Why is being educated and unemployed a peculiar problem in India? Unemployment and its types

When a person is actively seeking employment but is unable to do so, it is called unemployment. Unemployment is seen as a significant indicator of the growth of the country’s economy. The unemployment rate, which is calculated by dividing the number of jobless persons by the total number of people in the labor force, is the most used measure of unemployment. It is an important indicator as it depicts the ability or inability of the workers to find employment and contribute to the output and productivity in the economy. 

People who quit the workforce for other reasons, such as retirement, higher education, or disability, are not included.

Types of Unemployment

Unemployment can be divided into two categories: rural unemployment and urban unemployment. Open unemployment, seasonal unemployment, and disguised unemployment are the three categories of rural unemployment. Urban unemployment, on the other hand, is divided into three categories: industrial unemployment, educated unemployment, and technological unemployment. In this article, we shall discuss the different types of rural unemployment in brief. 

1. Disguised Unemployment 

Disguised Unemployment is an unacknowledged kind of unemployment in which an individual’s behaviors imply that they are busy or occupied with work, whether it is related to agriculture or business, or with their family members. Despite this, the amount of production recorded by this occupation is almost insignificant.

  • When an individual is not working to his or her full potential, this is referred to as disguised unemployment.
  • Individuals are not counted as unemployed in official employment statistics.
  • In rural places, this type of unemployment is particularly harsh and obvious.

To put it in another way, disguised unemployment occurs when marginal productivity or contribution to total output is nearly nil. As a result, even if some people are laid off, the total output will remain unchanged. And it is for this reason that they are labeled as “disguisedly unemployed.”

As a result, it is self-evident that such employment will not positively impact people’s economies. It denotes a surplus of labor with no productivity.

2. Seasonal Unemployment 

Seasonal unemployment
Why is being educated and unemployed a peculiar problem in India? Unemployment and its types 4

Seasonal unemployment refers to a situation in which persons who work in seasonal activities are unable and unwilling to work at the current wage rate. It’s also known as seasonal unemployment since it occurs at different times throughout the year as a result of the seasonal nature of labor.

A lot of industries report a rapid spike in activity during a specific season or time, necessitating the hiring of a large workforce to accommodate the influx of work. However, on other days, work is regular, and a portion of the workforce remains unemployed. This is common among dockworkers and construction workers in sugar, textile, and ice companies. 

As a result, during the off-season, the workers are idle and have no work to perform, so they wait for the following season to start and look for similar work to get hired and earn money to support themselves. As a result of this predicament, laborers are forced to move from one location to another to find work during the off-season.

The reason behind seasonal employment could be various structural forces like labor immobility between occupations or savings shortfall. The absence of a favorable investment climate could also pose a hindrance. Fluctuations in labor demand caused by the hiring of a high number of workers in a single occupation during peak demand and then slack demand is one of the major reasons for seasonal unemployment. 

3. Open Unemployment 

open unemployment
Why is being educated and unemployed a peculiar problem in India? Unemployment and its types 5

The term “open unemployment” refers to a situation in which a person is willing to work and is educated yet unable to find job. This type of unemployment is readily seen in society. Many educated people express their opinions by stating that they have graduated from a reputable college but are still looking for work. In rural and urban settings, this type of unemployment has varied characteristics. Cities and small towns and villages behave differently when it comes to open unemployment.

When a person is looking for work in rural places such as villages or towns, he will not find it and will attempt to relocate to the city in search of work. In rural settings, a person who wants to work but is unable to do so because of the village’s customary and regional rules. He may be unable to obtain work since he is not a native of that village and has relocated; these factors contribute to rural areas experiencing open unemployment.

Related: 4 Possible Reasons for Youth Unemployment in Many Countries

KEY Differences between disguised unemployment and seasonal unemployment 

  1. Disguised unemployment occurs when the overall number of workers performing the work or job is much larger than the real number of workers required. Seasonal unemployment, on the other hand, occurs when there is a shortage of productive work during a given time of year.
  1. Disguised unemployment occurs when a section of the workforce becomes redundant. Seasonal unemployment results in lower demand for labor than expected or average during peak months.
  1. Disguised Unemployment is most prevalent in agriculture, where even if only two people are needed to cultivate the farm, five people are employed. Seasonal unemployment, on the other hand, is most common in agro-based industries, where a large workforce is required during peak seasons and no such labor is necessary during lean months. As a result, work is only available during certain seasons or for a limited period.
  1. While seasonal unemployment contributes value to production whenever possible, in the sense that value is added during the months of demand, disguised unemployment adds no value to production, in the sense that even if some workers are withdrawn, the productivity level will remain the same.

KEY Differences between disguised unemployment and open unemployment 

  1. Individuals who are unemployed and unable to earn a living are said to be in open unemployment. In disguised unemployment, an individual is working when he is not required to work.
  1. Open unemployment is among educated unemployed people, and disguised unemployment occurs mostly in the agriculture industry in rural areas.
  1. In open unemployment, a person is willing to work but unable to find work; whereas, in disguised unemployment, the individual is working but at a lower wage than their potential.
  1. Open unemployment will have an impact on the economy’s production of goods and services. However,  disguised unemployment will have no impact on the production of products and services because there are currently more workers than are necessary.

Related: What is jobless growth? Jobless Growth in India

Why is educated unemployed a peculiar problem of India?

The educated youth of India face numerous issues, one of which is educated unemployed. A multitude of variables may contribute to educated unemployed, the most common of which is a lack of job possibilities. When there are a large number of people but few job openings and companies, this can happen. There has been an uncomfortable period of widespread unemployment among educated youth. Graduates and postgraduates are stumbling from pillar to pillar in their search for employment. Furthermore, the country’s economic growth is strongly linked to such concerns; when economic growth slows, the rate of unemployment or underemployment rises.

The most common reasons for dissatisfaction with a current job appear to be ‘unsecured employment,’ ‘low salary, “stressful workplace,’ and a job-qualification mismatch.’ Unemployment affects both educated and uneducated individuals, but educated people are more affected than uneducated people since they prefer to work in their selected field due to their education. The fundamental cause of educated unemployment is a lack of self-awareness. Because people are unaware of their own talents, skills, and passions, they try things that aren’t a good fit for them and fail as a result of mindlessly following marketing fads. Due to the vast population, it is impossible to offer desired occupations to everyone due to the large number of people working in the same field. Hypertension, heart disease, psychoneurosis, depression, and suicide are all on the rise among those aged 22 to 40, as with other undesirable behaviors such as joining anti-social organizations, due to educated unemployment.

The rate of suicide among educated unemployed people has been steadily increasing. The government should give employment-related job-oriented courses or programs to assist job searchers in finding work. For the country’s overall economic advantage, the government might increase employment by investing in career-focused training and associated economic shifts that lead to new skill demands in the global economy.

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