Population Poverty Unemployment
Population
• Population refers to Total number of People residing in a Place.
• Growth in Population is considered to be favourable in certain Countries like Australia because:
– It provides Work Force to Produce.
– It provides Markets for the Products Produced.
– It may Promote Innovative Ideas.
– It may Promote Division of Labour & Specialization.
• Growth in Population is not desirable for Countries like India because:
– There may not be adequate Jobs to absorb all additional People.
– They put pressure on Means of Subsistence.
– They put pressure on Social Overheads (hospitals, roads, schools, etc.)
– They may result in Increased Consumption & reduced Savings & hence slow down Capital Formation.
– They may increase dependency
Causes of Rapid Growth of Population
Population generally Increases because of:
1. High Birth Rate.
2. Relatively Lower Death Rate.
3. Immigration is more than Emigration.
Causes of High Birth Rate
• Pre-dominance of Agrarian Economy.
• Slow Process of Urbanization.
• High Incidence of Poverty.
• Early Marriage of Women.
• Universal Marriage of Women.
• Role of Religion
• Joint Family System
• Illiteracy, Ignorance & Belief in Fate.
• Limited Spread of Family Planning
Causes of Decline in Death Rate
• Control of Epidemics like Plague, Small Pox, Malaria, etc.
• Control of Famines.
• Improved Medical Facilities.
• Spread of Maternity Homes.
• Impact of Social Reforms.
• Impact of Economic Development (Improved Standard of Living, Improved Hygiene & Sanitation, etc.)
Measures to Solve Population Problem
• Spread of Education
• Increase in Female Wage Employment
• Provision of Old Age Pension & Social Security
• Reduction in Infant Mortality
• Raising the Marriage Age
• Family Planning
• Urbanization
• Removing Economic Reasons for Preferring Large Families
• Introducing Incentives for People with Small Families
Poverty
- Relative Poverty
- Absolute Poverty
Relative Poverty
• Relative Poverty refers to the Income or Asset Position of one Class or Group of People in comparison with the other Classes or Groups, or of one Individual vis-a-vis the Others.
• The essential point here is that Poverty of One is Relative to the Richness of the other.
• For Example, an Average Middle Class Person is Poor when compared to the Upper Middle Class Person, who in turn, may be poorer than the Richer Person so on
Absolute Poverty
• It is associated with a Minimum Level of Living or Minimum Consumption Requirements of Food, Clothing, Housing, Health, etc.
• All those People who fail to Secure Income or Assets to have access to even these Minimum Consumption Requirements are classified as ‘Poor’.
• Is relevant for the Less-Developed Countries.
Poverty Line
• Poverty Line is drawn on the basis of Expenditure that is necessary to Secure the Minimum Acceptable Living Standard for Work & Efficiency.
• Since, Food is the most Basic Requirement, thus, Poverty Line is drawn on the basis of a Minimum Necessary Nutritional Standard expressed in terms of Calories Per Day.
• In India, the Minimum Calories intake of a Person has been put at 2,400 in Rural Area & 2,100 in Urban Areas.
• To convert this Calorie intake based Poverty Line into a Monetary Measure of Poverty, the Cost of Minimum Consumption Requirements of Food providing the minimum calories is calculated at prevailing Price.
• Thus, Government defined a Person with an Income of Less than Rs.368 (Rural) & Rs.559 (Urban) per month as living below Poverty Line.
Causes of Poverty
• Under developed Nature of the Indian Economy.
• Inequalities in Income & Assets Distribution cause Additional Income from Development to be cornered by a few Rich People.
• Rapidly growing Population is a major cause of Low Per Capita Income & Poverty in India.
• Large Scale Unemployment causes lowering of the Levels of Living of People
• Inflation has reduced Purchasing Power of Money. This has reduced Real Income & thus people can buy less and consume less with giving Income. This has added to Poverty.
• Rural Character of India’s Economy has also its bearing on Rural Poverty.
• Sociological reasons too have contributed
Measures to Reduce Poverty
• Agriculture & other Rural Vocations should be rapidly developed so as to Eradicate Rural Poverty.
