- 1 INTRODUCTION
- 2 IMPACT OF COVID-19
- 3 COST OF UNEMPLOYMENT TO THE ECONOMY
- 4 EFFECTS OF UNEMPLOYMENT
- 5 LONG TERM UNEMPLOYMENT VS SHORT-TERM UNEMPLOYMENT
- 6 GOVERNMENT INITIATIVES
- 7 NEWS AND STATISTICS ABOUT UNEMPLOYMENT
- 8 CAUSES OF UNEMPLOYMENT
- 9 TYPES OF UNEMPLOYMENT
- 10 BIBLIOGRAPHY
- 11 ACKNOWLEDGEMENT
- 12 CERTIFICATE
Unemployment, according to the OECD (organisation for economic co-operation and Development ) is persons above a specified age (usually 15) not being in paid employment or self-employment but currently available for work during the reference period. Unemployment is measured by the unemployment rate, which is the number of people who are unemployed as a percentage of the labour force (the total number of people employed added to those unemployed). Unemployment can have many sources, such as the following: New technologies and inventions the status of the economy, which can be influenced by a recession competition caused by globalization and international trade policies of the government regulation and market unemployment and the states of the economy can be influenced by a country through, for example, fiscal policy. Furthermore, the monetary authority of a country, such as the central bark, can influence the availability and cost of money through its monetary policy. In addition to theories of unemployment a few categorisations of unemployment, are used for more precisely modelling the effects of unemployment include structural unemployment, frictional unemployment, cyclical unemployment involuntary unemployment and classical unemployment. Structural unemployment focuses on foundational problems in the economy and inefficiencies inherent in labours with necessary skills sets. Structural arguments emphasize cause and solution related to disruptive technologies and globalization. Discussions of frictional unemployment focus on voluntary decisions to work based on individuals valuation of their work and how that compares to current wage rates added to the time and effort required to find a job.
Causes and solutions for frictional unemployment often address job entry threshold and wages rate.
IMPACT OF COVID-19
The COVID-19 pandemic has pushed the world into unprecedented crises and uncertainty, calling to expedite the implementation of the centenary declaration. The ILO was quick to recognize that the COVID-19 PANDEMIC is not just a health crisis, but equally an economic and labour market crisis. The lockdown measures adopted in most countries to prevent the spread of the pandemic restricted economic activities evidently, developing countries have faced disruptions in trade and supply chains triggering negative growth. As early as 18 march 2020, ILO’s first monitor on COVID-19 has estimated a rise in unemployment and estimated a rise in unemployment and underemployment between 5.3 million (low scenario) and 24.7 million (high scenario) from a base level of 188 million in 2019. Footnote soon the figures have proved as highly underestimated. ILO 5th monitor on COVID-19 Impact released on 30 June 2020 suggests that the labour market recovery during the second half of 2020 will be certain and incomplete the working hour losses could range between 140 million full-time jobs and 340 million full-time jobs and 340 million full-time jobs in the last quarter of the year, depending upon the spread of the pandemic.
COST OF UNEMPLOYMENT TO THE ECONOMY
Unemployment is universally recognized as undesirable. That is more evident than ever thanks to the covid-19 pandemic, which left 10 million Americans
- The situation is so serious that the coronavirus Aid, Relief, and Economic security (CARES) act has expanded unemployment benefits to self-employed and part-time workers through pandemic emergency unemployment Assistance, which provides up to 39 weeks of benefits beginning on or after Jan 27, 2020, and ending on or before Dec 31, 2020.
- While economists and academics make convincing arguments that there is a certain natural level of unemployment that cannot be erased, elevated unemployment imposes significant costs on the individual. The society, and the country.
- Worse yet, most of the costs are of the dead loss variety, where there are no offsetting gains to the costs that everyone must bear. Depending on how it’s measured, the unemployment rate is open to interception. jobless in its first two weeks.
EFFECTS OF UNEMPLOYMENT
The impact of unemployment can be felt by both the workers and the national economy and can create a ripple effect. Unemployment causes workers to suffer financial difficulties that may lead to emotional destruction. Where it happens, consumer spending, which is one of an economy’s key drivers of growth goes down, leading to a recession or even a depression when left unaddressedUnemployment results in lower purchasing power, which in turn, causes lowered profits for business and leads to budget cuts and workforce reductions. It creates a cycle that goes on and on everyone loses in the end.
LONG TERM UNEMPLOYMENT VS SHORT-TERM UNEMPLOYMENT
Unemployment that lasts longer than 27 weeks even if the individual has sought employment in the last four weeks is called long-term unemployment. Its effects are far worse than short-term unemployment for obvious reasons, and the following are noted as some of its effects. A huge 56% of the long-term unemployed reported a decrease in their income. It seems that financial problems are not the only effects of long term unemployment as 46% of those is such a state-reported experiencing strained family relationships. The figure is relatively higher than the 39% who weren’t unemployed for as long. Another 43% of the long term unemployed reported a significant effect on their ability to achieve theirs.
