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An economic condition marked by the fact that individuals actively seeking jobs remain unhired. Unemployment is expressed as a percentage of the total available work force. The level of unemployment varies with economic conditions and other circumstances
Feature of Unemployment
India as a nation is faced with massive problem of unemployment. Unemployment can be defined as a state of workless ness for a man fit and willing to work. It is a condition of involuntary and not voluntary idleness. Some features of unemployment have been identified as follows: The incidence of unemployment is much higher in urban areas than in rural areas. Unemployment rates for women are higher than those for men. The incidence of unemployment among the educated is much higher than the overall unemployment. There is greater unemployment in agricultural sector than in industrial and other major sectors.
Types of Unemployment
Economists and social thinkers have classified unemployment into various types. Generally unemployment can be classified in two types:
In this type of situation the person who is unemployed has no say in the matter. It means that a person is separated from remunerative work and devoid 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 are.
due to various factors. In efficiency of the employers, keen competitions less profit etc. are some of the factors responsible for deterioration in the industry and the business.
the first place, the growth of population directly encouraged the unemployment by making large addition to labour force. It is because the rate of job expansion could never have been as high as population growth would have required. It is true that the increasing labour force requires the creation of new job opportunities at an increasing rate. But in actual practice employment expansion has not been sufficient to match the growth of the labor force, and to reduce the back leg of unemployment. This leads to unemployment situation secondly; the rapid population growth indirectly affected the unemployment situation by reducing the resources for capital formation. Any rise in population, over a large absolute base as in India, implies a large absolute number. It means large additional expenditure on their rearing up, maintenance, and education. As a consequence, more resources get used up in private consumption such as food, clothing, shelter and son on in public consumption like drinking water, electricity medical and educational facilities. This has reduced the opportunities of diverting a larger proportion of incomes to saving and investment. Thus, population growth has created obstacles in the way of first growth of the economy and retarded the growth of job opportunities.
2) Limited land:
Land is the gift of nature. It is always constant and cannot expand like population growth. Since, India population increasing rapidly, therefore, the land is not sufficient for the growing population. As a result, there is heavy pressure on the land. In rural areas, most of the people depend directly on land for their livelihood. Land is very limited in comparison to
population. It creates the unemployment situation for a large number of persons who depend on agriculture in rural areas.
3) Seasonal Agriculture:
In Rural Society agriculture is the only means of employment. However, most of the rural people are engaged directly as well as indirectly in agricultural operation. But, agriculture in India is basically a seasonal affair. It provides employment facilities to the rural people only in a particular season of the year. For example, during the sowing and harvesting period, people are fully employed and the period between the post harvest and before the next sowing they remain unemployed. It has adversely affected their standard of living.
4) Fragmentation of land:
In India, due to the heavy pressure on land of large population results the fragmentation of land. It creates a great obstacle in the part of agriculture. As land is fragmented and agricultural work is being hindered the people who depend on agriculture remain unemployed. This has an adverse effect on the employment situation. It also leads to the poverty of villagers.
In Rural India, village or cottage industries are the only mans of employment particularly of the landless people. They depend directly on various cottage industries for their livelihood. But, now-a-days, these are adversely affected by the industrialization process. Actually, it is found that they cannot compete with modern factories in matter or production. As a result of which the village industries suffer a serious loss and gradually closing down. Owing to this, the people who work in there remain unemployed and unable to maintain their livelihood.
7) Defective education:
The day-to-day education is very defective and is confirmed within the class room only. Its main aim is to acquire certificated only. The present educational system is not job oriented, it is degree oriented. It is defective on the ground that is more general then the vocational. Thus, the people who have getting general education are unable to do any work. They are to be called as good for nothing in the ground that they cannot have any job here, they can find the ways of self employment. It leads to unemployment as well as underemployment.
LF = U + E
We have unemployment rate or UR, expressed as
UR = U / LF * 100%
In a case of 100,000 people in the labor force and 10,000 of whom are unemployed (lost jobs and actively seeking one), the unemployment rate would be calculated as
Implications for government spending and taxation. High unemployment is expensive for the government
and, therefore, for the taxpayer. For every unemployed person, there are two costs to the government. First, the unemployed worker will be entitled to benefit, and if he/she is young, or older but remains unemployed for a long period of time, he/she will be offered training under the 'New Deal'. Secondly, there is the less obvious cost of the loss of income tax revenues the worker would have paid in work. These workers would have been paying VAT as well through their purchases. Put together, some economists have estimated that the cost to taxpayers of each unemployed person is up to 9,000 a year.
There
resources. The existence of any idle resources means that the economy will be at a point within its production possibility frontier (PPF).
Unemployed workers (young men, in particular) may create other external costs in the economy, like crime for example. The governments of the 80s always dismissed the coincidence of rising crime figures and rising unemployment. Was it really a coincidence; given that many of
the new unemployed were young school leavers with no experience in work?
In
earnings, although this may be balanced by redundancy payments. But in the long run, the long term unemployed will find it harder and harder to find a job, as they find that the skills they have become less relevant and they have had no new training.
countries need to ensure that their welfare systems do not provide disincentives to work
Policies affect the labor market by reducing the supply of labor - For example, work sharing, early retirement, and reduced migration.
Generalized income guarantees - Guaranteed Minimum Income (GMI), Negative Income Tax (NIT) and Basic Income. This provides some limited security for those facing unemployment and it provides an income floor below which no one falls without imposing a ceiling beyond which no-one rises. With a Basic Income, because it is a universal payment, people are always advantaged by any extra income obtained.
Provide more training and education to the unemployed. This could help improve computer skills and communication. These people will become more confident and employable.
The Government needs to try to create demand in the economy. It could; Give grants to businesses to produce goods have projects such as road building Cut interest rates to encourage spending