recognized that the chronic unemployment and under-employment in less developed countries are not due to the lack of aggregate effective demand which, according to J.M. Keynes, was responsible for unemployment in developed countries in times of depression.
Rather it is stated to be due to the lack of land, capital and other complementary resources in relation to the total population and labor force.

Rural unemployment refers to unemployment that exists in rural areas. It is primarily a phenomenon of the agricultural sector. 

The following are the main causes of unemployment:

Measures in the education system to mitigate the problem of the educated unemployed:

•  Make education at the secondary level more career-oriented, which would endow individuals with not only education but also the requisite skills for gaining successful employment.
•  Create a sort of screening process whereby each individual chooses subjects that suit his or her abilities.
•  The introduction of newer subjects and fields of study at the school level should be accompanied by a growth of job opportunities in the sectors that would employ the students electing to study such subjects.

'People as a resource' is a way of referring to a country's working people in terms of their existing productive skills and abilities. As humans contribute to Gross Domestic Product (GDP), they are also considered as resources.

Main Sectors :-
(i) Primary Sector: It includes agriculture, forestry, animal husbandry, fishing, poultry farming and mining.
(ii) Secondary Sector: Quarrying and manufacturing of goods.
(iii) Tertiary Sector: Trade, transport, banks, health, education and all types of services.

Yes, workers are exploited in the unorganized sector. This would be clear from the following points:

 The unorganised sector is characterised by small and scattered units which are largely outside the control of the government. There are rules and regulations but these are not followed. Jobs here are low-paid and often not regular. There is no provision for overtime, paid leave, holidays, leave due to sickness etc. Employment is not secure. People can be asked to leave without any reason. When there is less work, such as during some seasons, some people may be asked to leave. A lot also depends on the whims of the employer. 

Economic activity: Activities that are related to the production and consumption of goods in return for money. The main motive is to earn money. 

The economic activities are:
Primary activity: these are related to the extraction of natural resources.
Secondary activity: these are related to the processing of raw materials.
Tertiary activity: these are related to providing services. 

	Organised Sector	Unorganised Sector	Total
No. of workers	4,00,000	11,00,000	15,00,000
Income (Rs)	32,000 million	28,000 million	60,000 million

It is clear that while a larger portion of workers is working in the unorganized sector, the per capita earning of those in the organized sector is more. The government should encourage the entrepreneurs in the unorganized sector to change them into the organized sector. Moreover, government should introduce some incentives so that more industries could be opened up in the organized sector.

1) Better provision of education
2) Tuition should be provided
3) Many high degrees should be provided.                                                           
4) Poor families should take educational loans at lower interest rates from banks.

On the basis of ownership of assets, the classification of economic activities is as follows.
1. Public Sector: In this sector, the government owns most of the assets and provides all the services, e.g., railways. This sector predominates certain areas like mining, power generation, transport, healthcare, education etc.
2. Private Sector: In this sector, the ownership of assets and delivery of services is in the hands of private individuals and companies, e.g., TISCO, (Tata Iron and Steel Company). This sector predominates in agricultural and allied manufacturing industries, manufacturing of goods trade, hotel etc.

(i) Seasonal unemployment
(ii) Disguised unemployment

SEBC stands for Socially and Educationally Backward Classes. It is another name for all those who belong to castes that are considered backward by the government.

Following are the suggestions to solve the unemployment problem:

(i) Change in industrial technique:
Production the technique should suit the needs and means of the country. It is essential that labour-intensive technology should be encouraged in place of capital intensive technology.

(ii) Policy regarding seasonal unemployment:
Seasonal unemployment is found in the agriculture sector and agro-based industries.

To remove it:
(a) Agriculture should have multiple cropping,
(b) Plantations, horticulture, dairying and animal husbandry should be encouraged,
(c) Cottage industries should be encouraged.

(iii) Change in the education system: Educational pattern should be completely changed. Students who have a liking for higher studies should be admitted in colleges and universities. Emphasis should be given on vocational education. Qualified engineers should start their own small units.

(iv) Expansion of Employment exchanges: More employment exchanges should be opened. Information regarding employment opportunities should be given to people.

