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when people are without jobs and have actively looked for work in the
past four weeks, and are currently available for work. Also, people who were temporarily laid off and are waiting to be called back to that job are
counted as unemployed.
The incidence of unemployment is much higher in urban areas than in rural areas. Unemployment rates for women are higher than those for men. The incidence of unemployment among the educated is much higher than the overall unemployment. There is greater unemployment in agricultural sector than in industrial and other major sectors.
FEATURES
CLASSIFICATION OF UNEMPLOYMENT
Involuntary Unemployment
Cyclic Sudden Seasonal Structural Disguised
Voluntary Unemployment
Voluntary Unemployment
Involuntary Unemployment
A person is separated from remunerative work and devoid
Seasonal Cyclic Unemployment Unemployment Part of the Certain industries capitalist system and traders and a result of engage workers trade cycle. There for a particular is greater season. When the unemployment season has ended and when there is the workers are depression a large rendered number of people unemployed. are rendered Sugar industry is unemployed. an example of this type of seasonal unemployment.
Sudden unemployment Prevalent in industries, trades and business where people are employed for a job and suddenly when the job has ended or due to some changes they are asked to go.
Structural Unemployment - It occurs when labor market is unable to provide jobs for everyone. - Reasons : mismatch b/w skills of unemployed and expectation of employers , population overgrowth Disguised unemployment - It occurs when more people are engaged in work than required actually. - common in agriculture sector in our country.
MEASUREMENT OF UNEMPLOYMENT
The National Sample Survey Organization (NSSO), which provides estimates of the rates of unemployment on the basis of its quinquennial surveys, uses three different concepts.
Usual Principal Status (UPS) Estimates the number of persons who may be said
to be chronically unemployed.
Current Daily Status Basis (CDS) Any person who works for one hour or more
during the day is considered to be employed for a half day. As such CDS is aggregate of all unemployment days of all persons.
Unemployment rate is a measure of the prevalence of unemployment and it is calculated as a percentage by dividing the number of unemployed individuals by all individuals currently in the labour force.
Country
2002 8.8
2003 9.5
2004 9.2
2005 8.9
2006 7.8
2007 7.2
2008 6.8
2009 10.7
2010 10.8
2011 9.4
India
INDIA
12 10 8 6 4 2 0
Country 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 INDIA
labour
Continued..
Slow pace of growth
Defective education system More emphasis on capital intensive techniques Slow growth of tertiary sector Lack of vocational and training facilities
Consequences of Unemployment
Economic Consequences for Businesses Negative consequences Fall in demand for goods and services Fall in demand for businesses further down the supply chain Consider the negative multiplier effects from the closure of a major employer in a town or city Some positive consequences Bigger pool of surplus labour is available but still a problem if there is plenty of structural unemployment Less pressure to pay higher wages Less risk of industrial / strike action fear of job losses leading to reduced trade union power
Continued..
Consequences for the Government (Fiscal Policy) Increased spending on unemployment benefits and other income related state welfare payments
Fall in revenue from income tax and taxes on consumer spending Fall in profits reduction in revenue from corporation tax May lead to rise in government borrowing (i.e. a budget deficit)
Continued..
Consequences for the economy as a whole Lost output (real GDP) from people being out of work the economy will be operating well within its production frontier
Unemployment seen as an inefficient way of allocating resources labour market failure? Some of the long-term unemployed may leave the labour force permanently fall in potential GDP Increase in the inequality rise in relative poverty
Lower interest rates (a monetary policy stimulus) A lower exchange rate (helps exporters) Lower direct taxes (fiscal stimulus to spending power) Government spending on major capital projects (e.g. improving the transport infrastructure) Employment subsidies (including the New Deal programme) designed to reduce the cost to a business of employing additional workers Incentives to encourage flows of foreign investment in the UK particularly in areas of above average unemployment
Improved flows of information on job vacancies Changes to tax and benefits to improve incentives Measures designed to make the labour market more flexible so that workers have the skills and education that gives them improved employment options
Continued..
Government finances: With more people in work paying income tax, national insurance and value added tax, the government can expect a large rise in tax revenues and a reduction in social security benefits Inflationary effects Falling unemployment can also create a rise in inflationary pressure particularly when the economy moves close to operating at full capacity However this is not really a risk when the economy is coming out of recession, since aggregate supply is likely to be highly elastic because of a high level of spare capacity
SOLUTIONS
A Change in the pattern of investment
Government initiatives
Objectives
Gainful Employment to Urban Poor, Unemployed and Underemployed. Setting up Self employment ventures and provision of wageemployment Community empowerment trough creation of suitable community structures on UBSP pattern