What is the difference between disguised unemployment and seasonal unemployment?
Unemployment refers to a state in which individuals are willing to work but are unable to find any employment. People are willing to work for a certain salary, but there are no job openings for them. There are different forms of unemployment. India’s rural and urban areas all have high rates of unemployment. Seasonal unemployment and disguised unemployment are the two common forms of unemployment found in rural areas.
What is Disguised Unemployment?
In this type of unemployment, there seems to be employment, but it has no contribution in improving productivity. To comprehend the concept of disguised unemployment, one must first comprehend a critical term: marginal product. In the context of production, the term marginal product is used. When there is a rise in the number of workers, the demand must therefore increase. For instance, when four people are working together, the output equals eight units.
When a company hires another employee, productivity rises by up to ten units. In this scenario, the marginal product is two units and there has been an increase in demand due to the addition of new employees.
However, if demand stays at eight units even after the addition of an additional employee to the business, then, in this case, the marginal output is zero. This is alluded to as ‘disguised unemployment. In the case of disguised unemployment, even if people get jobs and services, their work does not contribute to production. This is the current situation of agriculture in India. The growth of the number of people employed in Indian agriculture is not proportional to the productivity line.
As a result, if there is no rise in marginal product or whenever the marginal product remains zero, the form of unemployment is referred to as disguised unemployment.
Disguised Unemployment: Assumptions
- Disguised unemployment is based on the assumption that there is private landholding.
- The agriculture industry is rife with disguised unemployment.
- For example, all 5 members work on the plot of land.
- This is considered self-employment.
The primary sector hires more than half of India’s working population in India but accounts for just 25% of the country’s GDP. This means that the primary sector has a poor level of production.
The main reason why productivity continues to be poor in the primary sector is that more people work in agriculture than is necessary. Even if with more labor force, the work gets divided, eliminating a few workers has no effect on the overall agricultural productivity. Some farm workers only appear to be employed. In the agricultural industry, this is how disguised unemployment occurs.
There are some ways that suggest how to tackle disguised employment in rural sectors:
- Instead of working on one farm, the extra workers will work on another farm and make extra wages.
- Similarly, the extra workers could transition to working in a factory where they can bring value to the production process.
- Irrigation infrastructure should be increased so that more than one crop can be grown in a year. Farmers will have more working opportunities as a result of this.
- Agricultural processing units should be established in order to create jobs.
What is Seasonal Unemployment?
Agriculture, for instance, is a profession that is only available during the growing season. Seasonal work is available to those who depend on agriculture for a living. They just have jobs during that season. Aside from agriculture, there are certain food processing units, such as sugar mills that provide employment for a limited time.
Seasonal unemployment is a form of unemployment in which people are unable to find work for a set period of time or for a certain number of months. People who work in the agricultural sector, as previously said, are more likely to be seasonally unemployed.
This is because there are several months where crops are sown, weeded, and harvested, and only during those months are people employed to get the job done efficiently; otherwise, they are unemployed. Seasonal unemployment occurs as workers are out of jobs at specific times of the year when the labor demand is weaker than usual. Seasonal unemployment affects jobs in any industry that experiences seasonal changes in jobs.
Seasonal Unemployment: Significance
Seasonality refers to the variations in production and revenue that exist during the most seasonal months of the year. Most goods have seasonal peaks and troughs in production and/or sales; for example, agricultural laborers are high in demand during harvesting season.
Many workers who are employed in the seasonal industries have several jobs at various times. People are taking on part-time employment in addition to their seasonal work because they are afraid of being unemployed for an extended period of time.
Because of the essence of seasonal labor, people can be out of work for up to six months out of the year. Agriculture, sugar mills, woolen textiles, ice factories, and other large seasonal industries are examples. These areas need laborers based on their requirements.
Although in some situations, people are often unemployed during the year, seasonal employment is not a barrier for them. Some individuals have to handle annual monthly consumption every year, and while work is low-waged and patchy, it becomes impossible to pay the bills every month.
People who work seasonally had little savings at the end of the year. People typically leave areas with high seasonal unemployment in search of more permanent occupations.
There are some ways that suggest how to tackle seasonal unemployment includes:
- Diversifying the workforce to create more flexible job prospects for people so they do not go unemployed for months at a time.
- Including laws requiring employees to be paid during the year, even though the job is temporary.
- In regions with high seasonal unemployment, the government could take the lead in creating more job openings during the off-season.
Difference between Disguised Unemployment and Seasonal Unemployment
The difference between Disguised Unemployment and Seasonal Unemployment are as follows:
|In this type of unemployment, people are not actually employed, but they appear to be employed.||
In this type of unemployment, people are unable to find employment during some months of the year.
Sometimes in agricultural families, 8 people are working in the farm, while there is requirement of only 5 people to do that work. The remaining 3 surplus people are not required on the farm.
Such kind of problem is faced by the people completely dependent on agriculture. Harvesting, sowing, weeding and threshing are done during busy seasons, but during the growth of the plant there is usually very less work.
The production from the farm will not be affected, if 3 surplus people are removed from the farm. Thus, these three people are actually disguised unemployed, but they appear to be employed.
During the growth of the plant, they remain unemployed and are said to be seasonal unemployed.
It is mainly found in agriculture sector, and is solely located in rural areas.
It is mainly found in agro based sector, and is solely located in both rural and urban areas.
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