Unemployment is a major problem facing the country which rapidly blocks the path of progress. The number of unemployed young men and women here is increasing day by day. Even after fifty years of independence, we are miles away from our goal of giving employment to all.
The definition of unemployment is different in every country, like in America, if a person does not get a job according to his qualification then he is considered unemployed. Generally, the unemployed person is called who wants to work at the prevailing wage rate in the market but cannot find work.
The problem of employment is found in both developed and developing countries. Famous economist Keynes considered unemployment to be a bigger problem than any problem. That is why he used to say that if a country does not have any work to get the unemployed done, then they should only get their pits filled by unemployed people. There will be demand for goods and services in the country, due to which industrial development will continue in the country.
Who is called unemployed?
Unemployed is called a person who wants to work at the prevailing wage rate in the market but he is not getting work. The definition of unemployment varies from country to country. For example, in America, if a person does not get a job according to his qualification, then he is considered unemployed.
If you like this article then please like us on Facebook so that you can get our updates in future ……….and subscribe to our mailing list ” freely “
Meaning of Unemployment
Unemployment is a situation where one can not find a work to do even though he is willing to work..Unemployment means that scarce human resources are not being used to produce goods and services to cope up with the needs of public. Unemployment is an indication for the financial health of an economy.
Types of Unemployment
economists divide unemployment into a number of different categories. they are as follows :
1.Voluntary unemployment
Unemployment which occurs due to the conditions where people don’t want to work even though they can get the jobs……..Here “willingness of people to work ” . This is due to people are willingly leaving previous jobs and now looking for new ones.
Example : If Mr X is a a student pursuing final year of graduation from a renowned university and he got selected in a campus placement program by a company. After completing the final year he himself wanted to become an entrepreneur and “not at all willing to work”. This situation is voluntary unemployment.
Must Read – Accounting Standard 3
2.Frictional Unemployment
This situation of unemployment occurs as a result of temporary transitions made by workers and employers. This kind of situation always present in the industry.
The major reason that behind this condition is it takes workers some time to move from one job to another. In most of the industries it’s a very common phenomenon.
Example : In above example if Mr X is not selected by any company and as soon as he completes his final year he went to Bangalore in search of a job and got a good job after 1 year .This period of transmission also can be called frictional unemployment.
Must Read – Accounting standard 2
3. Cyclical Unemployment
Unemployment that occurs when the economy is in recession is said to be cyclical unemployment. when demand for goods and services in an economy falls then companies fire some employees in order to bring down their production and reduce the employee benefit costs. An economy has a capacity to create plenty of jobs when it’s financial health is prosperous in nature ie a well growing economy creates more jobs which again leads to unemployment scenarios in economic recession is there.
Example : If Mr X is laid off by his employer due to the measures taken by the company to withstand the economic recession .
4. Structural unemployment
Unemployment which results due to a reason that some labor markets have more workers than there are jobs available in that. And this also happens when job seekers possess skills that aren’t in high demand in the market place and lack skills that are in high demand.
Example : After some years due to advancements in technology If Mr X is fired from his job due to a reason say the freshers of that generation are having far better skills than Mr X.
Must Read –