• Village and Small Industries should be developed to create greater Employment both in Rural & Urban Areas.
• Programmes should be implemented that directly target the Poor & help them increase their Income & Consumption.
• Income Inequalities should be reduced:
– Labour Legislation should ensure better Wages.
– Goods consumed by the Poor should not be Taxed.
– Goods required by the Poor must be Subsidised.
– Free Health Care & Education should be provided to the Poor.
– Persons belonging to Poor Families must be provided Employment.
• Rapid Growth of Population must be controlled & Population Growth Rate brought down through Family Planning, EGednerual Eccoanotmicos:Ponpu,latIion,Pcovertyn& tives, etc.
Unemployment
• Unemployment refers to the situation where the Persons who are able to Work & Willing to Work, Fail to Secure Work or Activity which gives them Income or Means of Livelihood.
• Those who are fit to Work but do not want to Work & hence do not actively seek Work are not included among the unemployed persons
Types of Unemployment
• Voluntary Unemployment.
• Frictional Unemployment.
• Casual Unemployment.
• Seasonal Unemployment.
• Structural Unemployment.
• Technological Unemployment.
• Cyclical Unemployment.
• Chronic Unemployment.
• Disguised Unemployment.
• Voluntary Unemployment.
– People who are unwilling to Work at the Prevailing Wage Rate & People who get a continuous flow of Income from their Property or other Sources & need not to Work, such people are Voluntarily Unemployed.
– Voluntarily Unemployment is a National Waste of Human Energy, but it is not a Serious Economic Problem
• Frictional Unemployment.
– A temporary phenomenon which results from Workers which are temporarily out of Work while changing Jobs or are suspended due to Strikes or Lockouts.
– Frictional Unemployment is due to difficulties in getting Workers & Vacancies together.
– For example, Big Industries Units & Polluting Industries have been moved out of the large towns and cities like Delhi.
• Casual Unemployment.
– In Industries, such as Construction, Catering or Agriculture, where Workers are Employed on a day to day basis, there are chances of Casual Unemployment occurring due to Short-term Contracts, which are terminable any time.
• Seasonal Unemployment.
– Industries & Occupations such as Agriculture, the catering trade in Holiday Resorts, where Production Activities are seasonal in nature offer Employment only for a certain Period of Time in a Year. People engaged in such type of Work or Activities may remain Unemployed during the Off-Season which is termed as Seasonal Unemployment.
• Structural Unemployment.
– Unemployment which arises due to change in the Pattern of Demand leading to Changes in the Structure of Production in the Economy is termed as Structural Unemployment.
– Example use of Synthetic Rubber is bound to reduce Demand for Natural Rubber & lead to Unemployment in Rubber Plantation.
– The only way to remove such Unemployment is to retrain the Unemployed in new Vocations so that they learn new Technologies & are thus absorbed in the
• Technological Unemployment.
– Due to Introduction of New Machinery, improvement in methods of Production, Labour-Saving devices, etc.., some Workers tend to be replaced by Machines. Their unemployment is termed as Technological Unemployment.
• Cyclical Unemployment.
– Associated with the Cyclical Fluctuations in Economic Activity, especially in the Recessionary Depressionary Phases of Trade Cycle.
– Mostly found in Capitalist Countries like the USA and Western European Nations, etc.
– The Solution for Cyclical Unemployment lies in measures for increasing Total Expenditure in Economy, thereby pushing up the level of Effective demand.
• Chronic Unemployment.
– When Employment tends to be a Long-term feature of a Country, it is called Chronic Unemployment.
– Underdeveloped Countries suffer from Chronic Unemployment on account of the Vicious Circle of Poverty, Lack of Developed Resources & their under utilization, High Population Growth, Low Capital Formation,
etc.
• Disguised Unemployment.
– Refers to a position where People may be Working & apparently Employed, yet their Contribution to Output may be Zero. Hence, they seem to be employed, but technically they are Unemployed because their Marginal Productivity is Zero.
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