How to Fix Unemployment?

Unemployment refers to the situation in which an individual who is able and willing to work at an existing wage rate does not get work. After going through this post, you will be able to understand “How to Fix Unemployment”.

Types of Unemployment in India

How to Fix Unemployment?


The following are some of the steps that can be taken to counter the problem of unemployment.


How to Fix Unemployment Step #1


Increase production:

It is of prime importance to increase production in the agricultural and industrial sectors in order to increase employment. For this purpose, small-scale and cottage industries should be promoted. This will not only generate new employment opportunities but also assist the industrial sector since small-scale and cottage industries act as subsidiaries of the industrial sector. Similarly, production for the purpose of foreign trade should be promoted. Increased production activities will raise the demand for labor and, thereby, the level of employment will rise.


How to Fix Unemployment Step #2


Increase productivity:

The demand for labor and productivity of labor is directly related to each other. Higher productivity generates higher profits. This, in turn, results in higher investment and higher demand for labor. The productivity of workers should be increased by imparting technical know-how. This enhances their acceptability of modernization and, thereby, increases employment opportunities.


How to Fix Unemployment Step #3


Control population:

Population explosion is a serious concern for any country as it hinders the prospects of economic growth. The uncontrolled rise in population leads to rising in unemployment and, consequently, a rise in poverty. Thus, people should be made aware of various birth control measures and the benefits of family planning and having a nuclear family.


How to Fix Unemployment Step #4


Create non-agricultural employment:

In an agrarian economy like India, the majority of the workforce is employed in the agricultural sector. The Indian agricultural sector suffers from several ills, especially disguised unemployment. Moreover, since agriculture is a seasonal occupation, many farmers remain unemployed for three to four months a year.

It is necessary to engage these people in non-agricultural sectors during this time period. The creation of non-agricultural jobs like pottery and handicrafts not only reduces disguised unemployment but also enhances the income of a farmer during the off-season. This income could then be used by the farmer to improve farm productivity.


How to Fix Unemployment Step #5


Make available easy credit and finance:

The lack of sufficient financial institutions in several rural areas makes it difficult for the rural folk to obtain credit. Where available, the credit is advanced at high lending rates. This lack of credit acts as a bottleneck to rural growth. Thus, financial institutions and banks should be set up to provide easy credit to rural people. This will encourage them to engage in self-employment activities.


How to Fix Unemployment Step #6


Provide health-care facilities:

The lack of sufficient and proper healthcare facilities characterizes the rural regions. This not only impedes rural productivity but also reduces rural life expectancy. Poor health lowers the ability of an individual to engage in gainful employment. Thus, stress should be laid on establishing proper healthcare facilities such as dispensaries, hospitals, and nursing homes in rural areas. Also, the people in these areas should be made aware of the health implications of hygiene and sanitation.


How to Fix Unemployment Step #7


Undertake educational reforms:

One of the reasons for the rise of unemployment in India is that the Indian education system is not job-oriented. It fails to provide the right kind of practical knowledge and skills required for different jobs. Steps must be taken to promote vocational training. Additionally, financial help must be given to professionals to set up their own vocational institutes.


How to Fix Unemployment Step #8


Adopt labor-intensive techniques:

In a labor-abundant country like India, stress must be laid on the adoption of labor-intensive techniques of production to employ more labor. This will help reduce the level of unemployment.


How to Fix Unemployment Step #9


Encouragement to self-help groups:

More than 60% of the people in India are self-employed. Encouraging and supporting such individuals is a way to encourage other individuals to take up self-employment activities. Self-employed individuals should be provided with different facilities such as credit, marketing, transportation, and technical training.


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