EMPLOYMENT GROWTH INFORMALIZATION ISSUES
Every working person is actively contributing to national income and hence, the development of the country by engaging in various economic activities-that is the real meaning of ‘earning’ a living.
Studying about working people gives us insights into the quality and nature of employment in our country and helps in understanding and planning our human resources. It helps us to analyze the contribution made by different industries and sectors towards national income. It also helps us to address many social issues such as exploitation of marginalized sections of the society, child labour etc.
* Worker: A worker is an individual who is in some employment to earn a living. He is engaged in some production activity.
* Production Activity: It refers to the process of producing goods and services. Employed are those who are engaged in some production activity or the other.
* Labour Supply: It refers to supply of labour corresponding to different wage rates. Supply of labour is measured in terms of man-days of work and always studied with reference to wage rate.
* Labour Force :It refers to the number of persons actually working or willing to work. It is not related to wage rate.
* Work Force: It refers to the number of persons actually working and does not account for those who are willing to work.
* Informalization of Workforce: It refers to a situation where the percentage of workforce in the formal sector tends to decline and that in the informal sector tends to rise. Market economy and informalization of workers, perhaps are strongly correlated to each other.
Workers and Employment
1. Those activities which contribute to the gross national product are called Economic activities.
2. Those who are self-employed are also called workers.
3. The nature of employment in India is multifaceted. Some get employment throughout the year, while others get employed for only a few months in a year. Many workers do not get fair wages for their work. While estimating the number of workers, all those who are engaged in economic activities are included as employed.
4. During 1999-2000, India had about a 400 million strong workforce. Since the majority of our people reside in rural areas, the proportion of the workforce residing there is higher.
5. The rural workers constitute about three-fourth of this 400 million. Men form the majority of the workforce in India. About 70 percent of the workers are men and the rest are women. Women workers account for one-third of the rural workforce whereas in urban areas, they are just one-fih of the workforce.
6. Women carry out works like cooking, fetching water and fuel wood and participate in farm labour as they are not paid jobs for this reason they are excluded from categorization of workers.
Participation of People in Employment
1. Worker-population ratio is an indicator which is used for analyzing the employment situation in the country.
2. This ratio is useful in knowing the proportion of population that is actively contributing to the production of goods and services of a country.
3. If the ratio is higher, it means that the engagement of people is greater; if the ratio for a country is medium, or low, it means that a very high proportion of its population is not involved directly in economic activities.
4. The worker-population ratio for India, divide the total number of workers in India by the population in India and multiply it by 100.
i). Rate of participation for the urban areas is about 35%.
ii). Rate of participation for the rural areas is about 41%.
iii). In urban areas, the rate of participation is about 54.3% for men and 13.8% for women.
iv). In rural areas, the rate of participation is about 54.7% for men and 26.1 % for women.
v). Overall rate of participation in the country is about 39.2%.
5. People in rural areas have limited resources to earn a higher income and participate more in the employment market. Urban people have a variety of employment opportunities. They look for the appropriate job to suit their qualifications and skills( it is common that where men are able to earn high incomes, families discourage female members from taking up jobs). Whereas in rural areas, people cannot stay at home as their economic condition may not allow them to do so.
Self Employed and Hired Workers
Workers can be categorized into self-employed and hired workers. They are:
A). Self-Employed: The workers who own and operate an enterprise to earn their livelihood are known as self-employed. For example, a cement shop owner, farmer etc. This category accounts for more than 50% of the workforce.
B). Hired Workers: Those people who are hired by others and are paid wages or salaries as a reward for their services are called hired workers.
Hired workers can be of two types:
i). Casual Workers: Those people, who are not hired by their employers on a regular/permanent basis and do not get social security benefits are said to be casual workers. For example, construction workers.
ii). Regular Salaried Workers: When a worker is engaged by someone or by an enterprise and paid his or her wages on a regular basis, they are known as regular salaried employees or regular workers. For example, engineers, teachers, etc.
