EMPLOYMENT: INFORMALISATION AND OTHER ISSUES
Economic Activities
All human activities that contribute to the Gross National Product of the country are called economic activities.
Economic activities are rewarded in the form of money.
WORKER:
Worker is an individual who is engaged in an economic activity in order to earn money.
Importance of Work
(i) Helps to earn a living
(ii) Contributes to National Income
(iii) Provides Goods and Services to people.
Types of Workers
(i) Self Employed: They own and operate their own enterprises. About 52% of workers in India are Self Employed.
(ii) Professionals:
(iii) Regular Salaried Employed: A person who is employed by an enterprise and paid wages on a regular basis is known as regular salaried employees. For example: A Civil Engineer working for a construction company. They constitute 23% of workers.
(iv) Casual Workers: They work for others to earn a living. They do not get regular work. For Example: Construction Workers. They constitute 25% of workers.
Worker – Population Ratio
It is the proportion of population that is engaged in economic activities and produce GDP.
Worker Population Ratio =
(πππ‘ππ ππ’ππππ ππ πππππππ )/(ππππ’πππ‘πππ πππππππ) X 100
Worker Population Ratio in India is 35.
It is 34 in urban areas and 35 in rural areas.
Composition of Indian Workers
(i) India has 473 million workers (2011 – 12)
(ii) Nearly three fourth (75%) of them are in rural areas
(iii) Men constitute 70% of our work force.
(iv) In rural areas women constitute one third of the workers.
(v) In urban areas women constitute one fifth of the workers.
(vi) Women who are engaged in household activities like cooking, washing,
cleaning etc. are not considered workers because these are unpaid jobs.
Worker Population Ratio is High in Rural Area and Low in Urban Area.
Income earned by the rural workers is low.
So, more members of the family work to earn a living.
Many children leave the educational institutions and join the workforce to support their families.
Urban workers earn higher incomes. So, their children are able to complete education before joining work.
Worker- population ratio of Women is Low
In families where men earn high income, women are discouraged from working outside.
Women do a lot of work in houses. These works are not considered employment as they are not rewarded in the form of money.
WORKER POPULATION RATIO AMONG RURAL WOMEN IS HIGHER THAN THAT OF URBAN WOMEN
(I) Income of rural workers is low. So, to run the family women should also work.
(ii) Urban workers earn higher incomes. So, women are discouraged from working.
(iii) Women’s education is neglected in India. Agricultural works in rural areas do not require education. So, women easily get jobs.
Regular Salaried Employees are found more in Urban areas than in Rural areas
Big Enterprises that employ workers on a regular basis are found mainly in urban areas.
In rural areas people are mostly employed in farming. Many of them are landless. Work is not regular.
Seasonally work in rural areas.
Less number of women are found in regular salaried employment
Women are less educated
Very less number of women gets higher education and advanced skill training.
Regular salaried jobs require higher education and advanced skills.
So, proportion of women in regular salaried employment is less.
CASUALISATION OF WORK FORCE
People have been moving from regular salaried jobs and self employment to casual work. It is called casualisation of workforce. Several people have lost their jobs in IT sector recently due to recession.
Several people lost their jobs due to Pandemic of COVID-19. Causalisation of work force
INDUSTRIAL DIVISIONS IN TO WHICH ECONOMIC ACTIVITIES ARE CLASSIFIED
(i) AGRICULTURE
(ii) MINING AND QUARRYING
(iii) MANUFACTURING
(iv) ELECTRICITY GAS AND WATER SUPPLY
(v) CONSTRUCTION
(vi) TRADE
(vii) TRANSPORT AND STORAGE
(viii) SERVICES
WORKERS ARE GROUPED IN TO THREE SECTORS
(i) PRIMARY SECTOR - AGRICULTURE MINING AND QUARRYING
(ii) SECONDARY SECTOR - MANUFACTURING
ELECTRICITY GAS AND WATER SUPPLY
(iii) TERTIARY SECTOR - TRADE, TRASNSPORT, STORAGE AND
SERVICES
OCCUPATIONAL STRUCTURE OF INDIA
(i) Primary Sector is the main source of employment for majority of workers of India.
(ii) Secondary sector provides employment to about 24% of the workers.
(iii) Tertiary sector provides employment to nearly 27% of the workers.
(iv) In rural areas 64% of the workers are in primary sector. 20% workers are in
Secondary Sector and Service Sector employs 16% of rural workers.
(v) Nearly 60% of the workers in urban area are in Service Sector. Secondary
Sector employs 35% of the workers. Only 5% are in primary sector.
(vi) Women workers are found mostly in rural areas.
Unemployment
Unemployment is a situation in which a person is able and willing to work but does not find a gainful employment.
