Unemployment Class 12 | Level of Unemployment | Consequences |

Unemployment Class 12 | Level of Unemployment | Consequences | Chapter 10 |

Meaning

Unemployment refers to a situation in which a person is able and willing to work at the existing wage rate but fails to do so. But, those who are not willing to work at the existing wage rate, they are not considered as unemployed.

Workers and Types

A worker is a person who puts himself in some production activity in order to earn some living.

Types of Workers

1. Self-employed Worker: It refers to workers who engage themselves in their own business or profession for earning living. For example; A street vendor selling fruits and vegetable.
2. Hired Workers: It refers to workers who work for others or provide their service to some other person under a service contract in order to get wages or salaries. There are two types of hired worker which are as follow:

• Casual Worker: A casual worker is that worker who is not employed on permanent pay-roll or appointed for daily wages and do not enjoy any social security benefits.
• Regular Worker: A regular worker is that worker who is appointed on permanent pay-roll basis and are entitled to all the social security benefits. These workers are also known as salaried workers.

Participation Rate

1. High dependency Ratio: The overall participation rate of the country is not very high owing to that a large number of people depends on population.
2. High rate of participation but lower level of productivity: The rate of participation in rural areas is very high as compare to urban areas which is 53% which clearly indicates that many people from rural areas are engaged in production activity but their contribution in the level of GDP is very less than the urban areas.
3. High rate of participation by Women in Rural Areas: The rate of participation of the women in rural area is more because of lack of education facilities and increase in poverty level in the rural areas. Due to less education, a person has to work at those activities which yield less wages.

Jobless Growth, Casualisation and Informalisation of Workforce

Jobless growth refers to a situation wherein the rate of GDP increases but the rate of employment does not with the increase in the level of GDP.

Casualisation refers to a situation wherein the percentage of casual hired worker is more over the time in the total workforce trend.

Informalisation refers to a situation in which a worker finds more job opportunities in informal sector as compare to the formal sector.

Types of Unemployment

1. Rural Unemployment: It is that type of unemployment which is found more in rural areas and dominated by two basic type of unemployment which are as follow:

• Seasonal Unemployment: It refers to a type of unemployment wherein a person is not able to find job in a particular season.
• Disguised Unemployment: It refers to an unemployment wherein workers look like they are employed but there is no further increase in the level of production or the level of production is not as per the number of workers employed of the piece of land. In other words, it refers to a situation of employment with greater employment but the rate of marginal productivity is zero.

2. Urban Unemployment: It refers to unemployment which is majorly found in the urban areas of the country.

• Educated Unemployment: This type of employment is found in the urban areas in which a worker is not able to find the job as per his qualification due to which he is counted in the category of underemployed in the country.
• Technical Unemployment: The type of unemployment which is incurred in the economy due to change in technology or due to change in the structure of the economy.
• Industrial Unemployment: It is that type of unemployment which is found in industrial sector due to increase in the population and dependence more on industrial sector.

3. Other Type of Unemployment: These are some other form of unemployment which are neither counted as rural unemployment nor urban unemployment.

• Open unemployment: It refers to a situation in which a worker is able and willing to do the work but still not finding the job as per his choice.
• Cyclical Unemployment: It refers to the type of unemployment which occurs in the economy due to change in business cycle of the country.
• Structural Unemployment: It refers to the type of unemployment which occurs in the country due to change in the structure or change in the type of doing activity.
• Frictional Unemployment: It refers to the type of unemployment which occurs due to movement or change in job from one to another.

Causes of Unemployment

• The growth rate of economy is very slow
• The population is increasing day by day
• Defects in education system of the country
• Lack of development in the agriculture sector
• Fall in cottage and small scale industries
• Fault in planning
• Increase in the level of labour force.

Consequences of Unemployment

1. Economic Consequences: with the increase in the level of unemployment in the country, the man-power of the country is under utilised and can be used more in order to increase the level of production. Along with this, the level of output is also very less and less capital formation because unemployed worker only adds up in the terms of consumption.
2. Social Consequences: With the increase in the level of unemployment in the country, the quality of life of the unemployed worker is very low along with increase in the inequality among the persons due to which a class of society suffers more.

Remedies Available to cut Unemployment Rate

1. Acceleration in the pace of GDP
2. Control on the level of population
3. Special programs for employment opportunity
4. Encourage to cottage and small scale industries
5. Increase in the level of industrialisation.

Policies and Programs Run by Government

1. Swarnjayanti Sahri Rozgar Yojana
2. Swarnjayanti Gram Rozgar Yojana
3. Pradhan Mantri Rozgar Yojana
4. Mahatma Gandhi National Rural Employment Guarantee Act

You May Also Read Indian Economy on The Eve of Independence,  Economic Planning, Agriculture Sector, Strategy of Industrial Growth, India’s Foreign Trade, Economic Reforms Since 1991, Poverty, Human Capital Formation, Rural Development, Unemployment, Environment, India China Pakistan Comparative Study for better understanding of the chapters and scoring higher in upcoming exams.

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