Concepts Of Employment And Full Employment-Chapter Read Economics Exposed Book Free

By Employment Is Meant An Engagement Of A Person In Some Occupation Business Trade Or Profession Etc The Notion Of Desiring To Be Employed Can Be Explained By Taking Three Established Facts (I) Working Hours Per Day (Ii) Wage Rate Op A Mans State Of Health If The Normal Working Hours Per Day In An Established Firm Are Say Seven And A Healthy Man Has The Capacity To Work For Nine Hours It Cannot Be Said That The Man Is Unemployed Or Two Hours A Day Similarly If The Wage Rate In A Particular Occupation Is Rs 25 Per Day And A Certain Man Demands Rs 40 Per Day Then He Would Not Be Able To Get Employment Finally If A Man Is Sick And Is Unable To Work He Cannot Be Included In The Rank Of The Unemployed
The Classical Economists Were Of The View That In A Free Competitive Economy Unemployment Cannot Exist For An Indefinite Period If Anyone Remains Jobless For A Considerable Period Of Time Then It Can Be Only Due To The Fact That He Is Demanding More Wages Than That He Is Really Worth For They Believed That In Order To Avoid This Prolonged Unemployment The Worker Should Accept Wage Cuts The Classical Economists However Admitted That In Short Period Unemployment Can Exist Due To Various Reasons For Example Some Unemployment May Be Caused By The Introduction Of Machinery And Other Labour Saving Devices In The Factory Or It May Be Due To Industrial Disputes Which Lead To Temporary Unemployment Among The Factory Workers Some Unemployment Can Also Exist In Factories For A Part Of A Year Where The Work Is Carried Out Seasonally For Instance Sugar Factory Works Only In Winter And Ice °Factory In Summer Some Unemployment Can Also Be Due To The Fact That Trade Unions Are Maintaining High Level Of Wages The Employers Do Not Find It Advantageous To Keep This Labour At A Higher Level Of Wages They Retain A Few Cornpetent Workers And Dispense With The Services Of Less Efficient Ones

The Modern Economists Have However Rejected The Above View Point Given By The Classical Economists They Believe That In Actual World Perfect Competition Does Not Prevail It Is Not Necessary That By Lowering The Wage Rate Only The Economy Can Operate At The Level Of Full Employment During The Great Depression Of Thirties The Economy Could Not Be Lifted Out Even By Lowering The Wage Rates J M Keynes Is Of The Opinion That Unemployment Can Only Take Place When The Current Demand For Goods And Services Is Not Sufficient To Absorb The Available Labour Into Different Occupations Employment Depends On Spending Of The Whole Income Of The People Either On Consumption Or On Investment Goods As The Level Of Money Income Increases In A Community People Tend To Spend A Smaller Portion Of Their Income On Immediate Consumption So There Will Be A Deficiency Of Return To Entrepreneurs They Try To Cut Down The Volume Of Employment They Offer To The Factors This Tendency May Be Counteracted If Investment In Capital Goods Expands Sufficiently But In A Wealthy Country There May Be Comparatively Less New Opportunities For Investment Hence The Necessary Increase In The Volume Of Investment May Be Not Made With The Result That A Portion Of Labour Force Is Unable To Find Employment