TYPES OF UNEMPLOYMENT
(i) OPEN UNEMPLOYMENT
(ii) SEASONAL UNEMPLOYMENT
(iii) DISGUISED UNEMPLOYMENT
CAUSES OF UNEMPLOYMENT IN INDIA
(i) RAPID GROWTH OF POPULATION
(ii) LOW LEVEL OF CAPITAL FORMATION
(iii) SEASONAL CHARACTER OF AGRICULTURE
(iv) DECLINE OF COTTAGE AND VILLAGE INDUSTRIES
(v) UNSCIENTIFIC MAN POWER PLANNING
(vi) LACK OF ENTREPRENEURIAL SKILLS
STEPS TO CREATE EMPLOYMENT
(i) DEVELOP COTTAGE INDUSTRIES
(ii) DEVELOP INFRASTRUCTURAL FACILITIES
(iii) ATTRACT FOREIGN INVESTMENT
(iv) REDESIGN EDUCATIONAL SYSTEM
(v) EMPLOYMENT GENERATION PROGRAMMES
(vi) PROMOTE SELF EMPLOYMENT
Informalization of the Indian Workforce
Formal/Organized Sector: 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.
Informal/Unorganized Sector: All other enterprises and workers
working in those enterprises form the informal sector.
Thus, the informal sector includes millions of farmers, agricultural l
aborers, owners of small enterprises, and people working in those
enterprises as well as the self-employed who do not have any hired
workers. It also includes all non-farm casual wage laborers who work
for more than one employer such as construction workers and headload workers.
The percentage of people employed in the formal sectors in the country is only 6%.
The rest 94% are in the informal sector.
In recent years, India has witnessed an unprecedented shift in the workforce from the formal sector to the informal sector. This process whereby, the proportion of informal workers in the total workforce increases is known as informalisation of the workforce.
Economic and Social Consequences of Unemployment
(1 ) Economic Consequences
(i) Non-utilisation of Manpower: To the extent people are unemployed,
manpower resources of the country are not utilised. It amounts to a social
wastage.
(ii) Loss of Output: There is a loss of output to the extent manpower
resources are not utilised. Unemployed persons make no
contribution to output even they have the potential to do so.
(iii) Low Capital Formation: Living only as consumers ( and contributing
nothing to production), unemployed people only add to consumption. Neither do they earn, nor do they save for investment. Accordingly, rate of capital formation remains low.
(iv) Low Productivity: Owing to disguised unemployment (occurring largely in agricultural sector) there is a low level of productivity ( output per worker or output per hectare). Low productivity implies low rate of growth.
(2) Social Consequences
Important social consequences of unemployment are as under:
(i) Low Quality of Life: Unemployment lowers the quality of life,implying a state of perpetual suffering.
(ii) Greater Inequality: Higher the degree of unemployment, greater the extent of inequality in the distribution of income and wealth. In such situations, growth does not occur with social justice.
(iii) Social Unrest: Terrorism may be motivated by several otherfactors, but the contribution of self-desperation ( on account of unemployment) is by no means less significant.
(iv) Class Struggle: Unemployment divides the society into haves and have-nots. Accordingly, there is class conflict that compounds the problem of social unrest.
Suggestions to Solve the Problem of Unemployment in India
( I ) Increase in Production: To increase employment, it is essential
to increase production in agriculture and industrial sectors.
Development of small and cottage industries should be encouraged.
Foreign trade should be encouraged and production of industries,
minerals and plantation should be accelerated. Greater the
production, greater is the demand for labour.
(2) Increase in Productivity: Demand for labour is directly related to
the productivity of labour. Higher productivity generates higher
profits and therefore, greater demand for labour. Accordingly,
productivity (implying efficiency) of labour must improve.
(3) High Rate of Capital Formation – Investment
(4) Help to Self-employed Persons – Credit facilities
(5) Educational Reforms – education with vocational training
(6) Technique of Production – Labour intensive techniques
(7) Cooperative Industries – making of groups by small enterprise
(8) Importance to Employment Programmes in Plans
IT IS NECESSARY TO CREATE EMPLOYMENT OPPORTUNITIES IN FORMAL SECTOR
Informal Sector does not follow labour laws such as Minimum Wages Act, Provident Fund Act Gratuity Act. Formal Sector follows labour laws.
Wages are low in formal sector. Informal sector pays very low wages.
Workers in formal sector enjoy facilities like paid leave, paid holidays, medical benefit, housing facilities etc.
Workers in formal sector have regular work and they have regular working hours.
Formal Sector workers enjoy job security. Informal sector workers do not enjoy job security.
Workers in formal sector enjoy social security benefits. Informal sector workers do not enjoy such benefits.
STEPS TAKEN TO PROTECT WORKERS IN THE INFORMAL SECTOR
The Government has taken steps to provide social security benefits to the workers in the informal sector.
The Government is providing support to informal units to modernise, adopt better technology and become formal units.
In rural areas, land reform measures are undertaken to give land to landless workers.
Minimum Wages Act is strictly implemented to enable workers to get fair wages.
ESI facility is extended to workers.
Provident Fund benefit is extended to informal sector workers.
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