Introduction of Workers and Employment
India is amongst the largest countries in the world and has a population growth of one percent every year. With the labour market in India expanding and becoming more complex, types of employment in India, as well as the types of workers, are changing at a rapid rate, in businesses. There are up to five or six kinds of employees working in a company on today's date. Here we will learn about what is employment in economics and also see some casual employment examples.
Introduction of Work and Employment in India
India is a developing market economy, with the main employment sectors in India being agriculture, industries, and services. The maximum share of employed individuals belongs to the agriculture sector. In the year 2017, factories had employed 11 million workers in the country. The image below represents the state of different employment sectors in India.
(Image to be added soon)
Work Definition Economics
The word “work” has a broad meaning. It is not just a means to bring money home but also gives us a sense of worth. If we have to give an economic definition, work would mean doing something that helps build the national income of our country.
Employment Definition Economics
So how do we define what is employment in economics? In the terms of economics, employment means the state of having a job or being employed. If one has to employ someone, they have to pay them. The one who employs is called the employer, and the one who is getting paid for providing services is the employee. Employers can be an organization or an individual, etc. People can also be self-employed where they work for themselves and earn money through their business.
(Image to be added soon)
Types of Workers
With the growing trend of freelancers and work from home employees, the types of workers are also growing. At any time a business can have 5 to 7 types of workers in their workforce. Having different types of workers helps organizations in adjusting their staff requirements during economic ups and downs so that they can enjoy peak productivity always. To answer who is a hired worker, we need to consider the different kinds of workers an employer can have in his or her organization.
If we have to define them in broad terms, the following types of workers are there in the industry.
Full-Time Employees
Employees who come under this category usually work 30 to 40 hours a week. Employers determine the minimum number of hours. An employer who has more than 50 full-time employees is considered as an ALE (applicable large employer). Full-time employees receive many benefits from the organization like paid time off, health insurance, provident fund, maternity leaves, etc. As per FLSA (Fair labor standards act), there is no standard definition of a full-time employee, and employers have the freedom to decide how they employ their full-time and part-time employees.
Part-Time Employees
When an employee works for less than 26 hours for an organization, they come under the part-time employees’ bracket. Such employees usually do not get the benefits that are offered to full-time employees, but employers must pay the same taxes for employing part-time employees as they pay for full-timers.
Seasonal Employees
During peak seasons like summer months or holidays, employers need to hire people to cover their productivity needs. For example, a retail company needs more people during the holidays. Many of the seasonal employees are non-immigrant or H-2B visa holders. To employ people in this category, employers must fulfill all labor certification documents and DOL requirements while requesting visas for these employees. Since they are not permanent employees, they are not eligible for other benefits, but the unemployment and social security benefits still apply to them.
Temporary Employees
These employees get hired for a fixed period under a contract. A company hires temporary employees to meet the needs of a certain project or task and let go of them once the project is over. Mostly the time period is 6 months, but it could vary based on the project. Like seasonal employees, the benefits of unemployment and social security apply to temporary employees too. Employers can hire temporary employees on their own, or they can go to a recruiting or consulting agency.
Leased Employees
When a staffing agency hires an employee and then leases the employee to a company for a specific project, such employees are termed as leased employees. Typically such employees work with a company that they are leased to for 1 year or more. Leased workers exist on the payroll of the staffing agency who employed them and leased them out, and not the organization they work for. The leased employees also receive other benefits of a full-time employee through the staffing agency.
FAQs on Workers and Employment: Key Insights
1. What is the difference between a worker and an employee in the context of the Indian economy?
In economics, a worker is any individual who is engaged in an economic activity that contributes to the Gross National Product (GNP). This includes not only those who are paid by an employer but also self-employed individuals and those who assist in a family business without a formal salary. An employee, on the other hand, is a specific type of worker who is hired by an employer to perform a specific job in exchange for a wage or salary. Therefore, all employees are workers, but not all workers are employees.
2. How are workers in India primarily categorised based on their employment status?
Based on their status, workers in India are primarily categorised into three main types as per the NCERT syllabus for the 2025-26 session:
- Self-employed Workers: These are individuals who operate their own business or profession to earn their livelihood. For example, a shop owner, a farmer working on their own land, or a freelance consultant.
- Casual Wage Labourers: These workers are engaged on a daily or short-term basis and are not on a permanent payroll. They do not have job security or social benefits like provident fund. Construction workers are a common example.
- Regular Salaried Employees: These workers are hired by an employer on a permanent basis and receive a regular monthly salary. They are entitled to social security benefits like pensions and health insurance. A teacher in a school or an officer in a bank are examples.
3. What is meant by the term 'jobless growth' and why is it a concern for the Indian economy?
Jobless growth refers to an economic situation where the country's Gross Domestic Product (GDP) increases, but the rate of employment generation does not grow at a corresponding pace. It is a major concern because it indicates that economic growth is not translating into sufficient job opportunities for the expanding labour force. This can lead to rising unemployment and inequality, as the benefits of growth are concentrated among a smaller section of the population, leaving many without a stable source of income.
4. Why is the informal sector a dominant source of employment in India and what are its key implications?
The informal or unorganised sector dominates employment in India primarily due to a large agricultural base, slow growth of large-scale industries, and a lack of skills or education preventing entry into the formal sector. The key implications of this dominance are:
- Lack of Social Security: Workers in the informal sector are not covered by labour laws and do not receive benefits like provident fund, gratuity, or health insurance.
- Low and Irregular Income: Wages are typically low, and there is no guarantee of continuous work, leading to financial instability.
- Vulnerability: These workers are highly vulnerable to economic shocks and have little to no job security or legal recourse against exploitation.
5. What is the Worker-Population Ratio (WPR) and what does it indicate about a country?
The Worker-Population Ratio (WPR) is a key indicator used to analyse the employment situation in a country. It is calculated by dividing the total number of workers by the total population and multiplying by 100. A higher WPR suggests that a larger proportion of the population is actively engaged in productive, income-generating activities. Conversely, a low WPR may indicate high dependency or significant unemployment and underemployment within the population.
6. How does the distribution of the workforce typically differ between rural and urban areas in India?
The distribution of the workforce shows significant differences between rural and urban areas. In rural areas, the workforce is predominantly engaged in the primary sector, which includes agriculture and allied activities. Self-employment and casual wage labour are the most common forms of employment. In contrast, urban areas have a higher concentration of workers in the secondary (manufacturing) and tertiary (services) sectors. Here, regular salaried employment and self-employment in non-agricultural activities are more prevalent.
7. What is the fundamental difference between the concepts of employment and employability?
The concepts of employment and employability are related but distinct. Employment is the state of having a paid job or being engaged in an income-generating activity. It is an outcome. Employability, on the other hand, refers to a person's capability to gain and maintain employment. It is a set of skills, knowledge, attributes, and attitudes that make an individual attractive to employers. While a person can be employable due to their qualifications, they may still be unemployed if suitable jobs are not available.
