Introduction

Employment is an activity from which a person earns means of livelihood. Every working
person contributes to national income by engaging in various economic activities. We work
not only for ourselves, but also for those who depends on us, like our family. It gives us a
sense of accomplishment when we work to meet their requirements.

Basic Concepts
Worker: A worker is an Individual, who is involved in some economic activity, to earn a
living. A worker contributes to the process of GDP by rendering his productive services. For
examples Farmers, labourers, Doctors, Lawyers, teacher etc.
Who all are included in Workers?
It is generally believed that people who are paid by employer are workers. However, this is
not True. A worker also includes followings:
 Self Employed persons, like shopkeeper, Barbers etc
 People who remain temporarily absent from work due to illness, Injury or other
physical disability, bad weather, festival or any other reasons.
 All those people who are engaged in economic activities in whatever capacity.

So, the term Worker include All those people, who are engaged in work, whether for
others (Paid workers) or for themselves (Self-employed workers).

Number of Workers in India (Approx.)

Rural Areas Urban Areas Total
Male Workers 237 Million 94 Million 331 Million
Female Workers 118 Million 24 Million 142 Million
Total No. of Workers 355 Million 118 Million 473 Million
Labour Force: Labour force is the total of employed and unemployed persons.

Labour force = Persons working + Persons seeking and/or available for work.

To get labour force subtract the following from the total population

Unfit people like Childrens below People who are People who are
Old or 15 Years not available for not willing to
handicapped work work
persons

𝑳𝒂𝒃𝒐𝒖𝒓 𝑭𝒐𝒓𝒄𝒆 𝑷𝒂𝒓𝒕𝒊𝒄𝒊𝒑𝒂𝒕𝒊𝒐𝒏 𝑹𝒂𝒕𝒆 = 𝑳𝒂𝒃𝒐𝒖𝒓 𝑭𝒐𝒓𝒄𝒆 ÷ 𝑻𝒐𝒕𝒂𝒍 𝑷𝒐𝒑𝒖𝒍𝒂𝒕𝒊𝒐𝒏

Work Force: The number of persons, who are actually employed at a particular time are
known as work force. It includes all those persons who are actually engaged in productive
activities.

𝑼𝒏𝒆𝒎𝒑𝒍𝒐𝒚𝒆𝒅 𝑷𝒆𝒐𝒑𝒍𝒆 = 𝑳𝒂𝒃𝒐𝒖𝒓 𝑭𝒐𝒓𝒄𝒆 − 𝑾𝒐𝒓𝒌 𝑭𝒐𝒓𝒄𝒆

Workers-Population Ratio: It is an indicator which is used to analyse the employment

situation in the country.

𝑾𝒐𝒓𝒌𝒆𝒓𝒔 𝑷𝒐𝒑𝒖𝒍𝒂𝒕𝒊𝒐𝒏 𝑹𝒂𝒕𝒊𝒐

= (𝑻𝒐𝒕𝒂𝒍 𝑵𝒐. 𝒐𝒇 𝑾𝒐𝒓𝒌𝒆𝒓𝒔 ÷ 𝑻𝒐𝒕𝒂𝒍 𝑷𝒐𝒑𝒖𝒍𝒂𝒕𝒊𝒐𝒏) × 𝟏𝟎𝟎

Higher Ratio indicates that high proportion of its population is involved in economic
activities and medium and lower ratio indicates that less people are involved in economic
activities.

Sex Workers Population Ratio in India (2011-12)

Rural Urban Total
Men 54.3 54.6 54.4
Women 24.8 14.7 21.9
Total 39.9 35.5 38.6
 Employment
Meaning of Employment
Employment is an activity which enables a person to earn means of living. It refers to
arrangement, by which a person earns income or means of livelihood.

Self-Employment: An arrangement in which a worker uses his Employment own

resources to make a living. A who own and
operate an enterprise to earn their livelihood are Self-Employment Wage-Employment
known as self-employed.
Regular Workers Casual Workers
 About 52% of workforce in India belongs to this
category.
 Self-Employment is a major source of livelihood for both men and women.
 In case of self-employment, a person makes use of his own land, labour, capital and
entrepreneurship, to make a living.
 For Example, Shopkeeper, trader, businessman etc.

Wage-Employment: An arrangement in which a worker sells his labour and earns wages in
return. Under this, worker is known as employee and buyer of labour is known as employer.

