EMPLOYMENT Economic Definition of Work Definition of employment Employment ratio in India Employment Structure in India Types of employment in India Employment Problems in India UNEMPLOYMENT Unemployment Types of Unemployment in India Policies to increase employment opportunities in India References

1. EMPLOYMENT AND
UNEMPLOYMENT
★ UNDER THE GUIDANCE OF
ANUSHREE KINI MA’AM

2. ➢ INDEX
1. EMPLOYMENT
1.1. Economic Definition of Work
1.2. Definition of employment
1.3. Employment ratio in India
1.4. Employment Structure in India
1.5. Types of employment in India
1.6. Employment Problems in India
2. UNEMPLOYMENT
2.1. Unemployment
2.2. Types of Unemployment in India
3. Policies to increase employment opportunities in India
4. References

3. EMPLOYMENT
To understand the concept of employment, let us first understand the relevance of ‘work’.
Work helps us to earn a living. But more importantly, work gives us a sense of worth to be able
to do something and lends meaning to our being. It is our way of contributing to the national
income of the country.
By that definition, a ‘worker’ is one who is bound by a contractual agreement or one who gets
rewards from working or is self-employed. There can be different types of workers defined on
the basis of certain parameters.
★ Economic Definition of Work:

4. ➢ Definition of employment :
It refers to a situation when a person is able to earn his livelihood either through self
employment or by working as wage-employment. It is a relationship between two parties,
usually based on contract where work is paid for, where one party, which may be a
corporation, for profit, non-profit organization, co-operative or other entity is the
employer and the other is employee. Employee works in return for payment, which may
be in the form of an hourly wage, by piecework or annual salary.

5. ➢ Employment ratio in India:
In terms of proportion, 68.4% of the workers are males and 31.6% females. Main workers
constitute 77.8% of the total workers. The remaining are marginal workers. Among the main
workers, female workers, are only 23.3% and 76.7% are male workers.
Majority of female workers (87.3%) are from rural areas.

6. ➢ Employment Structure in India
❏ The nature of employment in India is multi-dimensional. Some get
employment throughout the year; some others get employed for
only a few months in a year.
❏ The structure of employment denotes the number of workers
engaged in different sectors of the economy
The economy is classified into three sectors :-
★ Primary or agriculture sector,
★ Secondary or industrial sector and
★ Tertiary or service sector.

7. ➢ SECTORS

8. ➢ Types of Employment :
❖ Employment in developing countries like India is quite different.
The main cause of unemployment and underemployment prevailing
in developing countries such as India is the deficiency of the stock
of physical capital with which to employ the growing labour force.
Due to the lack of physical capital, it has not been possible to
absorb the growing labour force in productive employment.
➔ Though the occupational pattern varies from one country to another,
one can find in developing countries like India that a large workforce will
be engaged in primary sector, while a small proportion in secondary and
tertiary sectors. Whereas, in well-developed countries, the proportion of
workforce engaged in agriculture will be very small and a majority of
labour force will be in the industrial and tertiary sectors. Employment
has always featured as an important element of development policy in
India.

9. TYPES
❖ Full-time and part-time employees :
★ Full-time employees work on a regular basis for an average of
38 hours per week. An employee’s actual hours of work are
agreed between the employer and the employee, and/ or are
set by an award or registered agreement.
★ Full-time employees are entitled to the following leave:
➔ Annual, personal, sick, and carers;
➔ Bereavement or compassionate;
➔ Parental;
➔ Long service ;
★ They are also entitled to public holiday pay if the holiday falls on a day they would
usually work.
★ Part-time employees usually work less than 38 hours per week and generally
have regular hours. They receive the same wages and conditions as full-time
employees on a proportionate or pro-rata basis, according to the hours they
work.

10. ❖ Casual employees :
Casual employees are engaged on an irregular basis according to business demands
and have:
● No expectation of ongoing work; no obligation to accept offers of work;
● A loading paid on top of their hourly rate of pay;
● No sick or annual leave pay;
● No obligation to provide notice of ending their employment, unless this is a
requirement of an award, employment contract or registered agreement.
In some circumstances, casual employees may be eligible for long service leave
and parental leave after being employed for 12 months.

