What is disguised unemployment

What is disguised unemployment- the double loss of sitting idle and not being gainfully employed

Disguised unemployment— beneficial for firm or employees or to none

We all know what disguised unemployment is, but before I talk about its demerits, I would like to give a little introduction about this term.

Disguised unemployment is the state where people appear to be working for a firm or an organization but the output of the firm is not affected whether they work or not. In such cases, either the worker does no work or his/her productivity is nearly zero, as he is made to do the same work redundantly. In simpler words, when extra people are made to perform a job, which could be done with fewer people also. So, even if the so-called employed persons leave the organization, the productivity is not at all affected. In such cases we say, that these employees are disguisedly unemployed.

For example- Supposedly 25 people are hired for cultivating a land of 500 square yards, will each one of them will be honestly involved? Will everyone will be working to his/her potential? The answer is NO, in fact the workers won’t be performing the amount of work, which an average human labour can. Here comes the disguised unemployment. Now, at least ten of these workers are not actually employed, even if they walk out, the land cultivation won’t be affected at all.

Unfortunately, India being a developing country, faces this problem of disguised unemployment. Having abundant of population and tonnes of unemployment, there’s no deficiency of human labours, and as a result they are disguisedly unemployed, which is certainly not good for a developing country like ours. And not only in the “fields”, but the educated persons also fight for the jobs in today’s era, like anything. And this scenario has an easy analogy with the economics concept, “Lesser supply, higher demand leads to the increase in prices!!” The demand for the jobs is more than the available lot.

This disguised unemployment is present even in the biggest of the firms, as they have ample funds so they recruit, say, ten employees where there was a need of just eight. So, when seen from the company’s perspective, is it any way beneficial to the company? Those funds (that is now the salary paid to the employee, who has absolutely no work to do and the output of the company also won’t be affected much if the employee leaves the firm) could probably be invested somewhere else from where a sure shot good profit is expected to come.

Not only the companies, but even the employees employed this way are not benefited. Let’s see how!

No doubt, it makes the employee happy for the first few months if he/she gets to work less or nothing at all, and gets the salary almost for free! But is it good for his/her growth? Is it good for his/her career? Isn’t he/she just wasting his time and skills?

So, basically it is a two way loss. Neither the company has an edge nor the employee. This is something not good for a country also.

This should be seen as a problem for the country’s growing economy, and steps should be taken to eradicate this fully.

Open for feedback and suggestions 🙂

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