 Workers do not have any other resources, except their own labour.
 For example, a doctor running his own clinic is an example of self-employment.
However, if the doctor is employed by a hospital, then it will be wage employment.
 Wage-employment are of two types:
1. Regular Workers
2. Casual Workers

Regular Workers (Regular Salaried Employees): When a worker is engaged by

someone or by an enterprise and is paid wages on regular basis, then such worker is
known as regular salaried employee.

 Workers are hired on a permanent basis and also get social security benefits
(like pension, PF etc.) and enjoys job security.
 Regular worker account for just 18% of total workforce.
 For example, Professors, teachers, clerks working in a company etc.

Casual Workers: Workers who are casually engaged and, in return, get remuneration
for the work done, are termed as casual workers.

 These are not hired on permanent basis.

 Casual worker account for 30% of India’s workforce.
 Distribution of Employment (2011-12)

Employment Distribution

60
50
Nature of Employment Percent (%) 40
Self-Employment 52 30
20
Regular Workers 18 10
Casual Workers 30 0
Total 100 Self-Employed Regular Workers Csual Workers

Male Workers Female Workers

20% 13%
Sel-Employed Sel-Employed

51% Casual Workers Casual Workers

31% 56%
29% Regular Workers Regular Workers

Employment by Region RURAL-URB AN EMPLOYMENT IN

DIFFERENT SECTORS

Primary Sector Secondary Sector Tertiary Sector

64.1

56 58.3

9
35
35

43 42
20.4

15.5

15
6.7

SELF-EMPLOYED CASUAL WORKERS REGULAR WORKERS

Urban Workers Rural Workers RURAL EMPLOYMENT URBAN EMPLOYMENT

EMPLOYMENT IN DIFFEREN T MALE-FEMALE EMPLOYMENT IN

SECTORS DIFFERENT SECTORS

Primary Sector Secondary Sector Tertiary Sector Primary Sector Secondary Sector Tertiary Sector
48.9

62.8
43.6
26.8

30.5
24.3

25.9

17.2
20

MALE WOKERS FEMALE WORKERS

 Growth of Employment and GDP, 1951-2012 (%)
10
8.7
9
7.8
8

Annual Average Growth Rate

7 6.1 6.1
5.7 5.8
6
4.8
5 4.2
3.9
3.6 3.4
4 3.3
2.8
3 2.03 2.1 2.28
1.99 1.84 1.73 1.89
2 1.5
0.98 1.12
0.85
1 0.39 0.28
0
1951- 1956- 1961- 1966- 1969- 1974- 1980- 1985- 1990- 1997- 1999- 2005- 2010-
56 61 66 69 74 79 85 90 92 2000 2005 2010 2012
GDP 3.6 4.2 2.8 3.9 3.3 4.8 5.7 5.8 3.4 6.1 6.1 8.7 7.8
Employment 0.39 0.85 2.03 2.1 1.99 1.84 1.73 1.89 1.5 0.98 2.28 0.28 1.12

Jobless Growth: It refers to a situation when the economy is able to produce more goods
and services without a proportionate increase in employment opportunities.

Casualisation of Workforce: The process of moving from self-employment and regular

salaried employment to casual wage work id known as casualisation of workforce.

Status 1972-73 1999-2000 2011-12

Self-Employed 61.4 52.6 52.0
Regular Salaried Employee 15.4 14.6 18.0
Casual Workers 23.2 32.8 30.0
Total 100.0 100.0 100.0

Informalisation of Indian Workforce

The employment structure in India can be studied with respect to two kind of sectors

1. Formal or Organised sector: All the public enterprises and private establishments
which employ 10 or more hired workers, are called formal sector establishments.
 Workers who work in such establishments are known as formal sector
workers.
 Formal worker enjoys social security benefits and earn more than those in
informal sector.
 The govt. protects them in various ways through its labour laws and they can
form ‘trade unions’ to protect their interests.
 However, the organised sector provides work to just 7% of total workforce.
 2. Informal or Unorganised Sector: Informal sector includes all those private
enterprises which hire less than 10 workers.
 The workers who work in such enterprises are known as informal sector
workers such as farmers, agricultural labourers, construction workers etc.
 In India over 90% employment is found in the unorganised sector.
 The workers and enterprises in the informal sector do not get regular income
and they do not have any protection or regulation from govt. such workers
have risk of being dismissed without any compensation.
 Informal sector uses the outdated technology and do not maintain any
accounts.

Distribution of Workforce in Formal and Informal Sector (2011-12)

Category Number of workers (In Million)
Male Female Total
Formal Sector 24 6 30
Informal Sector 306 137 443

Unemployment

Meaning of Unemployment

Unemployment refers to a situation in which people are willing and able to work at the
existing wage rate, but do not get work. From the point of view of the economy,
unemployment means inefficient utilization of human resources, lower production and
lower standard of living of people.