(v) More assistance to self-employed people: Most people in India are self-employed. They are engaged in agriculture, trade, cottage and small scale industries, etc. These persons should be helped financially, providing raw materials and technical training.

(vi) Full and more productive employment: The main objective of county’s employment policy should be to increase employment opportunities and productivity of labour. Govt. should adopt a policy that provides employment to all people.

 

(i) Unemployment leads to wastage of manpower resource. People who are an asset for the economy turn into a liability. There is a feeling of hopelessness and despair among the youth. People do not have enough money to support their family. Inability of educated people who are willing to work to find gainful employment implies a great social waste.

(i) Sheela looks after domestic chores. She cooks food, cleans untensils, washes clothes, cleans the house and looks after her children. Since she is engaged in discharging household responsibilities, she is not paid for them. Thus all her activities are non-economic activity.

1- Disguised unemployment is a kind of unemployment in which some people look like being employed but are actually not employed fully. This situation is also known as Hidden Unemployment.

2-  Disguised unemployment means that there are more people engaged in agriculture than are actually required and as such their withdrawal from land will not lower production. To remove this lot of people from agricultural sector should be shifted to work elsewhere. Now, the incomes of people who take up other work would increase the family income without reducing the agricultural production.
3- Disguised unemployment in urban areas implies that more people are involved in family business/ shops than required.

4- Disguised unemployment in rural areas e.g. whole family of a farmer is engaged in farming. Whereas if we remove one or two members of the family to other jobs, then also production of the farm remains the same e.g. suppose three brothers are running a shop and if one brother is withdrawn from the shop and output/sales of that shop remains unaffected.

Unemployment means a situation when all able and willing persons of a country do not get suitable opportunities to work. Unemployment negatively impacts the economy of the country. This is because unemployment creates a feeling of hopelessness and depression among unemployed people. Unemployment results in the wastage of human resource as people are not involved in any kind of productive activities. This makes them a liability for the nation.
Generally, any person who is not gainfully employed in any productive activity is called unemployed. Unemployment may be frictional unemployment, structural unemployment, cyclical unemployment, and voluntary and involuntary unemployment.
Broadly, unemployment in India can be classified into two groups. They are:

• i. Rural unemployment: Seasonal unemployment, disguised unemployment, and chronic unemployment.
  
• ii. Urban unemployment: Industrial unemployment and educated unemployment.
  

Seasonal unemployment: Because of the absence of proper irrigation facilities and subsidiary employment opportunities in rural areas, multiple cropping is not possible in most of the rural areas. Hence, these farmers remain idle for about 5 to 7 months in a year. This situation is called seasonal unemployment. In 195051, the gross irrigated area as a percentage of the gross cropped area was only 17.11%. It has been increased to 35.64% in 199293 and yet more than 25% of cultivable land has multiple cropping. It implies that farmers cultivating approximately 75% of land remain involuntarily unemployed for a substantial part of the cropping pattern.
Disguised unemployment: This problem arises because of the excessive pressure of population on Indian agriculture. In the family farming method which is prevalent in India, each family member shares the farm-work and gets a share of the total farm-product. Here, individual family members may think that they engaged in gainful work though may not be contributing anything to the total product. Thus, even if they are withdrawn from cultivation work, the total farm output would remain unchanged. This feature is known as disguised unemployment in rural India.

The five main employment types are: 

1. Permanent or fixed-term employees. 

2. Casual employees. 

3. Apprentices or trainees – employees. 

4. Employment agency staff – also called labour hire. 

5. Contractors and sub-contractors – hired staff.

The ratio of the number of women working in various jobs to that of women in the country is called women's job participation rate.

On the basis of ownership the following types of industries are.
(i) Private industries which are owned by an individual.
(ii) Government industries which are owned by the Government.
(iii) Co-operation industries which are owned by co-operation institutions.
(iv) Mixed industries which are owned by two or more owners.

The activities based directly on natural resources are called primary sector. Agriculture can be taken as an example. We have to depend, mainly upon natural resources like soil,rain,sunlight,or etc. to grow crops. Therefore agriculture crop is a natural product. In the same way forestry, animal husbandry, mining etc. are also included in the primary sector.

