Unemployment and its Types

Introduction

Unemployment is a condition when the person is educated, skilled and he is willing to work but he could not find any work to do he falls under the condition of unemployment. In India the present rate of unemployment is around 5%.

various types of unemployment

  • Structural Unemployment
  • Cyclic Unemployment
  • Frictional Unemployment
  • Under Employment
  • Disguised Employment
  • Open Unemployment Seasonal Unemployment

Structural Unemployment

Structural unemployment is when shifts occur in the economy that creates a mismatch between the skills workers have and the skills needed by employers.

An example is when an industry fires machinery workers and replaces them with robots. The workers need to learn how to manage the robots that replaced them. Those that don’t need retraining for other jobs or will face long-term structural unemployment. A long recession often creates structural unemployment. If workers stay unemployed for too long, their skills have likely become outdated. Unless they are willing and able to take a lower-level, unskilled job, they may stay unemployed.

even when the economy recovers. If this happens, structural unemployment leads to a higher rate of natural unemployment.

Cyclic Unemployment

Cyclical unemployment is not part of the natural unemployment rate. It’s caused by the contraction phase of the business cycle. That’s when demand for goods and services fall dramatically, forcing businesses to lay off large numbers of workers to cut costs.

Cyclical unemployment tends to create more unemployment. This is because the laid-off workers have less money to buy the things they need, further lowering demand.

Government intervention, in the form of expansive monetary policy and even fiscal policy, is usually required to stop the downward spiral. After the stock market crash of 1929, the government did not step in right away. This led to the Great Depression, which lasted 10 years and led to a 25 percent unemployment rate

Frictional Unemployment

Frictional unemployment is when workers leave their old jobs but haven’t yet found new ones. Most of the time workers leave voluntarily, either because they need to move, or they’ve saved up enough money to allow them to look for a better job. Frictional unemployment also occurs when students are looking for that first job, or when mothers are returning to the workforce. It also happens when workers are fired or, in some cases, laid off due to business-specific reasons, such as a plant closure. Frictional unemployment is short-term and a natural part of the job search process. In fact, frictional unemployment is good for the economy, as it allows workers to move to jobs where they can be more productive.

Underemployment

Underemployed workers have jobs, but they aren’t working to their full capacity or skill level. This includes those who are working part-time but would prefer fulltime jobs and those who are working in jobs where they aren’t being utilized. Underemployment is often caused by cyclical unemployment. During a recession, unemployed workers will take what they can to make ends meet. Some definitions of underemployment include unemployment. Others include segments of society that are not included in the standard definition of unemployment but are counted in the real unemployment rate. Therefore, an understanding of underemployment is helpful to get the big picture of unemployment.

Disguised Unemployment

Disguised unemployment exists where part of the labor force is either left without work or is working in a redundant manner where worker productivity is essentially zero. It is unemployment that does not affect aggregate output. An economy demonstrates disguised unemployment when productivity is low and too many workers are filling too few jobs.

Open Unemployment

It is a type of condition which is caused due to the migration of the people from the rural areas to the urban areas in search of work but when those people could not find any work to do they fall under the condition of open unemployment.

Seasonal Unemployment

Some sources include seasonal unemployment as a fourth type of unemployment. It is part of natural unemployment. Like its name says, seasonal unemployment results from regular changes in the season. Workers affected by seasonal unemployment include resort workers, ski instructors and ice cream vendors. It could also include people who harvest crops. Construction workers are laid off in the winter, in most parts of the country. School employees can also be considered seasonal workers. The BLS does not measure seasonal unemployment. Instead, it adjusts its unemployment estimates to rule out seasonal factors. This gives a more accurate estimate of the unemployment rate.

Poverty in India

It is described as the condition when the people is not able to fulfill the basic need of his/her life like clothing, shelter, health

and education

The data of poverty in India is collected by the NSSO

(National Sample Survey Organization) and it is analyzed and published by the

CSO (Central Statistical Organization)

According to the government of India around 22%of the population of India lives below the poverty line but according to the United Nations in consideration with the international poverty line 24%of the population of India lives below the poverty line Chhattisgarh has the maximum population living below the poverty line i.e. 40% whereas Goa has the minimum number of the people living below the poverty line.

There are generally two types of poverty

  • Relative Poverty
  • Absolute Poverty

Relative Poverty

It refers to poverty of people relative to other people, regions or country means it is based on the basis of comparison. When we say India is relatively poor then it is comparison with other countries the comparison is that of per capita income of different countries.

In India relative poverty is calculated with the help of Lorenz Curve and Gini Coefficient. India is relatively one of the poorest countries of the world as its per capita income is around 5$per day.

Absolute Poverty

It refers to total number of people living below the poverty line. The concept of absolute poverty has relevance for less developed countries and the concept has no relevance for the developed countries. 

In India absolute poverty is calculated on the basis of two things

Calories Intake

In India the person is considered to the absolutely poor when in the rural areas he is not able to consume 2400 calories per day and in the urban areas he is not able to consume 2100 calories per day.

Household Income

In India the person is considered to be absolutely poor when in the rural areas he is earning less than 31 rs per day and in the urban areas he is earning less than 47 rs per day.

Major Agriculture Revolutions in India

RevolutionProduct relatedFather/Person associated with
Yellow RevolutionOil seed Production (Especially Mustard and Sunflower).Sam Pitroda  
Black RevolutionPetroleum products. 
Blue RevolutionFish ProductionDr. Arun Krishnan.      
Brown RevolutionLeather / Cocoa / NonConventional Products. 
Golden Fibre Revolution.Jute Production. 
Golden RevolutionFruits / Honey Production / Horticulture DevelopmentNirpakh Tutej.  
Grey RevolutionFertilizers. 
Pink RevolutionOnion Production / Pharmaceuticals / Prawn Production.Durgesh Patel.
Evergreen RevolutionOverall Production of Agriculture.Started in 11th 5 year Plan.
Silver RevolutionEgg Production / Poultry ProductionIndira Gandhi.
Silver Fibre RevolutionCotton. 
Red RevolutionMeat Production / Tomato Production.Vishal Tewari.  
Round RevolutionPotato. 
Green RevolutionFood Grains.Norman Borlong M.S. Swaminathan. William Goud (UK).
White Revolution (or, Operation Flood)Milk Production.Verghese Kurien.  

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