What is unemployment?

Unemployment refers to a situation wherein shortage of jobs exists for the people who are able to work and willing to work. A person will be called as unemployed provided he/she is able to work and also willing to work, but does not get any gainful job. Hence, children, old persons, sick people, beggars and lunatic cannot be called unemployed because either they are unable to work or unwilling to work. In other words, that person will be called unemployed who has the physical and mental capability of doing a job along with desire to work but he/she does not get any productive job or he is forced to leave the job.

NSSO defines unemployment as a situation in which all those who, owing to lack of work, are not working but either seek work through employment exchanges, intermediaries, friends or relatives or by making applications to prospective employers or express their willingness or availability for work under prevailing condition of work and remunerations.

• Unemployment may be voluntary in nature also as individuals sometimes not interested to work at the prevailing wage rate due to various reasons. They are not included among the job seekers.

• Unemployment is an economic situation marked by the fact that individuals actively seeking jobs remain unhired. As ability to work is one of the important indicator in calculation of unemployment, people of the age 15 – 60 excluding sick people are included in the workforce.
• In India, a person working 8 hours a day for 273 days in a year is considered as employed on a standard person year basis. An employed person should contribute to the growth of GDP of the country. Employment can be either self-employment or hired employment. Hired employment is either on casual basis or regular basis.

Unemployment is one of the major problems of the modern world. Every country is facing this problem, be it a developed or a developing; though the reasons may be different. For example, the developed countries have to face it due to lack of effective demand. The existing structure of the developing countries is mainly responsible for this problem in them. The manpower increases significantly with rising population in countries like India, but there is a lack of other factors of production viz. land, capital, technology, entrepreneurship etc. The size of unemployment is increasing due to very high rate of growth in population particularly in rural areas in India.