- MAHATMA GANDHI NATIONAL RURAL EMPLOYMENT GUARANTEE ACT 2005
The government of India has taken several steps to decrease the unemployment rates like launching the Mahatma Gandhi National Rural Employment Guarantee Scheme which guarantees 100-day employment to an unemployed person in a year. It has been implemented in 200 of the districts and further will be expanded to 600 districts. In exchange for working under this scheme, the person is paid 150 per day. Apart from employment exchange, the government of India publishes a weekly newspaper titled employment news. It comes out every Saturday evening and gives detailed information about vacancies for government jobs across India. Along with the list of vacancies, it also has the notification for various government exams and recruitment procedures for government jobs
- STEPS TAKEN ON DISGUISED UNEMPLOYMENT
Agriculture is the most labour absorbing sector of the economy. In recent years, there has been a decline in the dependence of the population on agriculture partly because of disguised unemployment. Some of the surplus-labour in agricultures has moved to either secondary or the tertiary sector, various new services are now appearing like biotechnology, information technology and so on. The government has taken steps in these sectors for the disguised unemployed people in these methods.
- NATIONAL CAREER SERVICE SCHEME
The Government of India has initiated a National career service scheme whereby a web portal named National career service portal (www.ncs.gov.in) has been launched by the ministry of labour and employment (India). Through this portal, job seekers and employers can avail the facility of a common platform for seeking and updating job information. Not only private vacancies, but contractual jobs available in the government sector are also available on the portal.
- NATIONAL RURAL EMPLOYMENT PROGRAMME
The national rural employment programme offers people from rural areas an equal shot at job opportunities across the nation. The growing disparity in terms of personal finance between those in the rural areas to move to the urban areas, making urban management difficult. The opportunities in the rural areas especially in times of drought and other such scarcities.
- DEEN DAYAL ANTYODAYA YOJANA
The Deen Dayal Antyodaya Yojana is a scheme that aims to help the poor by providing them industrially recognised skills. The scheme is implemented by the ministry of rural development. The purpose of the scheme is to eradicate both urban and rural poverty from the country by providing necessary skills to individuals that help them find well-paying job opportunities. This is aimed to be achieved through skill training and skill upgrading which enables the poor to get self-employed, elevate themselves above the poverty line, be eligible for bank loans, etc.
NEWS AND STATISTICS ABOUT UNEMPLOYMENT
- World economy struggling with rising unemployment
- 50 lakh job’s lost in 2 years after note ban
- Unemployment has risen steadily post 2011, says report
CAUSES OF UNEMPLOYMENT
The following are the main causes of unemployment
- CASTE SYSTEM
In India caste system is prevalent. The work is prohibited for specific castes in some areas. In many cases, the work is not given to the deserving candidates but given to the person belonging to a particular community so this gives rise to unemployment.
- SLOW ECONOMIC GROWTH
Indian economy is underdeveloped and the role of economic growth is very slow. This slow growth fails to provide enough unemployment opportunities to the increasing population.
- INCREASE IN POPULATION
The constant increase in population has been a big problem in India. It is one of the main causes of unemployment is 11.1% in the 10th plan.
- AGRICULTURE IS A SEASONAL OCCUPATION
Agriculture is underdeveloped in India. It provides seasonal employment. A large part of the population is dependent on agriculture. But agriculture being seasonal provides a workforce for a few months. So this gives rise to unemployment.
- JOINT FAMILY SYSTEM
In big families having a big business, many such persons will be available who do not do any work and depend on the joint income of the family. Many of them seem to be working but they do not add anything to production so they encourage disguised unemployment.
- FALL OF COTTAGE AND SMALL INDUSTRIES
Industrial development had an adverse effect on the cottage and small industries. The production of cottage industries began to fall and many artisans became unemployed.
- SLOW GROWTH OF INDUSTRIALISATION
The rate of industrial growth is slow though the emphasis is laid on industrialisation yet the avenues of employment created by industrialisation are very few.
- CAUSES OF UNDEREMPLOYMENT
Inadequate availability of means of production is the main cause of underemployment. People do not get to shortage of electricity, coal and raw materials
- DEFECTIVE PLANNING
Defective planning is one of the causes of unemployment. There is a wide gap between supply and demand for labour. No plan had formulated any long term scheme for the removal of unemployment.
- EXPANSION OF UNIVERSITIES
The number of universities has increased manifold. There are 385 universities. As a result of this educated unemployment or white-collar unemployment has increased.
- IMMOBILITY OF LABOUR
The mobility of labour in India is low. Due to attachment to the family, people do not go too far off areas for jobs. Factors like language, religion, and climate are also responsible for low mobility. Immobility of labour adds to unemployment
TYPES OF UNEMPLOYMENT
- REAL WAGE
TYPES OF UNEMPLOYMENT
There are several types of unemployment each one defined in terms of cause and severity.
