Worker
It refers to an individual who is engaged in some productive activity to earn a living.
Types of workers
Workers are broadly classified into 3 categories
1. Self employed
It Refers to the workers who are engaged in their own business or enterprises In of worker who own and operate an enterprise is known as self employed worker
2. Hired workers
It refers to the workers who are hired by others and are paid in the form of wages or salary as a reward of their services
Hired workers are of 2 types
I. Regular Workers
When a worker is engaged by an individual or an enterprise and is paid wages on regular wages, then they are known as regular workers or regular salaried employees.
In India around 15% of total workforce is engaged as regular workers.
Example-teachers, office employ, manager of an organization etc
II. Casual workers (part time labour)
It refers to the workers who are not employed on regular basis They are casually engaged on a job and in return get entertained by remuneration for the work done.
These employees do not get any job security and social benefits
Labour force
It refers to the sum total of the persons who are willing and able to work at existing wage rate in an
economy.
Labour force includes both employed and unemployed persons
Labour force— Persons working r person available/seeking for work
Workforce
It refers to the part of labour force who are actually engaged in some productive activity. In other words, work force refers to the number of persons who are actually employed at a particular point of time in an economy
Work force participation ratio
It refers to the percentage of population constitutes work force in an economy
Work Force /Total Population x100
Labour supply
It refers to the amount of labour that workers are willing to work corresponding to a particular wage rate
In other words, the labour supply is the total hours that workers wish to work at the given wage rate.
Example-Wage rate-500 rupees per day-worker is ready to work for 8 hours
Wage rate – 1000 rupees per day-workers is ready to work for 10 hours
Jobless growth
It refers to a situation where gross domestic product of an economy grows faster than the employment opportunities which results in unemployment.
In India, the economy is experiencing GDP growth more through technology than the employment of labour.
Casualisation of employment
Casualisation refers a situation when the percentage of casually hired workers in the total workforce tends to rise over time.
Even the skilled workers of urban areas are to struggle for regular jobs due to massive unemployment it the country. Unemployment reduces the bargaining power of workers whereas it increases the bargaining power of employers
Informalisation of employment
Employment structure can be classified as
1. Formal sector employment 2. Informal sector employment
1. Formal sector
It refers to the organized sector of the economy.
It includes all public and private establishments which hire 10 or more workers
The workers of these sectors are entitled to social security benefits (such as pension)
The workers of these sectors are not protected by labour laws
The workers of these sectors are called as formal sector workers
2. Informal sector workers
It refers to the unorganized sector of the economy.
It includes all such private establishments who hires less than 10 workers.
The workers of these sectors does not entitled to any social security benefits.
The workers of these sectors are not protected by labour laws.
It provides employment to more than 90% of workforce.
Informalization refers to a situation when people tends to find employment more in informal sector of the economy and less in formal sector of the economy It generally happens as informal sector requires fewer amounts of qualifications and formalities to get the job.
Unemployment
It refers to a condition of unemployment in which all those who are willing and ablework at the existin wage rate doesn’t get work.
Types of unemployment
Disguised unemployment or hidden unemployment
It refers to a situation wherein the number of workers engaged in a job is much morethan the number of people actually required to do the same amount of job. i.e. even ifsome people are withdrawn from the job, the total product doesn’t fall.Example – 4 persons are required to do the job of cultivation but there are 9 personswho are performing the same job. It means that the productivity of extra 5 units oflabour is zero.
• Frictional unemployment (temporary unemployment)
It refers to the unemployment which exist during the period when workers leave onejob and join the other. when people are moving or changing occupations
Seasonal unemployment
It refers to a situation in which people are unemployed during few months (off season)of a year due to their seasonal work. In other words, it is a type of unemployment which occurs at certain seasons of theyear
Example-industries where demand, production and employment are seasonal suchas tourism and leisure, farming, etc
Open unemployment or involuntary unemployment
It refers to a condition of unemployment in which all those who are willing and able towork at the existing wage rate doesn’t get work. It is called open unemployment because it can be seen and counted in terms of numbers to find the number of unemployed person in a country
Structural unemployment
It refers to the type of unemployment which is caused by a mismatch between the skills that workers in the economy can offer and the skills demanded by the employers. It is often brought by technology up gradation that makes a job skill of many worker obsolete.
Cyclical unemployment
It refers to the type of unemployment which arises to business cycle fluctuations, i.e. normal ups and downs of the economy.
When the economy is at boom period the cyclical unemployment is minimum whereas at the time of recession it is maximum.
Educated unemployment
It refers to a situation when an educated person doesn’t have the right job for himself because of lack of employment opportunities in an economy, also their qualification doesn’t match with the job.
Faulty education system, lack of employable skills, preference of white collar jobs are some of the reasons responsible for this unemployment.
