Q.What are the different types of unemployment?

MGNREGS (under the 2005 Act) guarantees 100 days of wage employment per year to rural households doing unskilled manual work. It provides livelihood security, builds durable rural assets, reduces poverty and migration, and empowers women and weaker sections.

This 5-mark question appears in AP Intermediate 2nd year Economics as a rural-development and poverty-alleviation programme; the AP syllabus covers it as part of India's development policy.

About MGNREGS:

1. Legal basis. It is backed by the Mahatma Gandhi National Rural Employment Guarantee Act, 2005, which makes the right to employment a legal guarantee.

2. Guarantee of work. Every rural household whose adult members volunteer to do unskilled manual work is guaranteed at least 100 days of wage employment in a financial year.

3. Demand-driven. Work must be provided within a fixed number of days of a job demand; if it is not, an unemployment allowance is payable.

4. Wages. Workers are paid statutory minimum wages, and wages are credited directly to bank or post-office accounts to prevent leakage.

5. Creation of durable assets. The works taken up - water conservation, irrigation, roads, afforestation, land development - create useful rural infrastructure.

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Unemployment in India takes several forms — open, disguised, seasonal, structural, cyclical, frictional, technological and educated unemployment. Rural areas mainly suffer disguised and seasonal unemployment, while urban areas face open, structural and educated unemployment.

Unemployment means a situation in which persons who are willing and able to work at the existing wage rate do not get work. It is a major feature of an underdeveloped, labour-surplus economy. The AP Intermediate 2nd-year Economics course (aligned with the NCERT/CBSE commerce curriculum) describes the following types.

Types of unemployment:

1. Open unemployment. Workers are completely without work and have no income, common among landless labourers and urban job-seekers.

2. Disguised unemployment. More persons are engaged in a job than are actually needed, so their marginal contribution to output is almost zero; it is common in agriculture.

3. Seasonal unemployment. Workers find work only during certain seasons, such as the sowing and harvesting seasons in farming, and remain idle at other times.

4. Structural unemployment. It arises from changes in the structure of the economy, when the demand for certain skills or industries falls.

5. Cyclical unemployment. It occurs during a downturn or depression in the business cycle when demand and production fall.

6. Frictional unemployment. It is temporary unemployment while workers move between jobs or wait to be matched with vacancies.

7. Technological unemployment. It is caused when machines and new technology replace human labour.

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