- CYCLICAL UNEMPLOYMENT
Cyclical unemployment exists when individuals lose their jobs as a result of a downturn in aggregate demand. If the decline in aggregate demand is persistent, it is called either demand deficient, general, or Keynesian unemployment. For example, unemployment levels of 3 million were reached in the UK in the last two recessions, between 1980 and 1982, and between 1990 and 1992. In the most recent recession of 2008 -20110, unemployment levels rose to 2.4 m in the last quarter of 2009, and are likely to peak at over 2.5 m during 2010.
- DEMAND DEFICIENT UNEMPLOYMENT
This is caused by a lack of aggregate demand, with insufficient demand to generate full employment.
- STRUCTURAL UNEMPLOYMENT
Structural unemployment occurs when certain industries decline because of long term changes in market conditions for example, over the last 20 years UK motor vehicle production has declined while core production in the far east has increased, creating structurally unemployed core workers Globalisation is an increasingly significant cause of structural unemployment in many countries.
- REGIONAL UNEMPLOYMENT
When structural unemployment affects local areas of an economy, it is called ‘regional’ unemployment. For example, unemployed car workers in the midlands and E8sex add to regional unemployment in these areas. In the UK, the further we move away from the affluent southeast the greater the unemployment rate, geographical immobility makes regional differences more extreme.
- CLASSICAL UNEMPLOYMENT
Classical unemployment is caused when wages are too high. The explanation of unemployment dominated economic theory before the 1930s when workers themselves were blamed for not accepting lower wages, or for asking for too high a wage. Classical unemployment is also called real wage unemployment.
- SEASONAL UNEMPLOYMENT
Seasonal unemployment exists because certain industries only produce or distribute their products at certain times of the year. Industries where seasonal unemployment is common to include farming tourism and construction.
- FRICTIONAL UNEMPLOYMENT
Frictional unemployment, also called search unemployment, occurs when workers lose their current job and are in the process of finding another one. There may be little that can be done to reduce this type of unemployment, other than providing better information to reduce the search time. This suggests that zero unemployment is impossible at any one time because some workers will always be in the process of changing jobs.
- VOLUNTARY UNEMPLOYMENT
Voluntary unemployment is defined as a situation when workers choose not to work at the current equilibrium wage rate for one reason or another worker may elect not to participate in the labour market. There are several reasons for the existence of voluntary unemployment including excessively generous welfare benefits and high rates of income tax. Voluntary unemployment is likely to occur when the equilibrium wage rate is below the wage necessary to encourage individuals to supply their labour.
- THE NATURAL RATE OF UNEMPLOYMENT
It is defined as the rate of unemployment that still exists when the labour market is in equilibrium and includes seasonal frictional and voluntary unemployment. The US economist million fried men first used the concept to help explain the connection between unemployment and inflation. A fired man argued that if unemployment fell below the natural rate there would be an increase in the rate of inflation.
- STRUCTURAL UNEMPLOYMENT AND LABOUR MOBILITY
Labour immobility is likely to increase structural unemployment this is because the industries that are growing and need labour, often called sunrise industries are not necessarily able to employ the same workers who have been displaced in the declining, sunset industries
THERE ARE THREE TYPES OF LABOUR IMMOBILITY
- GEOGRAPHICAL IMMOBILITY
Geographical immobility occurs when workers are not willing or able to move from region to region or town to town. Geographical mobility is made worse by immense house price variation between regions. It may be extremely difficult for workers in Yorkshire to sell them and buy an equivalent one in London. ]Other factors also contribute to geographical immobility, such as strong social and family ties, and parents being unwilling to disrupt their children’s education by changing school the stresses of moving home can also be a deterrent to mobility for some.
- INDUSTRIAL IMMOBILITY
Industrial immobility occurs when workers do not move between industries such as moving from employment in the motor industry to employment in the insurance industry. Industrial immobility has affected the UK and many other industrial countries, as the growth of service industries and the decline of manufacturing industries has increased the need for mobility.
- OCCUPATIONAL IMMOBILITY
Occupational immobility occurs when workers find it difficult to change jobs within an industry, for example, it may be very difficult for a doctor to retain to be a dentist. Industrial and occupation immobility is most likely to happen when skills are not transferable between industry and job. Information failure also contributes to labour immobility because workers may be immobile because they do not know where all the suitable jobs for them are. A resulting problem with labour market immobility is that it can create regional unemployment, which is a type of structural unemployment. This means that a change in the structure of industry leaves some people unable to respond by changing job industry or location and as a result, they remain temporarily or permanently unemployed.
- https :// link.springer.com/article/10.1007/s41027-020-00255-0
- https : // www.economicshelp .org/macroeconomics/unemployment/causes/
- https : // corporate finance institute.com/resources/knowledge/economics/unemployment/#:~:text=unemployment%20is%20a%20term%20referring,not%20have%20am%20appropriate%20job.
- https :// www.investopedia.com/terms/u/inemp;oyment.asp
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Contents1 OVERVIEW2 AYESHA3 JABU 4 ANDREI5 BEGINNING OF THE NEW WORLD ORDER6 …