Why unemployment occurs?

Being 2nd in terms of the population can seem a curse to our country especially in terms of employment. The competition that youngsters face these days is because of this population. Even those who get a job didn’t get the desired salary. Most employees are not paid in proportion to the work that we put in. What’s more, this is not a new problem or one that has been created by a single government. In our country, low monthly incomes are a norm – across all states, and as a consequence, wage inequality remains high. Wage growth significantly trails economic growth in the country. The sluggish growth of our GDP has led to a rise in inequality and widened the economic divide between rural and urban India.

The sad part is that India’s unemployed are mostly the higher educated and the young. And those who have jobs are not satisfied enough. If you believe that only a few people at the top are getting huge paychecks, think again. Because data suggest that we aren’t creating too many high-paying jobs either. And even though labor productivity has risen in India, growth in remuneration has remained slow. The sad part is statistic, graphs of unemployment are still the same. The new jobs and opportunities are nothing in front of our population. This problem needs to review and can be to some extent need to be solved through bargaining power. Skilling, sometimes, multi-skilling at all levels is the most effective way to fight the wage crisis and the coming job crisis -the crucial designation before talent can be matched with demand. If the skilling exception isn’t corrected, job seekers will end up in the bad job trap. Skills produce productivity, and productivity brings with it higher pay.

The problem is that the business power of workers in India is low and getting more worse. Wage changes are also a result of changes in the way of production. Throughout the last few years, production has become more capital intensive or less dependent on labor in nearly every manufacturing industry in the organized and unorganized sectors. This is true, if to a lesser extent, for agriculture and services as well. While technical know-how and increased use of machinery is a change that needs to be welcomed since it translates to increased productivity, in labor surplus economies like India, the enhanced productivity does not automatically translate to higher wages for employees. Therefore need of the time is to cope up with the desired need of the institutes and became more high tech by learning more digital skills.