INEQUITY AND UNEMPLOYMENT

Akshat Goel2008ME10483

UNEMPLOYMENT

What is unemployment ?

Unemployment refers to a situation where the persons able to work & willing to work, fail to

secure work or activity which gives them income or means of livelihood

Types of Unemployment

Voluntary

Casual

Structural

Frictional

Sesonal Technological

Chronic

Disguised

Cyclical

Unemployment

Current Situation in India and Worldwide

According to Labour Bureau's Employment and Uemployment Survey (2009-10), the estimated uemployment rate – in the region of 9.4 percent

It is evident from the survey that the situation has not changed in the two decades of reforms

Current Situation in India and Worldwide

● 10.1% of rural labor force is unemployed, and 7.3% in urban areas● The global unemployment rate is around 6% continuously from 2009 to 2011

● In absolute figures the number the number of under 25 out of work worldwide is estimated to be around 81 million

● The developing world is home to nearly 90% (as of 2010) of the economically active youths, with Asia alone accounting for some 60%

Current Situation in India and Worldwide

“The former British premier Gordon Brown will call on world leaders to address this issue, warning of

a 'time bomb' that could damage both the developed world and emerging economies”

“The combined sales of world's top 200MNCs is now greater than that of the combined GDP of all but world's nine largest national economies. Yet total direct employment generated by these

multinationals is a mere 18.8 million -one-hundredth of one percent of the global workforce” --- Institute for Policy Studies

“Right now, the problem of unemployment has not fully appeared, but it's a bomb in a dormant state" --- J. Manohar Rao

De-linking Economic Growth and Unemployment - Global

Year World GDP Growth Unemployment2007 5.3 5.62008 2.8 5.72009 -0.6 6.32010 5 6.22011 4.5 6.1

2007 2008 2009 2010 2011

-1

0

1

2

3

4

5

6

7

GDP & Unemployment Comparision

World GDP GrowthUnemployment

Year

%

De-linking Economic Growth and Unemployment - India

Industry Employed Workers (million) Annual Growth Rate (%)

1983 1993-94 1999-00 1983-94 1994-00

Primary 208.99 245.16 239.83 1.6 -0.34

Secondary 41.66 55.53 66.91 2.9 3.14

Tertiary 52.11 73.76 90.26 3.53 2.42

Total 302.76 374.45 397 2.04 0.98

➔ Growth of employment during 1994-2000 has substantially gone down

➔ The post liberalisation period thus appears to be one, which neglected agriculture

De-linking Economic Growth and Unemployment - India

➢Also because the share of public sector in the overall organised sector employment is around 75% therefore increase in private sector employment cannot change the overall organised sector scenario

Growth Rate (%)

1983 - 94 1994 - 00

1 Population 2.12 1.93

2 Labour Race 2.05 1.03

3 Employment 2.04 0.98

4 Organised Sector Employment

1.2 0.53

Public Private

1.520.45

-0.031.87

➢Little growth in the organised sector employment has been because of the private sector as public sector has shown negative growth

De-linking Economic Growth and Unemployment - India

But I think that, the positive points of the GDP growth should not be neglected

Growth of Average Daily Wage Earnings

Rural Males Rural Females

1987-88 to 1993-94

1993-94 to 1999-00

1987-88 to 1993-94

1993-94 to 1999-00

Public Works 1.55 3.83 1.9 5.04

Casual Labour in Agriculture

1.36 2.8 2.34 2.94

Casual Labour in non-

agriculture

1.33 3.7 1.32 5.07

Casual Labour in all Activities

0.77 3.59 1.95 3.19

Caution : Just by looking at the increase in per day earning of employees it would be wrong to assess that total earnings have increased, as we have not taken into the account

the total number of days for which the workers were employed.

De-linking Economic Growth and Unemployment - India

Because there is a decent increase in the productivity of workers it is a better use of the human potential.

Growth rate of productivity per worker

1983-84 to 1993-94 1993-94 to 1999-00

Primary 1.44 3.59

Secondary 2.97 4.08

Tertiary 3.12 5.13

Total 2.97 5.64

Looking Ahead and Conclusions

“Organised sector cannot provide 10 million jobs per year” -- Indian Economy book by

Ruddar Dutt and K.P.M Sundharam

The country has, therefore to stimulate the growth of agriculture, small-scale industries,

informal sector units so as to achieve the goal of 100 million additional jobs in the next 10 years.

Looking Ahead and Conclusions

I feel that small business opportunities (indirectly in the form of unorganised sectors) created by the big companies cannot be neglected, and these companies generate huge revenue as

well. It is evident from the following excerpts.

Looking Ahead and Conclusions

Sunil Mittial, Founder, Bharti“Bharti Airtel employs around 50,000 people today, but we provide

indirect employment to around 1.5 million.”

