mention four causes of unemployment
Answers
i) Caste System:
In India caste system is prevalent. The work is prohibited for specific castes in some areas. In many cases, the work is not given to the deserving candidates but given to the person belonging to a particular community. So this gives rise to unemployment
(ii) Increase in Population:
Constant increase in population has been a big problem in India. It is one of the main causes of unemployment. The rate of unemployment is 11.1% in 10th Plan.
(iii) Defective Planning:
Defective planning is the one of the cause of unemployment. There is wide gap between supply and demand for labour. No Plan had formulated any long term scheme for removal of unemployment
Answer:
Unemployment is a term referring to individuals who are employable and seeking a job but are unable to find a job. Furthermore, it is those people in the workforce or pool of people who are available for work that does not have an appropriate job.
Explanation:
Types of unemployment
There are basically four types of unemployment: (1) demand deficient, (2) frictional, (3) structural, and (4) voluntary unemployment.
#1 Demand deficient unemployment
This is the biggest cause of unemployment that happens especially during a recession. When there is a reduction in the demand for the company’s products or services, they will most likely cut back on their production, making it unnecessary to retain a wide workforce within the organization. In effect, workers are laid off.
#2 Frictional unemployment
Frictional unemployment refers to workers who are in between jobs. An example is a worker who recently quit or was fired and is looking for a job in an economy that is not experiencing a recession. It is not an unhealthy thing because it is usually caused by workers looking for a job that is most suitable to their skills.
#3 Structural unemployment
Structural unemployment happens when the skills set of a worker does not match the skills demands of the jobs available or if the worker cannot reach the geographical location of a job. An example is a teaching job that requires relocation to China, but the worker cannot secure a work visa due to certain visa restrictions. It can also happen when there is a technological change in the organization, such as workflow automation.
#4 Voluntary unemployment
Voluntary unemployment happens when a worker decides to leave a job because it is no longer financially fulfilling. An example is a worker whose take-home pay is less than his or her cost of living.
Causes of unemployment
Unemployment is caused by various reasons that come from both the demand side, or employer, and the supply side, or the worker.
From the demand side, it may be caused by high interest rates, global recession, and financial crisis. From the supply side, frictional unemployment and structural employment play a great role.
Effects
The impact of unemployment can be felt by both the workers and the national economy and can create a ripple effect.
Unemployment causes workers to suffer financial difficulties that may lead to emotional destruction. When it happens, consumer spending, which is one of an economy’s key drivers of growth, goes down, leading to a recession or even a depression when left unaddressed.
Unemployment results in lowered purchasing power, which, in turn, causes lowered profits for businesses and leads to budget cuts and workforce reductions. It creates a cycle that goes on and on and on. Everyone loses in the end.