This GSEB Class 12 Economics Notes Chapter 6 Unemployment covers all the important topics and concepts as mentioned in the chapter.
Unemployment Class 12 GSEB Notes
Meaning of Unemployment:
- Unemployment: A person is ready and capable of working at current wage rate but does not get works is considered unemployed. A situation of such unemployed persons in the society is called unemployment.
- According to Prof. Pigou: A person can be called unemployed only when he is willing to work but is not able to find work.
- Unwilling Unemployment or Compulsory Nature of Unemployment: A person is eager and ready to work at current wage rate but is deprived of work then he is said to be unwillingly unemployed and such situation is called unwilling unemployment.
- Voluntary Unemployment: A person is not willing and ready to work at current wage rate and he is not getting work then he is said to be voluntarily unemployed and such situation is called voluntary unemployment.
The term unemployment is understood in terms of supply of active labour force.
- Active labour force includes people in the age group of 15 to 64 years.
- Unemployment is not only an economic problem but it can create social, ethical and political problems.
Types of Unemployment:
Unemployment of Developed Countries: In developed countries lack of effective demand for short-term resulted from trade cycle creates
- Cyclical unemployment and
- Frictional unemployments
Unemployment of Developing Countries: Unemployment of developing country like India is structural in nature and for long-term.
Measures for Types of Unemployment:
Shri Raj Krishna Committee Report 2011-12 has given four measures to know the nature and types of unemployment as follows:
- Time: Getting work for less than 28 hours a week is said to be intensively unemployed, whereas getting work for more than 28 hours and less than 42 hours a weak is considered as less intense unemployed.
- Income: A person getting very less income which cannot solve his poverty is poor from income point of view.
- Willingness: A person does not get job as per his eligibility and gets very less income from the job then he is underemployed.
- Productivity: When a labourer is working with less than his actual efficiency then production is less than that of his productive capacity.
The persons who are ready to work at current wage rate and posses qualification too, but do not get any job are said to be ‘fully unemployed’ or ‘openly unemployed’. Such situation of unemployment is called open unemployment.
- People suffering from open unemployment are educated or less trained / skilled persons.
- Open employment can be seen more among the age group 15 to 25 years.
When labourers cannot utilize their capabilities fully and for certain period accept less capable job are said to be underemployed. Such situation is called underemployment.
- Underemployment is seasonal in nature.
- The persons do not get jobs according to their degrees and accept degraded job are also said to be underemployed.
- In any activity if too many persons are employed at the giyen level of technology and when a few persons – are removed from the work even though the total production does not change then there exists disguised unemployment.
- Disguised unemployment has zero marginal productivity.
The unemployment | arised due to the cycle of boost and recession in the economy is called cyclical unemployment. It is also known as depressive unemployment or trade cycle unemployment.
- Unemployment arised due to change in taste and preferences or new technology is called frictional unemployment.
- Frictional unemployment is for a short-term.
Causes of Unemployment:
India faces extensive unemployment due to following causes:
1. High rate of population growth: Because of high growth rate of population labour supply increases rapidly but there is a slow rise in employment opportunity which increases the problem of unemployment and underemployment.
2. Slow rise in employment opportunities: During planning period there was continuous increase in economic growth but failed in creating employment opportunities which increased unemployment.
3. Low rate of savings and investments: During planning period national income has increased but due to high population growth per capita income increased at a lower rate that could not satisfy the basic needs of population. As a result savings and investments remain low. Because of low rate; investment in agriculture, industries, etc. much employments cannot be created and the problem of unemployment has been increased.
4. Capital intensive production technique: In planning schemes India has adopted intensive technique and labour intensive technique was given less importance. In agriculture and industries mechanisation was adopted which increased employment at slow rate. As a result unemployment problem has become acute.
5. Lack of vocational education: Present education system is lacking vocational education. Hence skilled labourers are few. Hence more unemployment is seen,
6. Lack of manpower planning: In India during planning period education has been made a widespread activity without estimation of kind and number of labour requirement. As a result educated youth remains unemployed.
