Question

What do you understand by disguised unemployment? Explain with an example each from the urban and rural areas.

Answer 1

Disguised Unemployment

• It is a situation in which people are made to work less than their potential despite observing that all of them are working.
• It is a kind of underemployment.
• In contrast to a situation in which a person is clearly unemployed and does not have a job, in disguised unemployment the situation of lack of job is hidden, it is not clearly visible.

Disguised Unemployment Example – Rural Area

• Taking the example of a small farmer, named Laxmi. Her family consists of 5 members.
• Throughout the year, all the members of the family work on the same, small piece of land.
• She owns two hectares of unirrigated land, which means they are solely dependent on rains and growing crops like arhar and Jowar.
• We can see that the labour efforts of all the 5 people gets divided.
• None of the 5 members are idle, as they work on the same land, and none of them have any alternative employment opportunities.
• Suppose few members of the family get the opportunity to work elsewhere, the production from the farm land will still not get affected.
• The production from the land will remain the same and the family income will increase as a couple of members of the same family are working elsewhere.
• In India, there are lakhs of farmers like Laxmi, the above mentioned situation is an example of disguised unemployment in rural areas of India.

Disguised Unemployment Example – Urban Areas

• In urban areas, there are thousands of casual workers in the service sector, who are in search of daily employment.
• These casual workers are employed as repair persons, plumbers, painters, plumbers, and doing odd jobs.
• Not all of the above mentioned people find work on a daily basis.
• Similarly, we see other people in the service sector selling something on the street or pushing a cart. They earn very little although they spend the whole day working.
• They do this job, as they do not have any alternatives.