How to solve the problem of Unemployment

Meaning of Unemployment

Unemployment refers to a situation when all able and willing persons of a country do not get suitable opportunities to work. In this article, you are going to read about Unemployment solutions.

  • People who are engaged in economic activities are termed workers, and they constitute the workforce.
  • The workforce is the total number of persons actually working.
  • Workforce participation rate is the ratio of the workforce to the total population of a country.
  • Worker population ratio is the ratio of the total number of workers in a country to the population in the country multiplied by 100.

Solutions of Unemployment

Long-term Solutions/measures of Unemployment

Long-term solutions of Unemployment adopted by the various country to solve the problem of unemployment:

Emphasis on sustained self-employment: As the public sector production process is based on capital-intensive technology, there is limited scope for employment generation. Government-emphasized policy measures could use excess labor in the private sector, particularly in self-employment. Thus, self-employment would lead to a growth in income at a sustained rate.

Growth in infrastructural investment: Infrastructural investments include investments towards electricity
generation and distribution, expansion of transport and communication. These infrastructural investments lead to a growth in industrial output. Hence, more employment opportunities are created leading to sustained income growth in the economy.

Rapid industrialization: The government of many countries has to emphasize the need for rapid industrialization for strengthening the industrial base economy and to increase the gross domestic product.

Decentralized planning: The government of many countries have emphasized fundamental changes in the planning process. Rather than following the process of planning from above, decisions should be taken at the
grassroots levels such as planning from the village, block, and district levels. Hence, the unemployment problem can be solved in a better way through this process of decentralized planning.

Population control measures: The government can also put greater stress on population control measures to solve the problem of unemployment in the long run.

Short-term Solutions/measures of Unemployment

Along with long-term measures, there are certain short-term measures for sustained development in employment opportunities.

Some of these short-term solutions taken by India to solve the problem of unemployment

  • Special employment generation programmes are National Rural Employment Guarantee Scheme (NREGS), Swarna Jayanti Gram Swarozgar Yojana (SJGSY) and National Food for Work Programme (NFWP).
  • Surplus land obtained from the operation of ceilings laws has been distributed among the poor.
  • Improved specialized training provided to labour force to improve their productivity, and hence, there will be demand for skilled labour.
  • Entrepreneur development has been initiated for generating self-employment opportunities through certain schemes. Those schemes have aimed to develop entrepreneurial ability among the people and to guide them in making project reports for running their business.
  • The government has made efforts to develop small industries which have potential to generate huge employment opportunities. Small and Medium Enterprise Development Act, 2006, was passed to reduce unemployment.

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