Plus One Economics Notes Chapter 7 Employment-Growth, Informalisation and Related Issues

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Kerala Plus One Economics Notes Chapter 7 Employment-Growth, Informalisation and Related Issues

Workers and Employment
Those activities that contribute to Gross National Product (GNP) or national income are known as economic activities. When farmers work in a field or a labour work in a factory, or doctor works in a hospital they produce goods or services. All those who are engaged in economic activities including self-employed are called workers. The employment situation is diverse and complex in India. It is due to the developing nature of the economy and the socio-economic and demographic factors that influence it.

Participation of People in Employment
The worker-population ratio is an important indicator of the employment situation in an economy.
Worker population-ratio refers to the ratio of workers to the population. It is computed by dividing the number of workers(W) by the total population (P) and express it in terms of percentage (W/P)*100. This ratio is useful in knowing the proportion of the population actively contributing to the production of goods and services in a country. The worker-population ratio in India for 2011 was 39.3%.

Employment in Firms, Factories, and Offices
In the course of the economic development of a country, labour flows from agriculture and other related activities to industry and services. Generally, we divide all economic activities into eight different industrial divisions. They are:

  1. Agriculture
  2. Mining and quarrying
  3. Manufacturing
  4. Electricity, gas and water supply
  5. Construction
  6. Trade
  7. Transport and storage
  8. Services.

For simplicity, all the working persons engaged in these divisions can be clubbed into three major sectors, viz.

  • Primary sector includes (1) and (2)
  • Secondary sector which includes (3), (4), and (5)
  • Service sector which includes divisions (6), (7), and (8).

Unemployment and Types of Unemployment
The unemployment situation in India is highly complex. There are different types of unemployment in our country like open unemployment, disguised unemployment, seasonal unemployment, etc. Unemployment is a situation in which people are willing to work at the prevailing wage rate, but do not get any work.

Open Unemployment: Open unemployment is the situation in which people above a certain age who are able to work and willing to work at the prevailing wage remain unemployed. Open unemployment is involuntary in nature. They are willing to work, but employment opportunities are not available to them. People standing in some selected areas waiting to be recruited as the hired worker is a case of open unemployment.

Disguised Unemployment: When more persons are working in a job than actually required, the situation is termed as disguised unemployment or hidden unemployment. If some workers are withdrawn from work, either total production or productivity falls. This type of unemployment is prominent in Indian agriculture.

Seasonal Unemployment: The type of unemployment caused by a change in seasons is termed as seasonal unemployment. This is normally found in the agricultural sector of India. Agriculture normally provides only seasonal employment and people are employed during the busy sowing and harvesting seasons. Seasonal unemployment could also be found in agro-based industries such as sugar mills, rice mills, cotton-spinning mills, etc.