EMPLOYMENT &

UNEMPLOYMENT
By
Mr. Pankaj Kumar, PGT Economics, JNV Bhavnagar
Mr. Santlal Kumar, PGT Economics, JNV Banaskantha
Navodaya Vidyalaya Samiti, Pune Region
 WHO IS A WORKER?
► A worker is any individual who works for an employer, whether under a
contract of employment, or any other contract where an individual
undertakes to do personally any work or services.
► He is engaged in some production activity, contributing to the flow of
goods and services during a year in the economy is called GDP.
► A worker or an individual engaged in production activity contributes to the
its process by rendering its services.
 Labour force
► All persons, who are working (have a job) and though
not working, are seeking and are available for work, are
deemed to be in labour force.
► Labour force = Persons Working + person Seeking and/or
available for work
Labour force participation rate:

►
 Labour supply
Work force
Theworkers
It refers to various amount of labour that number are
of persons, who are
willing to
work, corresponding to a particular wageactually
rate. employed at a particular
time are known as workforce.
Difference Between Labour
Supply & Labour Force
LABOUR SUPPLY LABOUR FORCE

It refers to supply of labour It refers to the number of persons

corresponding to different wage actually working or willing to work. It
rates. Supply of labour is measured in is not related to wage rate.
terms of man days of work and is
always related to wage rate.

Supply of labour can increase or Because it is measured in terms of the

decrease even when the number of number of persons, size of labour
workers remains constant. Because force increases or decreases only
the supply of labour is measured in when the number of persons actually
terms of man days. working.
 Calculation of number of
unemployed people:

Unemployed people = labour force – workforce

 Meaning and types of
employment:
► Employment is an activity which enables a person to
earn means of living.

self
employment
Regular
Employment
Workers
wage
employment
Casual
Workers
 Self Employed
► The worker who own and operate an enterprise to earn
their livelihood are known as self-employed.
► More than 50 % of work force in India belongs to
self-employment category.
► Example: shopkeepers, traders, businessmen etc.
 Wage/Hired employed
► Those people who are hired by others and are paid
wages or salaries as a reward for their services are
called hired workers.
► They offer their labour services to others and in return
get wages.
► Example: a doctor is employed by a hospital, a teacher
is employed by a school.
 Casual Workers
► Those people, who are not hired by their employers on
a regular/permanent basis and do not get social security
benefits are said to be casual workers.
► They are not hired on permanent basis. It means they
don’t have a) regular income, b) protection or
regulation from the government, c) job security, d)
social benefits.
► They are account for 32.8 % of India’s work force.
► Example: labour working in construction sites, brick
making industry.
Regular Workers (Salaried)
► When a worker is engaged by someone or by an enterprise and
paid his or her wages on a regular basis, they are known to as
regular salaried employees or regular workers.
► They are hired on permanent basis and also gets social
security benefits like provident funds, travelling allowance,
pension, gratuity etc.
► They are account for just 14.6 % of India’s workforce.
► Example: professors, teachers, police men, army personnel
etc.
Employment Distribution (1999-2000)
Nature of employment Percentage

Self employed 52.6

Regular workers 14.6

Casual workers 32.8

Total 100

Distribution of work force by industry (1999-2000)

Industrial category Place of residence Gender Total

Rural Urban Male Female

Primary Sector 76.7 9.6 53.8 75.1 60.4

Secondary Sector 10.8 31.3 17.6 11.8 15.8

Tertiary Sector 12.5 59.1 28.6 13.1 23.8

Total 100 100 100 100 100

Jobless growth
► It refers to a situation when there is an overall all
acceleration in the growth rate of GDP in the
economy without corresponding expansion in
employment opportunities.
Trends in employment (sector-wise)

Sector 1972-73 1999-2000

Primary 74.3 60.4

sector
Secondary 10.9 15.8
sector
Tertiary 14.8 23.8
sector
Total 100 100
Casualisation of workforce
► The process of moving from self-employment and
regular salaried employment to casual wage work is
known as casualization of workforce.
Informalisation of Indian
Workforce
► It refers to a situation where by the proportion of
workforce in the informal sector to the total workforce
increases.
Difference between formal sector and informal
sector
SIZE OF WORKFORCE IN INDIA

► About 70% of the workforce comprises of male workers;

30% are female workers.

► Nearly 70% of the workforce is found in rural areas;

urban workforce is only 30% of the total.

► % of female workforce in rural areas is nearly 30%; while

it is only 20% in urban areas.
WHY THE BULK OF OUR
WORKFORCE IS RURAL BASED?
► This is simply because bulk of the jobs are in rural
areas.
► Implying that more people are engaged in farming and
allied activities but contributing less to GDP.
► This means low productivity of the workers is low.
► Low productivity implies low earnings, which is why
there is widespread poverty in rural areas.
WHY IS THE % OF FEMALE
WORKERS LOW AND LOWER IN
URBAN AREAS?
This is because:
❑ Female education in India is still a far cry, implying low
opportunities for jobs.
❑ Among most families in urban areas, job work for
women is still governed by family decisions rather than
the individual’s own decision.
❑ Higher employment among women in rural areas is
owing to widespread poverty.
UNEMPLOYMENT

