Definition and Meaning of Unemployment
“Unemployment is that state of affair in an economy when some able- bodied persons of working age (15 years – 60 years), willing to work and able to work, cannot find employment at the prevailing wage rate.”
According to this definition, a person is said to be unemployed if he/she does not get work even having the following features:
- between 15 to 60 years of age group.
- able to work (mentally and physically fit).
- willing to work at or less than the current wage rate.
Wage Rate
A wage is a rate of pay commonly affixed to a period of time such as per hour, or per day.
Nature of Unemployment
Voluntary unemployment refers to those who want to be jobless and are doing so freely. They might not be employed if they have little interest in pursuing a lucrative career. Both the “idle rich” and the “idle poor” may be included in this group. In a similar vein, certain antisocial individuals like burglars or pickpockets could also be willfully unemployed. Therefore, those who are jobless voluntarily are not deemed to be unemployed.
Involuntary Unemployment
When people are unable to find a job despite their willingness to labour at the going rate of pay, this is referred to as involuntary unemployment.
Types of Unemployment in India
In India, several types of unemployment can be observed. Here are some common forms of unemployment seen in the country:
Structural Unemployment
This kind of unemployment arises from adjustments in the shape of the economy, such as technological developments or shifts in industries. Structural unemployment happens when there is a mismatch between the abilities possessed by using the staff and the capabilities demanded by way of employers.
Cyclical Unemployment
Also known as demand-deficient unemployment, cyclical unemployment occurs due to fluctuations in the business cycle.
During economic downturns or recessions, there is a decrease in aggregate demand, leading to layoffs and job losses across various sectors.
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Frictional Unemployment
Frictional unemployment refers to brief unemployment that happens when people are transitioning between jobs or getting into the workload of workers for the first time. It is typically short-term and occurs due to the time it takes for job seekers to find suitable employment opportunities.
Seasonal Unemployment
Seasonal unemployment is prevalent in sectors where work is dependent on specific seasons or periods, such as agriculture or tourism. Workers in these industries may experience unemployment during off-seasons when there is no demand for their services.
Educated Unemployment
This type of unemployment occurs when individuals with higher education qualifications struggle to find suitable employment opportunities matching their skill set. It often arises due to the gap between the skills acquired through education and the skills demanded by the job market.
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Underemployment
Underemployment refers to a situation where individuals are employed in jobs that are below their skill level or where they are working part-time despite desiring full-time employment. It can also occur when workers are engaged in jobs that do not fully utilize their education and training.
Disguised Unemployment: Disguised unemployment refers to a situation where more people are engaged in a task or occupation than required, resulting in the underutilization of labor resources. It is often observed in the agricultural sector, where additional workers contribute minimally to productivity.
These are some of the major types of unemployment found in India. It’s worth noting that the unemployment situation in the country is complex and influenced by various socio-economic factors. Additionally, multiple forms of unemployment can coexist simultaneously.
Unemployment, in reality, is taken in the sense of involuntary unemployment.
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The Four Reasons for Unemployment in India
Lack of Skill Development
In India, a significant portion of the population is unskilled or under-skilled, which results in a mismatch between the available jobs and the workforce. Many of the jobs available require specialized skills and knowledge, yet there is a shortage of skilled workers to fill these positions.
Slow Economic Growth
Another reason for unemployment is the slow pace of economic growth in India. During periods of slow economic growth, employers tend to reduce hiring and even lay off employees, leading to a rise in unemployment.
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Education System
India has a large population of young people and a rapidly growing workforce. However, the education system is often not able to meet the demands of the labour market.
Graduates often lack the skills and experience required to get employed, and this is a significant contributing factor to unemployment.
Population Growth
With the population increasing every year, the rate of unemployment also rises. The growth in population outpaces the growth in the economy and job opportunities, resulting in more people being unemployed.
It is important to keep in mind that these variables interact, making the causes and effects of unemployment frequently intricate and intertwined.
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