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. Unemployment may be defined as “a situation in which the person is capable of working both physically and mentally at the existing wage rate, but does not get a job to work.”
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 Organisation (NSSO) defines employment and unemployment on the following activity statuses of an individual. NSSO, an organisation under the MoSPI – Ministry of Statistics and Programme Implementation, measures India’s unemployment on three approaches:
1. Daily Status Approach: The unemployment status of a person under this approach is measured for each day in a reference week. A person having no gainful work, even for one hour in a day, is described as unemployed for that day.
2. Weekly Status Approach: This approach highlights the record of those persons who did not have gainful work or were unemployed even for an hour on any day of the week preceding the date of the survey.
3. Usual Status Approach: This gives the estimates of those persons who were unemployed or had no gainful work for a significant time during the 365 days.
NATURE OF THE PROBLEM OF UNEMPLOYMENT IN INDIAN SOCIETY
The nature of unemployment in India is characterised by a complex interplay of factors contributing to unemployment in India:
1. Demographic Shifts: India has a large youth population entering the job market each year, which challenges the economy’s ability to create sufficient employment opportunities.
2. Rapid Urbanisation: Increased urbanisation leads to migration from rural to urban areas, often resulting in job scarcity and infrastructure strain in cities.
3. Technological Advancements: Automation and new technologies replace traditional jobs, creating a demand for new skills that many workers may not possess.
4. Inadequate Skill Development: There is a significant mismatch between the education provided and the skills demanded by the job market, along with varying quality of education across regions.
5. Disparities in Regional Development: Economic growth and job opportunities are unevenly distributed across the country, with rural areas and some states lagging behind.
6. Economic Policies and Labour Laws: Rigid labour laws and inadequate policy implementation hinder job creation and economic adaptability.
Understanding the nuances of unemployment in India is crucial for policymakers and stakeholders seeking to devise effective strategies aimed at fostering inclusive growth and mitigating socio-economic disparities.
FEATURES OF THE PROBLEM OF UNEMPLOYMENT IN INDIAN SOCIETY
Urban Unemployment Scenario, in addition to the residents of urban areas, many people migrate to urban areas in search of jobs. Thus, the unemployment situation in urban areas is severe. Urban unemployment has three prominent features:
1. There are thousands of educated youths who are unemployed. This could be because of the flaws in our education system. In many cases, the current education system does not impart requisite skills required by industrial and services sectors.
2. There is under-employment in society in the sense that people do not get work for all days. Available jobs in the industrial and services sector are not regular.
3. Further, jobs available are not according to the merit or qualifications of job seekers. Many persons, therefore, are underpaid.
UNEMPLOYMENT PROBLEM
Urban unemployment poses a significant challenge to economic and social stability in many regions, particularly in underdeveloped and developing countries. The problem manifests in various forms, including open unemployment, underemployment, and disguised unemployment. Below are some critical aspects and issues related to urban unemployment, with a particular focus on the situation in India as discussed in Wilfred Malenbaum’s “Urban Unemployment in India” (1957).
1. Economic Implications: Unemployment in urban areas leads to the under-utilisation of labour, a crucial factor of production. This under-utilisation results in economic waste, as the potential output of a substantial portion of the labour force remains unrealised. For countries striving for economic development, such as India during its Five-Year Plans, the growing number of unemployed individuals exacerbates the difficulty of achieving planned economic targets.
2. Political and Social Stability: High levels of unemployment can threaten political stability, especially in low-income societies. Unemployed individuals may become disillusioned with the government and its policies, potentially leading to social unrest. In India, despite the efforts of the First Five-Year Plan, open unemployment increased by approximately 4 million during the plan’s duration (1951-1956), highlighting the gap between labour force growth and job creation.
3. Types and Extent of Unemployment: Urban unemployment can be categorised into open unemployment, where individuals are actively seeking work, and underemployment, where individuals have work but for significantly fewer hours than they are willing and able to work. In India, around 10% of the urban working force was openly unemployed as of 1953, with an additional 12% severely underemployed. This indicates that almost a quarter of the urban labour force was either fully unemployed or significantly underemployed.
4. Demographic Factors: The incidence of unemployment varies by age, sex, and city size. In urban India, the labour force is predominantly male and within the 16-61 age group. Younger individuals (under 16) and women face different employment challenges, often related to the types of available jobs and societal norms. Women, for instance, are more frequently employed in domestic and personal services, where unemployment rates are typically lower.
5. Sectoral Shifts: The structure of employment shifts significantly with the size of the city. Larger cities see a decline in agricultural and extractive industries and a rise in services such as transport, communication, and public utilities. Notably, “distributive” and “other” services account for a substantial portion of employment in larger urban centres, reflecting a shift away from traditional industries towards more service-oriented economies.
6. Challenges for New Entrants: New entrants to the labour force, especially those seeking work for the first time, constitute a significant portion of the unemployed. These “freshers” face considerable difficulty finding employment, often due to a lack of experience and skills that match the market’s demands. In the most significant Indian cities, over one-third of the unemployed were first-time job seekers, with a majority being under 16 years old.
7. Policy Implications: Addressing urban unemployment requires targeted policies that go beyond general economic growth. The Indian Planning Commission, during the Second Five-Year Plan, recognised the need for specific measures to reduce unemployment levels. However, the exact solutions were not clearly defined, reflecting the complexity of the issue and the need for comprehensive strategies that consider various factors such as education, vocational training, and industrial diversification.
Urban unemployment is a multifaceted issue with significant economic, political, and social implications. Effective mitigation requires a deep understanding of its causes and manifestations, coupled with targeted policy interventions. The case of India during its early development planning years illustrates the challenges and complexities involved in tackling urban unemployment in a rapidly growing economy.
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