Disguised unemployment exists where part of the labour force is either left without work or is working in a redundant manner where worker productivity is essentially zero.
Du: This is type of unemployment unusually found in overpopulated underdeveloped countries, and more particularly in agricultural sector. Due to use of family labour in agriculture (which is not paid wages in the usual sense), sometimes the number of persons working on land may be far in excess of those who are really required to produce the given volume of output.Common in agriculture sector in our country
Mental stress, loss of self esteem, directly linked to poverty and malnutritionCivil unrest, law and order egnaxalitesthefts, trade barriers/protectionism in case of high unemployment, for immigrantsWhen unemployment is high, consumer spending is low and economic growth is slow. This can lead to a recession. During times of low unemployment, consumer spending is high and the economy is growing at a rapid pace, which often leads to inflation. When the economy grows too quickly, it can lead to a sudden and rapid downturn. To avoid these situations the Federal Open Market Committee or FOMC, a branch of the Federal Reserve, adjusts the federal funds interest rate.
Unemployment as defined by the ILO :It occurs when people are without jobs andthey have actively looked for work withinthe past four weeks.Unemployment (or joblessness)occurs when people are without workand actively seeking work
The incidence of unemployment is much higher in urbanareas than in rural areas. Unemployment rates for women are higher than those formen. The incidence of unemployment among the educated ismuch higher than the overall unemployment. There is greater unemployment in agricultural sector thanin industrial and other major sectors.
Voluntary : In this type of unemployment aperson is out of job because of his own desire tonot work on the prevalent or prescribed wages. Involuntary : A person is separated fromremunerative work and devoid of wages althoughhe is capable of earning his wages and is alsoanxious to earn them.
Cyclic Unemployment Part of the capitalist system and a result of trade cycle. There is greater unemployment and when there is recession, a largenumber of people are rendered unemployed Disguised Unemployment Unemployment that does not affect aggregate output. Common in overpopulated countries Low/zero marginal productivity of labour Underemployment due to underdevelopment Sudden Unemployment Prevalent in industries. Trades and business where people are employed for ajob and suddenly when the job has ended or due to some changes they areasked to go.
Structural unemploymentOccurs when labour market is unable toprovide jobs for everyone who wants onebecause there is a mismatch between theskills of the unemployed workers and theskills needed for theavailable jobs•Technological unemploymentIt occurs due to replacement of labour dueto new trends in technology.
Seasonal unemploymentCertain industries and traders engageworkers for a particular season.When the season has ended the workers arerendered unemployed. Frictional unemploymentIt is the time period between jobs when aworker is searching for, or transitioningfrom one job to another.
Help Avert Inflation - excess labourers,keep wages in check Generally increases existinglabourers productivity
On IndividualMental stress,loss of self esteemDirectly linked to poverty andmalnutrition On Society Civil unrest, law and order e.g.Naxalites, thefts. trade barriers/protectionism incase of high unemployment, for immigrants
Effects of unemployment on EconomyWhen unemployment is high, consumer spendingis low and economic growth is slow. This can leadto a recession. During times of lowunemployment, consumer spending is high andthe economy is growing at a rapid pace, whichoften leads to inflation. Effects of unemployment on BankingIf there is high unemployment people mightwithdraw the deposits which reduces the moneysupply of the bank. Also there is an increased riskthat people who have taken loan will default . Inshort high unemployment will lead to lowrevenues.
Primarily two main issues.. How to provide employment to the new entrants?? How to improve quality of employment??
For issue 1. Economic growth and employment growth are correlated. MoreGDP growth more the employment opportunities. Government planned initiatives i.e. five year plan focuses onemployment generation targets. Some initiatives are MGNREGA, PMEGP, SJSRY, SGSY. For issue 2 Provide skill training to the new entrants to the labour force. Improving skill level of existing work force. Formal and informal skill level of training.
A Change in the pattern of investment. Encouragement to small enterprises as against bigenterprises. Problem of Choice of technology. Encouragement of New Growth Centers in SmallTowns and Rural Areas. Subsidies on the Basis of Employment. Reorientation of Educational Policy.