Meaning of Disguised- Unemployment
Meaning of disguised- unemployment
Five decades ago, Mrs. Joan Robinson coined the term 'disguised -unemloyment' to denote workers who were pushed down to less remunerative occupations in order to have something to survive. Contemporary economists refer to 'disguised unemployment' to mean a sort of pseudo-employment where workers appear to be employed, but in fact are not. This is so where more labourers are tied up in different lines of production, mainly agriculture, than are necessary for producing a certain output.
Thus, disguised unemployment represents a situation where the removal from a working combination of factors of some units of labour, nothing else of consequence being changed, will leave the aggregate product of the working combination undiminished and may even increase, it.
Too many workers subsist on agriculture. Seemingly, they are employed. But their employment is not wholly productive. The ratio of labourer to land and other resources is so large that the marginal productivity of labour is reduced to zero, although the average productivity remains positive.
Referring to the underdeveloped countries of S.E. Asia, Nurkse stresses the same fact when he says, "these countries suffer from large-scale unemployment in the context that even with unaffected methods of production in cultivation, a big part of inhabitants occupied in agriculture can be impassive without plummeting agricultural production ……the marginal productivity of labour over a wide range is zero".
The result is that the marginal bodies of workers consume but they do not produce. They are employed physically but not economically and disguise themselves from their state of virtual unemployment.
‘Economists now generally agree that in densely populated countries disguised unemployment represents 25—30 per cent of the labour force which could be withdrawn without adversely affecting the farm output.
Surplus Labour as Source of Potential Saving
In backward over-populated and predominantly agricultural countries, there is mass unemployment. But it is disguised or hidden unemployment The people live in joint families, where a couple of earning members support by their labour a number of totally idle or partly employed members who are also ostensibly working. It is impossible to separate the employed from the unemployed and label the unemployed as such. That is why they are called disguised unemployed. Nurkse regards disguised unemployment as saving potential.