Employment: Growth, Informalisation and Other Issues: Complete Class 12 Notes

Work is not just about earning a living; it gives us a sense of self-worth and contributes to the nation's GDP. In the Indian context, the structure of employment has undergone massive shifts since 1991. These notes cover the essential NCERT concepts required for the CBSE Class 12 Economics board exam.

1. Basic Concepts: Who is a Worker?

Worker: An individual who is involved in some productive economic activity to earn a living is known as a worker.

• Who is included? It includes self-employed persons (shopkeepers, barbers), regular employees, and even those temporarily absent due to illness or injury.
• Who is NOT a worker? Beggars, thieves, gamblers, and smugglers are not workers because their activities are not legally productive and do not contribute to GDP.

2. Worker-Population Ratio (WPR)

This is a critical indicator used to analyze the employment situation in a country. It represents the proportion of the population actively contributing to production.

Formula: $\frac{\text{Total Number of Workers}}{\text{Total Population}} \times 100$

Key Trends in WPR:

• Rural vs. Urban: The participation rate is higher in rural areas because poverty compels people to take up any available work, often leaving school early.
• Gender Gap: For every 100 urban females, only about 21 are working, compared to 35 in rural areas. Families with higher incomes (mostly urban) often discourage women from working.

3. Self-Employed vs. Hired Workers

• Self-Employed: Workers who own and operate their own enterprises (e.g., farmers, cement shop owners). About 52% of India's workforce is self-employed.
• Hired Workers: People who work for others and receive wages/salaries.
  • Regular Salaried Employees: Hired on a permanent basis with social security benefits (pension, PF). Found more in urban areas due to educational requirements.
  • Casual Wage Labourers: Hired on a daily/short-term basis without social security. (e.g., construction workers).

4. Jobless Growth and Sectoral Shifts

Jobless Growth: A situation where the economy's GDP grows at a faster rate than the rate of employment generation. This means we are producing more goods using technology rather than human labor.

Sectoral Distribution:

• Primary Sector (Agriculture): Still employs the largest share of the workforce (approx. 44-48%).
• Tertiary Sector (Services): The fastest-growing sector in terms of employment, especially post-1991.

5. Informalisation and Casualisation

This is the most "Hot" topic for 4-mark and 6-mark questions.

• Casualisation: The process where the percentage of self-employed and regular salaried workers decreases, and the share of casual wage laborers increases.
• Informalisation: The trend where people shift from the Formal Sector (organized) to the Informal Sector (unorganized).

6. Types of Unemployment in India

• Disguised Unemployment: When more people are engaged in an activity than required (Marginal Productivity = 0). Common in Indian agriculture.
• Seasonal Unemployment: Occurs when people do not find work during certain months of the year (off-season in farming).
• Open Unemployment: When a person is willing to work at the prevailing wage rate but cannot find any job.

Government Measure: MGNREGA (2005)

The Mahatma Gandhi National Rural Employment Guarantee Act ensures at least 100 days of guaranteed wage employment in a financial year to every rural household whose adult members volunteer to do unskilled manual work.

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