EMPLOYMENT: GROWTH , INFORMALISATION AND OTHER ISSUES - CLASS 12 ECONOMICS - @educationforfree

EMPLOYMENT : GROWTH, INFORMALISATION AND OTHER ISSUES - CLASS 12 ECONOMICS 

• WORKER:  refer to those who are  involved in the  production activity  and  contribute  to the generation of  GDP. 

 TYPES OF WORKERS 

1  SELF EMPLOYED

Self  employed  workers  are  those who are  engaged  in their own  business or  own profession, for  example, a  farmer working  on his  own field.

2. REGULAR 

 Regular workers  are  permanently  em

ployed workers by  the employers.  They  get social security  benefits, for  example, an engineer working  in a  construction company.    

HIRED WORKERS 

Hired workers  are  those  who work for  others by  means of rendering  services to others and getting  paid in return, for  example, a  teacher working  in a school.  

4. CASUAL WORKERS

  

Casual workers  are  those who work on daily  wages.  They  are  not hired by  their  employers on regular  basis.

WHAT IS LABOUR SUPPLY?

 Labour supply  (supply  of  labour  corresponding  to different wage  rates) is the amount  of labour  that the workers are  willing  to offer  corresponding  to a particular wage  rate. 

WHAT IS LABOUR FORCE?

 Labour force  refers to the number of  workers  actually  working  or willing  to work  at a particular wage  rate.

WHAT IS WORK FORCE?

 Work force  refers to those  who are  actually  working  and does not  include  those who are willing  to work.   

WORK POPULATION RATIO 

  Worker Population  Ratio  is defined as the proportion of population that is  actively contributing  to the  production of  goods  and services.   Worker-Population  Ratio  =  Total  Workforce /Total  Population × 100 

WHAT IS JOBLESS ECONOMIC GROWTH?

Jobless economic  growth  refers to a  situation when the level of output  in the  economy  rises (due  to technological improvement)  without  proportionate rise in the  employment opportunities.  This is because  the technological improvement substitutes labour for machines.  Therefore, unemployment continues to  exist, even when there  is  a  rise in GDP.

WHAT IS FORMAL SECTOR? 

Formal sector  (organised sector of  the  economy)  includes all the  government departments, public  enterprises  and private enterprises that hire  10 or  more  workers.  

 INFORMAL SECTOR

 Informal sector  (unorganised sector of  the  economy) includes  all  private enterprises that hire  less than 10 workers, besides farming  and self-employment ventures. 

 •A situation of  decline  in the  percentage  of workforce  in the  formal sector  along  with simultaneous rise  in informal sector’s workforce  is  known as  Informalisation  of Workforce. 

• When the percentage  of  casually  hired workers in the total work force  tends  to rise overtime with simultaneous decline  in the self employment  and regular salaried workforce, then such a  situation is  referred to as  Casualisation  of  Workforce. 

WHAT IN UNEMPLOYMENT

 An individual who is  ready  and  willing  to work at  existing  wage  rate  but does not get work is considered as  unemployed.

 Types  of  Unemployment 

•Disguised Unemployment-  The  kind of unemployment that arises when the  number of  workers engaged is more  than what is actually  required in a job is  called  disguised unemployment.  For  example, if a  piece  of land can be  cultivated by  five  people efficiently, but eight people are  engaged, then three  people  are  disguisedly unemployed.

 • Seasonal Unemployment-  The  kind of unemployment that arises  when people are not able  to find jobs during  some  months of the  year is called seasonal unemployment.  For  example, farmers  are  seasonally  unemployed  for  few  months before  harvesting  crops.

 CAUSES OF UNEMPLOYMENT

1.  Slow Economic  Growth  failed to generate newer  employment opportunities for  the growing  population. 

2. Population  is  rising  at a  much higher rate  than the  rate of  increase  in the employment opportunities.

 3. Farmers remain unemployed  for  three  to four  months in a  year as  agriculture  is a seasonal occupation. 

4 Neglecting small  scale  industries  has made  a  significant proportion of  population unemployed.  Also the  stiff competition from large  firms and lack of  easy  and cheap credit  facilities made  the  cottage  and small  firms  more  vulnerable. 

5.   Lack of  infrastructure  impedes the  growth of the  industries that in turn obstructs employment  generation. 

6.  Due to staunch beliefs in the  traditional and  cultural values, the decisions regarding  females taking  up jobs  are  still  governed  by  her family  members  (a  major cause of low  female  participation in workforce).   

7.  Lack of investments in education and health sectors leads to lack of  quality human capital,  thereby  increasing  their  probability  of being  unemployed.    

 8. Ineffective  planning and  information  catering  system  has further made  it  difficult to disseminate  information regarding  various employment  generation schemes and plans and consequently  people lack  awareness.   

 ECONOMIC CONSEQUENCES OF UNEMPLOYMENT: 

1.Underutilisation  of  Human  Capital-  Country  fails to utilise its  human resources optimally  due  to high unemployment rates.

2.The rate of  capital formation  declines  due  to the  inability  of rising  unemployed population to save  and invest. 

3.  Due to high unemployment rate the  aggregate  output  for  the economy  will  also be low.

 4.  Reduces  Productivity-  Per capita  productivity  remains low due  to widespread unemployment, poverty  and inferior  quality  of human capital. 

STEPS TO SOLVE PROBLEM OF UNEMPLOYMENT

1.Steps to increase productivity levels  lead to  higher profits that in turn results in higher investment and  generates higher demand  for labour.   

2. Providing assistance  to self  employed persons-  Government should provide facilities like  credit, better seeds and irrigation to small and marginal farmers.    

3. Controlling population-  People should be made  aware  of various birth control measures and  also the  benefits associated with family  planning  and nuclear-family.

4.  Development of  infrastructure  such  as dams, bridges,  canal,  roads, etc.

 5.Increase in  investments  in  developing  human  capital-  technical education, imparting  skills, on-the-job training, quality  medical facilities, etc.

 6. Policy re-formulation and special plans focusing  on the  development of  the  small scale and  cottage  industries  such  as easy  and  cheap credit  facility.

7.  Encouraging  private  investments in  industrial  sector  via  financial concessions such tax  holidays,  etc. 

8. Increasing production  in the  agricultural  and industrial sectors in order to  increase employment opportunities.  

9. Use of  labour  intensive technique  rather  than an  undue  reliance  on capital intensive techniques of  production. 

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Note: The work is collected from various sources and author does not claim over work.