UNEMPLOYMENT

Unemployment is that situation in which people, who are capable of working, wants to get
the work, for that, they are actively seeking for the work but unable to get the work or we can
say, if the working force grows faster than the stock of the capital of a country, the entire
labour force cannot be absorbed in productive employment. It will result to unemployment.

Types of unemployment -

Seasonal Unemployment - Seasonal unemployment arises due to the change in seasonal
character of a particular productive activity. Agriculture is a seasonal occupation in which the
farmer does not have sufficient work to do during the slack season.
Re-arranging the process of production can be the solution for this and where this is not
possible, complementary and subsidiary jobs have to create for the people suffering from
seasonal unemployment.

Frictional unemployment - Frictional unemployment occurs when persons are temporarily
out of work because of switching from one job to another. It happens because of the lack of
perfect mobility on the part of the labour or there is unsatisfied demand for labour.
In frictional unemployment, workers are only temporarily unemployed, the reasons being
immobility of labour, the seasonal work, shortages of materials, breakdown in machinery or
ignorance of the job seekers.

Structural unemployment - Structural unemployment occurs because of capital-labour
substitution which reduces the demand for labour or when there is a long run decline in
demand in their particular industry. It is a situation where, at a given wage, supply of labour
exceeds the demand of labour, because there is a fundamental mismatch between the number
of people who want to get jobs and the number of available jobs. Structural unemployment is
generally considered a permanent unemployment, where improvement if possible, will only
occur in the long run.

Keynesian unemployment or cyclical unemployment - This type of unemployment is due
to the fact that the total effective demand of the community is not sufficient to absorb the
entire production of goods. When the firm is unable to sell its entire output because of its less
demand. It leads to fall in profits and finally reduction in production. It is called business
depression.
When economy will again reach in the boom period, demand of the labour will increase
because of the increasing demand in output. That why it is called cyclical unemployment.







Causes of Unemployment

High population growth
Rapid changes in technology
Rolling business cycles
Seasonal employments
Absence of employment opportunity
Discriminating factors in the place of work (may include discrimination on the basis of
age, class, ethnicity, and colour).
Insufficient rate of economic growth


Measurement of Unemployment rate

The unemployment rate is expressed as the percentage of the labour force that is counted as
unemployed.
Mathematically, the unemployment rate is:

Unemployment rate = (Number of people unemployed / labour force) x 100
(Labour force is the sum of employed and unemployed)

Unemployment rate increases in recession and decreases in expansion. The U.S. Bureau of
Labour Statistics measures employment and unemployment for individuals over the age of
15. The unemployment rate is measured using two different labour force surveys.

The Current Population Survey (CPS): Also known as the "household survey" the CPS is
conducted based on a sample of 60,000 households. The survey measures the unemployment
rate based on the ILO definition.

The Current Employment Statistics Survey (CES): Also known as the "payroll survey".
The CES is conducted based on a sample of 160,000 businesses and government agencies
that represent 400,000 individual employees.

The U.S. Bureau of Labour Statistics uses six measurements when calculating the
unemployment rate. They calculate different aspects of unemployment. The measures are:

U1- Percent of Civilian Labour Force Unemployed 15 weeks and over
U2 - Unemployment Rate-Job Losers
U3 - Unemployment Rate
U4 - All of U3+ Discouraged workers
U5 - All of U4+Marginally attached workers
U6 - All of U5+Total employed part time for economic reasons

The Labour Bureau of the Government of India has conducted a survey on employment
unemployment, and has come up with an unemployment rate based on that. The overall
unemployment rate is 9.4% and it is split out as 10.1% in rural areas and 7.3% in urban areas.
Unemployment rate is calculated as a percentage of labour force, and not the total population.
It means that 9.4% is that part of population, which want to work, is unemployed. National
Sample Survey Organization (NSSO) also calculates unemployment rates, but these surveys
are done with a gap of 5 years, so there is a desperate need to have unemployment numbers in
between.

Steps to solve Unemployment Problem

India is a vast country with great human power. But the main problem of our country is that it
does not use the human power in suitable manner. The maximum number of people in India
is suffering with unemployment problem. It is a major and complex problem for India and
has been increasing day by day. There is various type of unemployment available in India. It
is a Todays Need to promote a more appropriate balance between Rural and Urban economic
opportunities. The basic solution for this problem is the faster rate of capital formation so as
to enlarge employment opportunities. In under-developed and developing countries,
investment incentives are very low and the government can assist in the process of capital
formation. Apart from this, following steps should be taken-

The pattern of the investment should be changed - The government should encourage the
entrepreneur to invest for the expansion of small-scale and labour-intensive industries in both
urban and rural areas.
The education system of the country should be changed as it is traditional. Education
system should vocational from the beginning. After completing education, government
should provide employments in all sectors to the person.
Industries are the second sectors of the economics. It generates maximum vacancies for
unemployed. Industries technologies are traditional so it needs to change. Capital-intensive
technologies should be replaced with labour -intensive technologies.
65 percent population of India are involved in self employment. Most of them belong to
agriculture. Some other sectors for self employment are small industries, business etc.
Government should provide the special facilities for this self-employment.
To check rapid population growth is absolutely necessary to maintain the people even at
their existing levels.

Thus government should take a step forward and try to generate more employment by
stimulating private investment and increasing public investment.