Distribution of employment on the basis of gender:
i). 50% of male workers are self-employed and hired workers are- 32% of casual labour and 18% regular salaried employees.
ii). 53% of female workers are self-employed and hired workers are- 37% casual labourers and 10% regular salaried employees.
Distribution of employment by region:
i). 42% of workers are self-employed and hired workers- 18% casual labourers, and 40 % regular salaried employees in urban areas.
ii). 56% of workers are self-employed and hired workers- 37% casual labourers and 7% of regular salaried employees in rural areas.
Employment in Firms, Factories and Offices
1. In the course of economic development of a country, labour flows from agriculture and other related activities to industry and services. In this process, workers migrate from rural to urban areas. Eventually, at a much later stage, the industrial sector begins to lose its share of total employment as the service sector enters a period of rapid expansion.
2. This shift can be understood by looking at the distribution of workers by industry. Generally, we divide all economic activities into eight different industrial divisions. They are:
i) Agriculture
ii) Mining and Quarrying
iii) Manufacturing
iv) Electricity, Gas and Water Supply
v) Construction
vi) Trade
vii) Transport & Storage and
viii) Services.
3. For simplicity, all the working persons engaged in these divisions can be clubbed into three major sectors viz.
i) Primary sector: Which includes agriculture and mining and quarrying. It is the main source of employment for the majority of workers in India.
ii) Secondary sector: It Includes Manufacturing, Electricity, Gas & Water Supply and Construction. It provides employment to only about 16 percent of the workforce.
iii) Service sector: It includes Trade, Transport & Storage and Services.It provides employment for about 24% of the workforce.
Growth and Changing Structure of Employment
There are two developmental indicators. They are: Growth of employment and GDP.
During the period 1960-2000, Gross Domestic Product (GDP) of India grew positively and was higher than the employment growth. However, there was always fluctuation in the growth of GDP. During this period, employment grew at a stable rate of about 2%.
A widening gap between the growth of GDP and employment. This means that in the Indian economy, without generating employment, we have been able to produce more goods and services. Scholars refer this as Jobless Growth.
In 1972-73, about 74% of the workforce was engaged in the primary sector and in 2009-10, this proportion has declined to 53%. Secondary and service sectors are showing promising future for the Indian workforce. The distribution of workforce in different status indicates that over the last four decades (1972-2010), people have moved from self employment and regular salaried employment to casual wage work. Yet self-employment continues to be the major employment provider.
The movement of labour from regular workers to casual wage workers is known as The casualization of workers. Distribution of workforce by industrial sectors shows substantial shift from farm work to non-farm work.
Information of Indian Workforce
Development planning in India, since India’s independence has been to provide decent livelihood to its people. It has been envisaged that the industrialization strategy would bring surplus workers from agriculture to industry with better standard of living as in developed countries. Over the years, the quality of employment has been deteriorating. A small section of Indian workforce is getting regular income.
The government, through its labour laws, enables them to protect rights in various ways. This section of workforce forms trade unions, bargains with employers for better wages and other social security measures.
Workforce can be classified into two categories:
A) Formal Sectors: All the public sector establishments and those private sector establishments which employ 10 hired workers or more are called formal sector establishments and those who work in such establishments are formal sector workers.
B) Informal Sectors: All other enterprises and workers working in those enterprises form the informal sector. Informal sector includes millions of farmers, agricultural labourers, owners of small enterprises and people working in those enterprises as also the self employed who do not have any hired workers.
Those who are working in the formal sector enjoy social security benefits. They earn more than those in the informal sector. Workers and enterprises in the informal sector do not get regular income; they do not have any protection or regulation from the government. Workers are dismissed without any compensation.
As the economy will grow, more and more workers would become formal sector workers. Owing to the efforts of the International Labour Organization (ILO), the Indian government has initiated the modernization of the informal sector enterprises and provision of social security measures to informal sector workers.
Unemployment
Unemployment : It is a situation where a person is ready and willing to work at the prevailing wage-rate but doesn't get the work.
Unemployment Rate : It is calculated as percentage of labour force who are unemployed, not as percentage of total population.