Looking Ahead and Conclusions Other examples are

● Tally (accounting software)You must have seen small tally coaching institutes that have come up in all the areas of India, though Tally is made by a Multi national corporation. ● Computer-Mobile Repair shopsThere are many small computer repair shops both in rural and urban areas which employs many people though they are not directly employed by the huge MNCs which are making computers and mobiles.● Motorcycle-Car repair shopsAutomobile repair shops are a very common site in all the parts of India. The kind of employment generated by these units cannot be neglected.

Caution: (no supporting data)

INEQUITY

Assumption

By having more money people can at least satisfy their basic minimum material needs.

I am discussing the inequity in terms of Economics.

Because I think economic inequity leads to many problems in the society. For eg. Crime etc.

People don't have money that is why they are not able to purchase good education, good health, good home, healthy food, better

cleanliness etc, and that is why they are poor.

The Poor

Don’t ask me what poverty is because you have met it outside my house. Look at the house and count the number of holes.

Look at my utensils and the clothes that I am wearing. Look at everything and write what you see. What you see is poverty.

―A poor man, Kenya 1997

When food becomes scarce, we only eat once a day to allow our children and husbands to eat three times a day –– Philippines

1999

In India, although illiteracy is not reported as the number one reason for poverty, poor people recognize that literacy would help them to manage their lives better. “They understand that illiteracy

has made them more dependent, less enterprising and more vulnerable to the machinations of the educated” –– India, 1997

The Poor

When food becomes scarce, we only eat once a day to allow our children and husbands to eat three times a day –– Philippines

1999

In some areas of India, women within the household are expected to eat only after everyone else has finished eating, and during

times of shortage women may be left with virtually nothing to eat at all –– India 1998

Women also frequently complain of sexual harassment from coworkers and managers – India, 1998

The PoorThe Story of Murari - India, 1997

Murari is a 30-year-old man who is presently living in the village of Kedarkui with his family. He began his period of contractual labor in agriculture five years ago for a

dominant Thakur caste farmer. The Thakur also acts as a moneylender in many of the surrounding villages.

Five years ago, Murari took out a loan of approximately Rs. 1000 that he needed for an unexpected emergency. As a term of the loan, Murari was compelled to work for the Thakur farmer as an agricultural laborer on the moneylender’s land for a wage of only Rs. 5000 a year. This Thakur farmer/money lender provided Murari and his family with accommodations, food, and some money for miscellaneous expenses, while keeping account of everything that was provided. At the end of the first two years, Murari owed Rs. 2,500 to the Thakur. After two years of labor he owed 250 percent more to the Thakur than he had initially borrowed due to the interest incurred on the loan, charges for food and accommodation, small loans provided on an on-going basis and so on. .

However, despite this dismal situation Murari was not able to leave the Thakur’s farm in search of more profitable work. If he attempted to leave, or flee, it is reported that the moneylender would track him down and the consequences would undoubtedly be serious. After five years of work as an agricultural laborer and house servant for the Thakur, Murari now owes over 8000 Rs

The Rich

The 15,000-square-foot 'bungalow' features a swimming pool, jacuzzi, karaoke studio, and gym, as well as party rooms and terraces where Jhunjhunwala

entertains family, friends, and business associates.

47-year-old founder of investment house Rare Enterprises has just bought a $5.4 million, six-bedroom duplex apartment in the tony Malabar Hill

neighborhood.

"I have far more wealth than I need," says Jhunjhunwala, whose estimated net worth is just shy of $1 billion. "But it gives me the freedom to do what I enjoy and

enjoy what I do."

The Rich

Rising dramatically, 300 metres above sea level, and built at a staggering cost of over a billion dollars, Antilia (the name is likely to be changed to `Anandam') can

be described as the Taj Mahal of the 21st century.But how many mortals live in a 27-storey abode called `Antilia' (the world's priciest abode)? The answer is - just five!” – Antilia, Ambani's new house

It took seven years to build the 40,000-square-foot Bill Gates mansion on a wooded five-acre compound in the moneyed Seattle suburb of Medina. Inside

Bill Gates' Garage, you'll find a 1999 Porsche 911 Convertible and 1988 Porsche 959 Coupe. ” – Home, Bill Gates (now a philanthropist)

References

Unemployment

●http://bit.ly/epIPid (Hindy Article)●http://bit.ly/eepaw1 (Hindu Article)●http://bit.ly/gvQFyv (Hindu Article)●http://bit.ly/e4raNS (Hindu Article)●http://bit.ly/epCjAW (Hindu Article)●http://bit.ly/fDYVNf (Hindu Article)●http://bit.ly/hqrFWb (Economic Times Article)●http://bit.ly/fwBFPt (The India Site Article)●http://bit.ly/g2b1fc (The Institute of Chartered Accounts of India)●http://bit.ly/emmUfG (Ministry of Statistics and Programme Implementation)●Book : Indian Economy, by Ruddar Datt and K.P.M Sundharam

Inequity● http://bit.ly/f1A3Z2 (World Bank's Reports Link)● http://bit.ly/e6wA6y (Times of India Article)● http://bit.ly/fX5QRV (Bill Gate's Home by labnol.org)

Doubts ??

Disagreements ??

Thank You