Methods and Problems of Utilizing Surplus Labour

Methods and Problems of Utilizing Surplus Labour Now let us understand in what practical manner the saving potential in the disguised unemployment can be mobilised for capital formation. In other words, how can this surplus man-power be used for p

Methods and Problems of Utilizing Surplus Labour

 

Now let us understand in what practical manner the saving potential in the disguised unemployment can be mobilised for capital formation. In other words, how can this surplus man-power be used for purposes of economic development and what problems will arise in this connection?

There are two ways of utilizing this surplus labor. One is to put this labor on some productive projects iri the locality so that they continue to live in the family and be fed there as before. This is the simplest way and no problem arises. The hitherto unproductive workers now make a net addition to the nation's stock of capital. In the community development projects voluntary local labor is being utilized in this fashion. If these workers need some technical training, the process can start with a training course. Labor to be employed sufficiently has to be supplied with some tools and machines. The projects first selected should be such as can be executed with the help of indigenous tools and equipment. By and by the surplus labor can be used to make modern machines and tools.

Just as there is disguised unemployment of labor, there is also in such countries disguised unemployment of capital. Holdings are small; lot of capital equipment is lying idle and can be released for some other productive jobs. Also, by making fuller use of indigenous equipment as in the case of cottage industries, some modern machinery producing similar goods can be released for the more important jobs.

Reorganization of agriculture on co-operative lines or by consolidation of small and scattered holdings can release still more of idle labor and equipment. If the local projects benefit the people, who are asked to work on them, the people may be expected to work whole-heatedly and thereby benefit them­selves and benefit the nation.

But difficulties arise when the surplus labor has to work away from homes in distant industrial centers. The productive members of the family cannot now be expected to feed the members who have withdrawn. The surplus labor will now have to be paid a money wage and care will have to be taken to mobilize the consumable surplus. All problems of exchange economy will emerge. In the early stage of economic development, wage rates may have to be kept low enforcing a sort of compulsory saving.' Some system of deferred payments may have to be adopted. As we have already explained, measures will have to be taken, on the other hand, to see that the consumable surplus is not eaten up by increased consumption. Some element of compulsion will be required for achieving the objectives of economic development. In this respect, socialist and totalitarian countries are better placed than free economies.

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