Causes of unemployment
1. Slow rate of economic growth
The rate of economic growth in India is very low due to which the economy is unable to generate adequate amount of employment opportunity for the people of the economy. Moreover the rate of labour force is much higher than the rate of employment opportunities.
2. Population explosion
The constantly rise is population is one of main reason of unemployment in India India is treated to be a workforce country, where majority of population comes under workforce, due to this even after implementing various policies and plans the rate of unemployment tends to rise
3. Defective educational system
The education system of the economy is around 100 years old, due to continuous change in the economic activities the system doesn’t fit the present scenario. The education system in India is degree oriented and not job oriented, due to this the educational unemployment increases
4. Faulty planning
The economic planning of our country is not primarily designed for employment generation. Five years plans are not efficient enough to absorb the increasing rate of unemployment from the country. Moreover the plans could not be able to stop the migration of rural population to urban areas
5. Excessive use of foreign technology
India is considered to be a Labour intensive country, where the amount of available labour force is exceptionally high. Such country should adopt labour intensive technique of production so that it can give employment opportunities to maximum number of people but due to excessive use of foreign technology, capital intensive technique of production is promoted which substitute capital for labour
6. Underdeveloped agriculture
The agriculture sector in India is underdeveloped and it provides only seasonal employment. The majority of people of the country rely on agriculture for employment but the seasonal nature of agriculture does not provide a stable job to the farmers for the complete year
7. Decline of cottage and small industry
After independence the number of small industries has declined due to change in the pattern of demand and preferences of general public. Emergence of large industries with latest modern technology and capital intensive technique of production has reduces the employment opportunities in the economy and hence results in unemployment.
8. Low capital formation
9. Increase in labour force
Remedial measures for unemployment
1. Accelerating growth rate of GDP
In order to achieve the state of full employment growth rate of the economy must rise. The growth rate of the economy must rise by 3-4% (5.6% -9%) in the coming years to absorb the increasing unemployment
2. Control over population
The rate of population growth of the country should be decreased so that the additional job opportunities don’t fall short off for the large number of existing workforce
Programs like single child norm, family planning should be introduced.
3. Encouragement of small scale industries
In order to reduce the problem of unemployment small scale and cottage industries must be encouraged by the government in several ways such as tax Subsidized rate for raw materials etc. as it promotes labour intensive technique of production which increases employment opportunities
4. Change in educational system
The education system of the economy must be reformed. A new model based on work and skill development must be included along with the vocational studies More emphases should be given on training and development of an individual rather than degree oriented education
5. Encouragement of self-employment
Government must provide various facilities to the public to generate more self employment. It includes facilities like marketing, technical training, easy credit etc.
Increase in the amount of self employment reduces the burden of providing employment from the government.
6. Change in technique of production
Basically there exist 2 types of techniques of production
1. Labour intensive technique (more labour and less machines)
2. Capital intensive technique (more capital and less labour) India is a labour oriented country, it is essential that labour intensive technique must be encouraged by the government in place of capital intensive in order to provide more employment opportunities.
In case of urban workers 42% regular celebrates 43% of self employee in 15% casual wage labour respective figures for rural areas 9% 56% and 35%.
Distribution on the basis of gender
• In case of male 29 % are casual labourers 20% are regular salaried employee and 51% self employed
• Respected figures for female workers are 31%, 13% and 56%.
Distribution of workforce on the basis of industry.
• Primary factors that is agriculture mining and quarrying involves 48.9 percentage of workforce.
• Secondary sectors manufacturing electricity gas and water involve 23% of workforce.
• Service Sector ie transport and storage employee 26. 8% of workforce
Explanation to chart showing growth of employment and GDP
• 60 years of planned development have been aimed at expansion of economy through increase in national income and employment.
• During the period 1950 to 2010 GDP always grew positively and was always higher than employment growth.
• During this period employment grew not more than 2% however in late 90’s employment growth started declining and reached where it was at the early stage of planning.
• During the years we find a widening gap between growth of GDP and employment this trend is known as jobless growth jobless growth is a situation when economy is able to produce more goods n services without proportionate increase in employment.
Change in employment pattern from 1972-73 to 2010-11
• In primary sector 74.3 percent of workers were engaged and now they are having 48.9 percent of workforce
• Secondary sector the figures were 10.9% to 24.3 %
• In tertiary sectors the figures change from 14.8% to 26.8 %
❖ 61..4% employees was self employee in 1972-73 now 52% are self employed.
❖ Regular salaried workers 15.4 percent now they are 18%
❖ Casual wage labour were 23.2% now It employe 30% of workforce.
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There exist a huge disparity between formal sector and informal sector
❖ Formal sector engage 24 million male worker and 6 million female workers
❖ Informal sector engage 310 million male worker and 133 million female worker