There are a variety of ways by which an unemployed person is identified. As per the view of some economists, an unemployed person is one who is not able to get employment for even one hour in half a day. There are three main sources of data on unemployment are:
i) Reports of Census of India.
ii) NSSO’s (National Sample Survey Organizations) reports of employment and unemployment situation.
iii) Directorate General of Employment and Training Data of Registration with Employment Exchanges.
Types of Unemployment
1. Rural Unemployment:
There are two types of rural employment. They are:
i) Seasonal Unemployment: It refers to a situation where a number of persons who are not able to find a job in a particular season.
ii) Disguised Unemployment: It exists when marginal physical productivity of labour is zero or sometimes it becomes negative. For instance, surplus manpower in the agricultural sector.
2. Urban Unemployment:
There are three types of urban unemployment. They are:
i) Industrial Unemployment: It includes those illiterate persons who are willing to work in industries, mining, transport, trade and construction activities, etc. Problem of unemployment in the industrial sector has become acute because of increasing migration of rural people to urban industrial areas in search of employment.
ii) Educated Unemployment: In India the problem of unemployment among the educated people is also quite grave. It is a problem spread across all parts of the country, because the massive expansion of the education facilities have contributed to the growth of educated persons who are on the lookout for white collar jobs. Educated unemployment may be either open or under employment.
iii) Technological Unemployment: Technological upgradation is taking place in all spheres of activity. People who have not updated their skills in the latest technology become technologically unemployed. Due to the introduction of new machinery, improvement in methods of production, labour- saving devices etc., some workers tend to be replaced by machines. Their unemployment is termed as “technological unemployment.”
3. Other types of Unemployment:
i) Frictional Unemployment: It is defined as the unemployment that occurs because of people moving or changing occupations. for e.g.; quitting voluntarily to find a better job.
ii) Structural Unemployment: It is defined as unemployment arising from technical change such as automation, or from changes in the composition of output due to variations in the types of products people demand. For example, a decline in the demand for typewriters would lead to structurally unemployed workers in the typewriter industry.
iii) Cyclical Unemployment: It is defined as workers losing their jobs due to business cycle fluctuations in output, i.e. the normal up and down movements in the economy as it cycles through booms and recessions over time. For e.g; due to the financial crisis in 2008 many people lost their jobs.
iv) Open Unemployment; It refers to that situation where in the worker is willing to work and has the necessary ability to work yet he does not get work and remains unemployed for full time. For e.g; A person is unable to find work on account of migration from rural areas to urban areas is said to be openly unemployed.
Causes of Unemployment
Some of the causes of unemployment are:
a). Slow growth of industry and slow growth rate of economic growth .
b). Population explosion and Increase in labour force.
c). Defective educational system.
d). Decline of cottage and small industry..
e). Inadequate employment planning and Under developed agriculture.
f). Lack of financial resources, Low capital formation and Excessive use of Foreign Technology.
Government and Employment Generation
The government passed an Act in Parliament known as the National Rural Employment Guarantee Act 2005. It promises 100 days of guaranteed wage employment to all rural households who volunteer to do unskilled manual work. This scheme is one of the many measures governments implement to generate employment for those who are in need of jobs in rural areas.
Since independence, the Union and state governments have played an important role in generating employment or creating opportunities for employment generation. Their efforts can be broadly categorized into two:
i). Direct : In this category, the government employs people in various departments for administrative purposes. It also runs industries, hotels and transport companies and hence provides employment directly to workers.
ii). Indirect : When output of goods and services from government enterprises increases, then private enterprises which receive raw materials from government enterprises will also raise their output and hence increase the number of employment opportunities in the economy. This is the indirect generation of employment opportunities by the government initiatives in the economy.
Special programmes to fight poverty and unemployment : Many programmes that governments implement with the aim of alleviating poverty through employment generation are called Employment generation programmes. These programmes aim at providing not only employment but also services in areas such as primary health, primary education, rural drinking water, nutrition etc. some of them are: Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA), Swarna Jayanti Sahari Rozgar Yojna, Swarna Jayanti Gram Swarojgar Yojna, Pradhan Mantri Gramodaya Rozgar Yojana.
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