Besides reducing the standard of living, unemployment also adversely affects the moral of
the worker and undermines his self-confidence. With prolonged unemployment, the worker
may also loose his skills and work habits and may become unemployable.

Sources of Unemployment data

There are three sources of data on unemployment.
1. Reports of census of India: Population census collects information on the economic
activity of the people.
2. National sample survey organisation (NSSO): NSSO collects data through sample
surveys and gives annual estimate of employment and unemployment.
3. Directorate General of employment and training (DGET): DGET provides
information about the structure of employment, occupational compositions and
educational profile of employees.
Types of Unemployment in India
1. Disguised unemployment: It refers to a state in which more people are engaged in a
work than are really needed.
 For example: if two workers are needed on a
piece of land and five workers are engaged on
the same job, then three workers are disguised
employed.
 It is the most predominant form of
unemployment in the agriculture sector of
developing countries like India.
 The main problem of disguised unemployment is that apparently all seem to
be employed, but marginal productivity of surplus labour is Zero i.e.,
contribution of extra workforce is Zero.
2. Seasonal Unemployment: Unemployment that occurs at certain seasons of the year
is known as seasonal unemployment.
 In India seasonal unemployment is predominantly associated with
agriculture. In agriculture work is seasonal and there are no unemployment
opportunities in the villages for all month in the year. So, when there is no
work to do on the farms, men go to urban areas and look for jobs.
 The period of seasonal unemployment varies from state to state, depending
upon the method of farming, the condition of soil etc.
3. Open Unemployment: It refers to that economic phenomenon in persons are able
and willing to work at prevailing wage rate,
but fails to get work. It is called open
unemployment because it can be seen and
counted in terms of number of unemployed
people.
Open unemployment is different from
disguised unemployment as in case of open
unemployment workers are totally idle but in
case of disguised unemployment workers
appears to be working and do not seem to be
idle.

Causes of Unemployment
1. Slow rate of economic growth: The actual growth rate always lies far below the rate
targeted in the five-year planning.
2. Population Explosion: It has not been possible to generate so many employment
opportunities to absorb the large growing labour force.
3. Underdeveloped Agriculture: Heavy pressure of population on land and traditional
method of agricultural operations are responsible for massive rural unemployment.
4. Defective educational System: The prevailing education system in India fails to make
any provision for imparting technical and vocational education. As a result, educated
people are unable to meet the requirement of the firm.
 5. Decline of Small-scale Industries: A number of small-scale industries have declined
over the years due to change in demand preferences and emergence of more
efficient industries. As a result, a large number of people have become unemployed.
6. Faulty Planning: The plans could not stop the migration of the rural population into
urban areas. The plans are unable to encourage use of labour-intensive technique of
agriculture and industrial production. The plans have failed to put due emphasis on
employment generating programmes like development of dairies, fisheries and
poultry farming etc.
7. Low capital Formation: Job creation capabilities of agriculture and industrial sectors
have been affected adversely due to low rate of capital formation.

Remedial measures for Unemployment: The unemployment problem can be solved with
the help of following measures:-
1. Accelerating growth rate of GDP: The aggregate problem of unemployment can be
solved through the process of accelerated growth.
2. Control over population growth: The rapid growth of population should be slow
down, so that the additional jobs created do not fall short of new entrants to the
labour market.
3. Development of Agriculture sector: There is need for agricultural revolution through
improved techniques, extension of irrigation facilities, reforms of land laws, increase
in public investments etc.
4. Reforms in Educational System: The present system of education should be made
more vocational and work oriented.
5. Encouragement to Small scale enterprises: The small-scale sector needs to be
encouraged through multiple initiatives like liberal finance, technical training, supply
of raw material, marketing of their products etc.
6. Manpower Planning: The future requirement of educated manpower should be
forecasted and accordingly intake into different professional courses should be
determined.
7. Implementation of Special employment programmes and improvements of
Employment exchanges.

Changes in Structure of Workforce in India

 Service Sector-Emerging as a prospective employer: with the expansion of this sector,
newly emerging jobs are mostly found in this sector.
 Technological Advancement: Due to advent of high technology, now efficient small-scale
enterprises and individual enterprises work along with MNCs.
 Outsourcing of Work
 Work at Home: Internet has become an amazing mean for work at home opportunities.
 More Employment in Informal Sector