11. ❖ Fixed term and contract employees
➢ You can employ someone on a fixed term or contract basis for an agreed
length of time or to perform a specific task; to work on a particular project or
to replace an employee on leave.
For example:-
Fixed term employees can work full or part-time and are entitled to the same
leave entitlements as permanent staff but on a pro-rata basis, depending on
the length of employment

12. ❖ Apprentices and trainees :
Apprentices and trainees may be suitable for your business. They are working towards a
nationally recognised qualification and must be formally registered, usually through a contract
between a registered training provider, the employee and you.
You must pay apprentices and trainees according to their award or registered agreement.
❖ Commission and piece rate employees :
You can pay piece rates or commission payments to employees in certain circumstances.
This means that you pay them based on the results they achieve instead an hourly or
weekly pay rate. You may employ people in this arrangement if :
● Their award or agreement allows for it.
● They are award and agreement free.

13. In 2020, there were around 501 million workers in India, the second largest after China. Out of which,
agriculture industry consist of 41.19%, industry sector consist of 26.18% and service sector consist 32.33%
of total labour force. Of these over 94% work in unincorporated, unorganised enterprises ranging from
pushcart vendors to home-based diamond and gem polishing operations. The organised sector includes
workers employed by the government, state-owned enterprises and private sector enterprises. In 2008,
the organised sector employed 27.5 million workers, of which 17.3 million worked for government or
government owned entities.

14. ➢ Employment Problems in India :
India is one of the most populated countries in the world.
Ranking second with respect to population in the world.
64% population of the total population in India is working.
There are many youths in the country who are not getting the work and to be precise the
eligible work.
The first main problem India facing is of overpopulation. The excess of population is actually
affecting the employment in India. The opportunities are less as compared to the number of
employees. Thus, many people remain unemployed. There is lots of unawareness amongst the
people. The literacy rate is currently increasing, but the opportunities are not increasing
accordingly. The overpopulation is followed by the financial crisis, thus many people lost their
jobs. When the portion of working population remains jobless then gradually the income of the
country goes down, i.e. when per capita income goes down eventually it affects the GDP of the
country. Employment problem is a serious problem and it should be solved by creating
opportunities.

15. Unemployment
Unemployment is a situation when a person actively searches for a job and is unable to find
work. Unemployment indicates the health of the economy.
The unemployment rate is the most frequent measure of unemployment. The unemployment
rate is the number of people unemployed divided by the working population or people working
under labour force.
Unemployment rate = (Unemployed Workers / Total labour force) × 100
National Sample Survey Organization (NSSO) defines employment and unemployment on the
following activity statuses of an individual

16. ➢ Types of unemployment in India
In India, there are six types of unemployment. The types of unemployment are discussed below :
1. Disguised Unemployment:
The situation of underemployment is referred to the situation when people are
apparently working but all of them are made to work less than their potential is called
disguised unemployment. In this case, the person considers himself employed but is
actually not working
In rural areas, where agriculture is the main source of income, this kind of
unemployment can be seen often. If a piece of land requires only three people to work
on it and instead five people are working on it, then the two extra people are said to be
in a situation of disguised unemployment.
In cities and urban areas, disguised unemployment is seen when painters, plumbers,
electricians are unable to find work on a daily basis and work way less than their
potential.

17. 2. Structural Unemployment:
This unemployment arises when there is a mismatch between the worker’s skills and
availability of jobs in the market. Many people in India do not get job matching to their
skills or due to lack of required skills they do not get jobs and because of poor education
level, it becomes important to provide them related training.
When people lose their jobs due to advancement in technologies they tend to work in
different field as they don’t have any choice.
3. Seasonal Unemployment:
That situation of unemployment when people do not have work during certain seasons of
the year such as labourers in India rarely have occupation throughout the year
In the agricultural sector where the demand for workers is more during harvesting than is
required in other months in a year.
Locals living in places like uttarakhand , Sikkim , jammu Kashmir get jobs only in few
seasons as tourists come for only few particular months.