► NSSO defines unemployment as a situation in which all

those who, owing to lack of work, are not working but
either seek work through employment exchanges,
intermediaries, friends or relatives.
► Unemployment is a situation where a person is ready
and willing to work at the prevailing wage-rate but
doesn’t get work.
 Rate of unemployment
►
Types of Unemployment
•Types of Unemployment
•Rural Unemployment
•Seasonal Unemployment
•Disguised Unemployment

•Urban unemployment
•Industrial Unemployment

•Educated Unemployment
•Technologocal Unemployment

•other types of unemployment

•Open Unemployment
•Frictional Unemployment
•Structural Unemployment
•Cyclical Unemployment
 Seasonal Unemployment

► It refers to a situation where a number of

person that are not able to find a job in a
particular season.
Disguised unemployment
► It 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.
► In such a situation more people are engaged in a work than required.
In other words it refers to a situation of employment with surplus
manpower in which some workers have zero marginal productivity.
► For example in rural areas, this type of unemployment is generally
found in agricultural sector.
 Educated Unemployment
► Among the educated people, apart from open unemployment,
many are underemployed because their qualification does not
match the job.
► Faulty education system, mass output, preference for white
collar jobs, lack of employable skills and dwindling formal
salaried jobs are mainly responsible for unemployment among
educated youths in India.
► Educated unemployment may be either open or
underemployment.
Technological Unemployment
► A somewhat structural unemployment may take place in an economy as
a result of technological improvement. Such unemployment may be
described as technological unemployment.
► Due to the introduction of new machinery, improvement in methods of
production, labour-saving devices etc.
► Some workers tend to be replaced by machines. Their unemployment is
termed as “technological unemployment.”
 Open Unemployment
► It refers to that situation wherein the worker is
willing to work and has the necessary ability to
work yet he does not get work and remains
unemployed for full time.
Frictional unemployment
► It is defined as the unemployment
that occurs because of people
moving or changing occupations.
Structural unemployment
► It is defined as unemployment arising from technical change such
as automation, or from changes in the composition of output due
to variations in the types of products people demand. For example,
a decline in the demand for typewriters would lead to structurally
unemployed workers in the typewriter industry.
 Cyclical unemployment
► It is defined as workers losing their jobs due to
business cycle fluctuations in output, i.e. the
normal up and down movements in the economy
as it cycles through booms and recessions over
time.
 Causes of unemployment:
► Slow rate of economic growth
► Population explosion
► Underdeveloped agriculture
► Defective educational system
► Slow growth of Industry
► Decline of cottage and small industry.
► Faulty planning
► Inadequate employment planning.
► Low capital formation.
► Excessive use of Foreign Technology
► Lack of financial resources
► Increase in labour force
Remedial measures for
unemployment
► Accelerating growth rate of GDP
► Control of population growth
► Development to small scale enterprises
► Encouragement in infrastructure
► Rapid industrialisation
► Development of agricultural sector
► Improvement of employment exchanges
► Creation of self-employment opportunities
► Reforms of education system
► Manpower planning
► Special employment programmes
Special programmes to fight poverty and
unemployment:
► Mahatma Gandhi National Rural
Employment Guarantee Act (MNREGA)
► Swarn jyanti Sahari Rozgar Yojana
(SJSRY)
► Swarnjyanti Gram Swarozgar Yojana
(SGSY)
► Pradhan Mantri Rozgar yojna (PMGRY)
 Mahatma Gandhi National Rural Employment
Guarantee Act (MNREGA)
► It aims to enhance livelihood security in rural areas by providing at least
100 days of wage employment in a financial year to every household
whose adult members volunteer to do unskilled manual work.
► Employment is to be provided within 5 km of an applicant's residence, and
minimum wages are to be paid.
► If work is not provided within 15 days of applying, applicants are entitled
to an unemployment allowance. Thus, employment under MGNREGA is a
legal entitlement.
Swarn jyanti Sahari Rozgar
Yojana (SJSRY)
► Swarna Jayanti Shahari Rozgar Yojana (SJSRY) in India is
a Centrally Sponsored Scheme which came into effect
on 1 December 1997.
► The scheme strives to provide gainful employment to
the urban unemployed and underemployed poor,
through encouraging the setting up of self-employment
ventures by the urban and rural poor living below
the poverty line.
► The SJSRY scheme is being implemented on a
cost-sharing basis between the Centre and the States in
the ratio of 75:25.
Swarnjyanti Gram Swarozgar
Yojana (SGSY)
► Swarnajayanti Gram Swarojgar Yojana (SGSY) is a
developmental initiative launched by the Government of
India to provide sustainable income to poorest of the
poor people living in rural areas of the country.
► The SGSY was launched as an integrated programme for
self-employment of the rural poor with effect from April
1, 1999.
Pradhan Mantri Rozgar yojna
(PMGRY)
► This scheme was launched by Central Government in 1993 to help those
who were unemployed to find opportunities of self-employment.
► The scheme targets the youth and women by giving them a financial boost
to help get them into the employment sector.
► The implementation of this scheme is carried out by the District Industries
Centres (DIC) and the Directorates of Industries as well as the banks.