Secondary sector: In the 'Secondary Sector', the natural products are changed into several useful forms through manufacturing for example: making sugar from sugracane or making cement from lime stone and then construction a house. All the industries of this type are kept in secondary sector.

Tertiary(Third) sectors: the activities of tertiary sector do not produce goods at its own, but assist in the process of production. For example: to sell the goods produced by primary and secondary sectors,trains and trucks are needed to transport them to the whole sale and retail markets, trains and trucks are needed to transport them to the whole sale and retail markets, Godowns are required to store the goods manufacture by industries.

Implies the allocation of resources in such a manner that it results in maximization of satisfaction of the people. Economic efficiency is categorized as (a) efficiency in production (b) efficiency in consumption (c) efficiency in direction of production.
(a) Efficiency in production means producing maximum goods with the help of the given resources, which helps in getting maximum output at a minimum cost.
(b) Efficiency in direction of production means producing those goods which are most desired by the people.

Economy is the sum total of economic activities directed towards the satisfaction of unlimited wants using the scarce means. Economy is a system spread over a particular area that reveals the nature and level of economic activities in that area. It shows how people of the concerned area earn their living.

Positive economics uses objective analysis in the study of economics. Most economists look at what has happened and what is currently happening in a given economy to form their basis of predictions for the future. This process of investigation is positive economics.

Full employment occurs when the supply of labour and demand of labour are equal corresponding to a given wage rate, so that labour market is cleared and it is in a state of equilibrium.

The given statement is correct ie flow of income circular in a two sector economy. The income received by households from firms for their services is spent by them on purchase of goods and services produced by the firms. Thus, income goes back from where it had come. This flow of income continues as production is a continuous process.

Full employment is an economic situation in which all available labor resources are being used in the most efficient way possible. 
Full employment embodies the highest amount of skilled and unskilled labor that can be employed within an economy at any given time.

Full employment refers to a situation in which all those people, who are willing and able to work at the existing wage rate, get work without any undue difficulty. It also refers to employment of all the other available resources and factors of production for the production of optimum output.

In this kind of unemployment, people are not to find a job during some months of the year when the demand for labour is lower than usual.

All persons, who are working and though not working, are seeking and are available for work, are deemed to be in the labour force.

People work to earn a living which helps them and their families to survive.

The Central Government of India made an Act for the right to work in 200 districts in India. This Act is called Mahatma Gandhi National Rural Development Guarantee Act, 2005 (MGNREGA, 2005). It is an Indian labour law and social security measures that guarantee work.
Following is the 1 feature of this Act:

People in rural areas are engaged mostly in agriculture, which is a seasonal activity. So, rural workforce migrates to urban area during some part of the year.

Workers who are hired by their employers on a permanent basis and also get social security benefits (like pension, provident fund, etc.) are said to be regular workers.

Jobless growth refers to a situation when the economy is able to produce more goods and services without a proportionate increase in employment opportunities.

The process of moving from self-employment and regular salaried employment to casual wage work is known as casualisation of workforce.

Informalisation of workforce refers to a situation whereby the proportion of workforce in the informal sector to total workforce increases.

In case of rural areas, self-employed workers are greater as majority of rural people are engaged in farming on their own plots of land.

Following are the reasons in which workers can be protected in the unorganized sectors:

1. In the rural areas, this sector comprises of landless agricultural labourers, small and marginal farmers, share croppers and artisans (weavers, carpenters, goldsmiths).
2. These farmers need to be supported through adequate facility for timely delivery of seeds, agricultural inputs, credit, storage facilities and marketing outlets.
3. In urban areas, workers in the small scale industry, casual workers in construction, trade and transport, street vendors, head load workers, garment makers, rag pickers etc. are all a part of the unorganized sector. Small scale workers need government aid for procuring raw materials and marketing of their goods.
4. The government must make concerted efforts to ensure that workers in this sector are not exploited and earn fair wages. They must also be provided with job security and other benefits.