18. 4.Vulnerable Unemployment:
People are deemed unemployed under this unemployment. People are employed but informally
i.e. without proper job contracts and thus records of their work are never maintained. This type
of unemployment is most common in India.
5.Cyclical Unemployment :
Cyclical unemployment is a type of unemployment where labor forces are reduced as a
result of business cycles or fluctuations in the economy, such as recessions (periods of
economic decline). When the economy is at its peak or experiences continuous growth,
the rate of cyclical unemployment is low. During the period, sales and income increase;
therefore, more people are needed to meet the demand.
On the other hand, during a recession, the rate of cyclical or involuntary unemployment is
high, due to the decline in consumer demand for goods and services. In other words,
there is a decrease in production; therefore, fewer workers are needed, resulting in job
layoffs. The number of unemployed workers exceeds the number of job vacancies in the
labor market.
automobile worker is laid off during a recession to cut labor costs. During the downturn,
people are buying fewer vehicles, so the manufacturer doesn’t need as many workers to
meet the demand.

19. 6.Frictional Unemployment:
This is a situation when people are unemployed for a short span of time while searching
for a new job or switching between jobs. Frictional Unemployment also called Search
Unemployment, is the time lag between the jobs. Frictional unemployment is considered
as voluntary unemployment because the reason for unemployment is not a shortage of
jobs, but in fact, the workers themselves quit their jobs in search of better opportunities.
Worker is employed in a steady job as a software engineer. He however feels that he has
developed enough skill sets to obtain a job as a software team leader. He is therefore on
the lookout for another job. However, at the moment he has quit his job and is focusing
solely on finding a new job. Therefore, technically, at the moment, he is unemployed.

20. ➢ Policies to increase employment
opportunities in India:
1. Industrial Employment (Standing orders) Act of 1946
This Act requires employers in industrial establishments to define and post the conditions of
employment by issuing so-called standing orders. These standing orders must be approved
by the government and duly certified. These orders aim to remove flexibility from the
employer in terms of job, hours, timing, leave grant, productivity measures and other
matters. The standing orders mandate that the employer classify its employees, state the
shifts, payment of wages, rules for vacation, rules for sick leave, holidays, rules for
termination amongst others.

21. 2. Payment of Wages Act of 1936
The Payment of Wages Act regulates by when wages shall be distributed to employees by
the employers. The law also provides the tax withholdings the employer must deduct and pay
to the central or state government before distributing the wages.
3. Employees Provident Fund and Miscellaneous
Provisions Act of 1952
This Act seeks to ensure the financial security of the employees in an establishment by
providing for a system of compulsory savings. The Act provides for establishments of a
contributory Provident Fund in which employees' contribution shall be at least equal to the
contribution payable by the employer. Minimum contribution by the employees shall be 10-
12% of the wages. This amount is payable to the employee after retirement and could also be
withdrawn partly for certain specified purposes.

22. 4. Payment of Bonus Act of 1965
This Act, applies to an enterprise employing 20 or more persons. The Act requires employer
to pay a bonus to persons on the basis of profits or on the basis of production or productivity.
The Act was modified to require companies to pay a minimum bonus, even if the employer
suffers losses during the accounting year. This minimum is currently 8.33% of the salary.
5. Minimum Wages Act of 1948
The Minimum Wages Act prescribes minimum wages in all enterprises, and in some cases those
working at home per the schedule of the Act. Central and State Governments can and do revise
minimum wages at their discretion. The minimum wage is further classified by nature of work,
location and numerous other factors at the discretion of the government. The minimum wage ranges
between ₹143 to ₹1120 per day for work in the so-called central sphere. State governments have
their own minimum wage schedules .

23. ➢ References
★ Wikipedia
★ www.ceicdata.com
★ fred.stlouisfed.org
★ statista.com
★ corporatefinanceinstitute.com
★ byjus.com
★ censusindia.gov.in
★ Google Images

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