7. Inefficiency of public sector: The quantity of employment generation estimated from public sector was not able to generate more employment because of its low productivity.
8. Negligence towards agriculture sector: In India’s economic development policy, more emphasis is given to other sectors than agriculture. So agriculture sector failed to generate more employment and unemployment increased.
9. Low mobility of workers: In India, due to social reasons, family relations, language, religion, casteism, culture and structural reasons mobilisation of workers is restrained. Also due to attraction towards urban life and urban facilities workers do not prefer to live in villages for employment. This causes increase in unemployment.
10. Lack of infrastructural facilities: In rural areas because of lack of infrastructural facilities, new industries are not established, as a result new employment cannot arise and unemployment exist.
11. Other causes: In India lack of national employment policy, lack of conducive environment for development of industries and trade, under-utilization of natural resources are also responsible causes for increase in unemployment.
Measures to reduce Unemployment:
To solve the problem of unemployment following measures can be taken:
1. Population control: In India by taking effective steps for population control, rate of population growth can be reduced. So the labour supply will reduce and factors of production will remain surplus which will increase the rate of investment and employment opportunities can be increased.
2. Increase in the rate of economic development: In the economy of a country by co-ordinating various sectors of economy, efforts should be made to increase capital investment between public, private and co-operative sectors. In agriculture sector irrigational and other facilities should be increased to keep the agricultural growth rate high. Thus, if the rate of economic development is being increased continuously, the problem of unemployment could be solved.
3. Employment oriented planning: With the establishment and development of employment oriented industries, the production of consumer goods will increase and employment will increase. In construction sector through employment oriented planning more employment can be generated. By using labour intensive production technique unemployment problem can be solved.
4. Employment oriented education: Present education system is responsible for unemployment. So it is necessary to give vocational education in the field of trade, commerce, business, agriculture and other fields. After getting such education it is easy to get employment.
5. Development of cottage and small- scale industries: As compared to large industries, cottage and small-scale industries have capacity to create employment with a low investment. So the development of cottage and small-scale industries should be accepted as the best alternative in the industrial policy. This will reduce the problem of unemployment.
6. Extension of infrastructural facilities: With the development of infrastructural facilities in rural areas, employment opportunities will generate in agriculture and allied sectors. This will reduce the unemployment.
7. Speed and expansion of green revolution in agricultural sector: To solve the problem of unemployment in rural areas, green revolution should be speed up and effort should be made to extend it to more area. This can increase the opportunities of employment.
State Programmes to solve Unemployment problem:
From the fifth five year plan various employment oriented schemes were started.
- Integrated Rural Development Programme,
- Food against work,
- Jawahar Rojgar Yojana,
- Suvarnajayanti Gram Swarojgar Yojana,
- Suvarnajayanti Shaher Rojgar Yojana,
- Training to Rural Youth for Self-employment,
- Mahatma Gandhi National Rural Employment Guarantee Act – MGNREGA and
- Skill Development Programmes like, Skill India, Make in India and MUDRA.
1. Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA):
- National Rural Employment Guarantee Act (NREGA) started in February, 2006 was changed to MGNREGA on 2nd October, 2009.
- Objective of this Act is to provide employment to rural people residing in backward districts of country. ’
2. Pandit Deendayal Upadhyay Shramev Jayate Yojana (PDUSJY):
- This Yojana was started on 16th October, 2014.
- The main objectives of this yojana were to provide health and security along with good management, skill development and welfare to the labourers of unorganised sector and to develop conducive environment for industrial development.
3. Deendayal Upadhyay Gram Jyoti Yojana (DUGJY):
This yojana is started with an objective of providing constant 24 × 7 electricity services in rural areas.
4. Deendayal Upadhyay Gramin Kaushalya Yojana (DUGKY):
To provide employment to youth between age group of 18 to 35 years was started on 25th September, 2014.
5. Prime Minister Agricultural Irrigation Programme:
With an objective ‘water to every field’ this programme was started on 1st July, 2015. Under this programme to increase agriculture productivity it is planned, optimum use of available resources and irrigation facilities.