The women employed in low paid work because of the following reasons:

Disguised unemployment	Seasonal unemployment
In this case, the people seem to be employed but are actually unemployed	Seasonal unemployment occurs when people are unable to find a job in certain months of the year.
Ex: Sometime in agriculture family, 5 people are working but only 3 people are needed to work on that farm. In that case, 2 people become surplus and are not needed on the farm. They also do not help in increasing productivity.	Ex: People related to framing sector are busy during harvesting, wedding, trashing, etc. are done bu during another season when plant grow they have nothing to do.
These extra person working in some sector causes disguised unemployment	In the above case during plant growth season the people are unemployed. This is known as Seasonal unemployment.

Most vulnerable people, who need protection in the unorganised sector can be described as under :
(i) In the rural areas, the unorganised sector mostly comprises of landless agricultural labourers, small and marginal farmers, share croppers and artisans (such as weavers, blacksmiths, carpenters and goldsmiths).
Nearly 80% of rural households in India are in small and marginal farmer category. These farmers need to be supported through adequate and timely delivery of seeds, agricultural inputs, credit, storage facilities and marketing outlets. Government should introduce some schemes which help the artisans for getting better livelihoods.  
(ii) In the urban areas, unorganised sector comprises mainly of workers in small scale industry, casual workers in construction, trade and transport etc. Those who work as street vendors, head load workers, garment makers, rag pickers etc also fall into this category. The casual workers in both rural and urban areas need to be protected. 
(iii) Majority of workers from Scheduled Castes and Tribes and backward communities find themselves in the unorganised sector.  Besides getting the irregular and low paid work, these workers also face social discrimination.

(i) Population control
(ii) Encouragement to cottage industries
(iii) Agricultural development
(iv) Industrial development
(v) Educational reforms
(vi) Five-Year Plans
(vii) Encouragement to vocational education
(viii) Rural development programmes
(ix) Employment guarantee programme.

Problems of educated unemployed:
(i) Many youth with matriculation, graduation and post-graduation degrees are not able to find job.
(ii) Unemployment among graduate and post-graduate youths has increased faster than matriculates.
(iii) A paradoxical manpower situation is witnessed as surplus of manpower in certain categories co-exist with shortage of manpower in others.
(iv) There is unemployment among technically qualified persons on one hand while there is a dearth of technical skills.

Types of unemployment found in India are:
(i) Disguised unemployment: In disguised unemployment, people appear to be employed while actually they are not adding to the productivity. This usually happens among family members engaged in agricultural activity.
(ii) Seasonal unemployment: Seasonal unemployment happens when people are not able to find jobs during some months of the year. Agriculture in India is not a full time occupation. It is seasonal. This type of unemployment is usually found in agriculture.
(iii) Educated unemployment: It has become a common phenomenon in urban areas. Many youth with matriculation, graduation and post graduation degrees are not able to find jobs. A study showed that unemployment of graduates and post graduates has increased faster than among matriculate youths.

Unorganised sector is characterised by small and scattered units, which are largely outside the control of the government.
The two disadvantages of unorganised sector are as follows:
(i) Here the employment is not secure.
(ii) Jobs here are low-paid and often not regular and there is no provision for Provident Fund, overtime, paid leaves, holidays etc. for the employees.

The various ways for generating employment opportunities both in rural and urban areas are as follows:
(i) Education and healthcare sector can create massive employment in urban as well as rural areas. Proper planning is required to strengthen these sectors.
(ii) Allied activities like horticulture, pisciculture should be promoted through financial assistance, awareness programmes which will create employment in rural areas. 
(iii) Promotion of small scale industries and self help groups (SHGs) will create scope of employment in urban areas.
(iv) Every region has potential for increasing the income and employment for people in that area by promoting tourism, regional craft of that area and by introducing new services like IT.
(v) Social safety net programmes like MGNREGA (Mahatma Gandhi National Rural Employment Guarantee Act, 2006), JNNURM (Jawaharlal Nehru Urban Renewal Mission), etc. generate massive employment in rural and urban areas respectively.

Problems of farm labourers:
(i) They come either from landless families or families cultivating small plots of land.
(ii) They do not have a right over the crops grown on the land.
(iii) They get wages in cash or in kind e.g. crop.
(iv) Wages vary widely from region to region and from crop to crop, etc.
(v) Wide variation in the duration of employment is also seen.