Page 157 - DMGT401Business Environment

Business Environment

Notes 7.2 Unemployment in India

India as a nation is facing a massive problem of unemployment. Unemployment can be defined
as a state of no work for a man fit and willing to work. It is a condition of involuntary and not
voluntary idleness. Some features of unemployment have been identified as follows:
1. The incidence of unemployment is much higher in urban areas than in rural areas.
2. Unemployment rates for women are higher than those for men.

3. The incidence of unemployment among the educated is much higher than the overall
unemployment.
4. There is greater unemployment in agricultural sector than in industrial and other major
sectors.
Economists and social thinkers have classified unemployment into various types. Generally
unemployment can be classified in two types:
1. Voluntary unemployment: In this type of unemployment a person is out of job of his own
desire doesn't work on the prevalent or prescribed wages. Either he wants higher wages
or doesn't want to work at all. It is in fact social problem leading to social disorganization.
Social problems and forces such as a revolution, a social upheaval, a class struggle, a
financial or economic crisis a war between nations, mental illness, political corruption
mounting unemployment and crime etc. threaten the smooth working of society. Social
values are often regarded as the sustaining forces of society. They contribute to the strength
and stability of social order. But due to rapid social change new values come up and some
of the old values decline. At the same time, people are not is a position to reject the old
completely and accept the new altogether. Here, conflict between the old and the new is
the inevitable result which leads to the social disorganization in imposed situation. In
economic terminology this situation is voluntary unemployment.

2. Involuntary unemployment: In this type of situation the person who is unemployed has
no say in the matter. It means that a person is separated from remunerative work and
devoid of wages although he is capable of earning his wages and is also anxious to earn
them. Forms and types of unemployment according to Hock are:

(a) Cyclical unemployment: This is the result of the trade cycle which is a part of the
capitalist system. In such a system, there is greater unemployment and when there
is depression a large number of people are rendered unemployed. Since such an
economic crisis is the result of trade cycle, the unemployment is a part of it.
(b) Sudden unemployment: When at the place where workers have been employed there
is some change, a large number of persons are unemployed. It all happens in the
industries, trades and business where people are employed for a job and suddenly
when the job has ended they are asked to go.
(c) Unemployment caused by failure of Industries: In many cases, a business a factory or an
industry has to close down. There may be various factors responsible for it there
may be dispute amongst the partners, the business may give huge loss or the business
may not turn out to be useful and so on.
(d) Unemployment caused by deterioration in Industry and business: In various industries,
trades or business, sometimes, there is deterioration. This deterioration may be due
to various factors. In efficiency of the employers, keen competitions less profit etc.
are some of the factors responsible for deterioration in the industry and the business.

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