Types of Unemployment in India

India’s current unemployment issue is primarily structural. Some of the main types of unemployment in our nation are as follows:

1. Disguised Unemployment (Hidden Unemployment):

Disguised Unemployment is a situation where the number of workers engaged in work is more than actually required. Another name for Disguised Unemployment is Hidden Unemployment. For instance, if five people are working on the same task but only two workers are required for the job, then three people are disguised unemployed. It is the most common type of unemployment in the agricultural sector of developing nations like India. About one-third of India’s agricultural labourers were disguisedly unemployed in the late 1950s. The primary cause of hidden unemployment is that everyone appears to be working, but the marginal productivity of the excess labour is zero, which implies that the additional workforce’s contribution is zero.

Causes of Disguised Unemployment:

• People are forced to work on family farms because there are no alternatives to agriculture, which results in hidden unemployment.
• The probability of hidden unemployment is further increased by small land holdings and family size growth.
• People who live in joint families continue to work on the family farm, which contributes to disguised unemployment.

2. Seasonal Unemployment:

Seasonal Unemployment is the type of unemployment that occurs at certain seasons of the year. In India, seasonal unemployment is predominately related to agriculture. In agriculture, work is seasonal, and the farmers do not have work to do on the farms for all months of the year. Therefore, when there is no work for men to do on farms, they go to urban areas and look for jobs. The moment the rainy season starts, they return to their villages. Depending on farming practices, soil quality, crop types, yields, etc., the period of seasonal unemployment differs from state to state.

3. Open Unemployment:

The economic phenomenon in which people are able and willing to work at the existing wage rate but fail to get work is known as Open Unemployment. Open unemployment is so-called because it is seen and counted in terms of the number of unemployed persons.

Open Unemployment is different from Disguised Unemployment

In open employment, workers who are unemployed are completely idle. In contrast, when someone appears to be working and do not seem to be wasting their time, it is known as disguised unemployment.

Unemployment is Temporary even in India

As there is a desperate economic condition in India, the people living here cannot remain completely unemployed for very long. Because of this, these people forcefully accept unpleasant, and/or dangerous jobs in unhealthy surroundings.

Unemployment is one of the most important problems that can be found in any country in the world, regardless of its economic condition. Unemployment is defined as a condition wherein people are able and willing to work at the current wage rate but cannot find work. Some skilled workers struggle to find employment for extended periods, thus, unemployment is not just confined to low-skilled employees. There are various methods for identifying an unemployed person. Some economists believe that a person is considered unemployed if they cannot find a job for even one hour during a half-day.

Key Takeaways:

• Unemployment in India is not just about job scarcity but also about the mismatch between skills demanded and skills possessed by the workforce.
• A significant portion of India’s workforce is employed in the informal sector, where job security and benefits are often lacking.
• Global economic trends and events can also impact unemployment in India, such as fluctuations in global markets, trade policies, and geopolitical tensions.
• The Indian government has launched various schemes and programs aimed at tackling unemployment, such as the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), Skill India Mission, and Startup India.