Disguised Unemployment
Disguised unemployment exists when part of the labor force is either left without work or is working in a redundant manner such that worker productivity is essentially zero. It is unemployment that does not affect aggregate output. An economy demonstrates disguised unemployment when productivity is low and too many workers are filling too few jobs.
Underemployment
Definition
Underemployment refers to a situation where a portion of the labor force is either not working or working in redundant positions, resulting in near-zero productivity. This type of unemployment does not affect total output. Underemployment occurs when productivity is low and there is an excess of workers in the economy.
Origin
The concept of underemployment first emerged in the early 20th century as industrialization accelerated, prompting many countries to focus on labor market efficiency. The phenomenon was particularly evident during the transition from agricultural to industrial societies.
Categories and Characteristics
Underemployment can be categorized into the following types:
- Agricultural Underemployment: In traditional agricultural societies, an excess of labor is concentrated in agricultural production, leading to low productivity.
- Industrial Underemployment: During industrialization, companies may hire too many workers, resulting in some workers being in low-efficiency or ineffective roles.
- Service Sector Underemployment: In the service sector, especially in the public sector, there may be redundancy, leading to underemployment.
Characteristics of underemployment include:
- Low Productivity: The work of underemployed individuals does not significantly contribute to total output.
- Excess Labor: There is an overabundance of labor beyond actual demand.
- Difficulty in Measurement: Underemployment is often not included in official unemployment statistics.
Case Studies
Case 1: Agricultural Underemployment
In a developing country, many families rely on agriculture for their livelihood. Due to outdated agricultural techniques, productivity is low, leading to a large concentration of labor in agricultural production. Although these individuals work daily, their labor contributes minimally to total output, forming a typical case of agricultural underemployment.
Case 2: Public Sector Underemployment
In some countries' public sectors, there is significant redundancy. For example, a government office may employ too many administrative staff, whose work efficiency is low, and some may have almost no actual tasks. This situation leads to underemployment in the public sector.
Common Questions
Q: What is the difference between underemployment and unemployment?
A: Unemployment refers to individuals actively seeking work but unable to find it, while underemployment refers to those who have jobs but with very low productivity.
Q: What is the impact of underemployment on the economy?
A: Underemployment leads to resource wastage and reduces overall economic efficiency. However, since these individuals still have income, it has a short-term positive effect on social stability.
