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Normally, growth of a country is measured by GDP growth. A surging GDP is a good indicator of nation's economy.
GDP is due to factors of production like land, labour, capital and businesses.
Taking other factors as they are, labour is a very dynamic economic identity. The variance within the 'labour' is too significant to be ignored. An illiterate fella as well as a PhD, both are labour.
A nation can have good growth without fully utilising her labour. This is when we have a condition of joblessness. Eg. An African agricultural country can equally have good growth if she adopts new technology in place of man-labour.
With significant improvement in our literacy rates, the traditional vehicles of growth in India can't absord the newly educated labour entrants to the job market. Neither are these people willing to take jobs in agriculture and construction sector, currently the growth vehicles. Result is, they remain unemployed because there's not enough avenues in govt or private white collar sectors
This is a situation of jobless growth. Growth without corresponding employment generation.
How does growth happens? If a pakoda seller sells 100pakodas in a day, then growth of 10% mean he needs to sell 110per day.
How will he achieve that.. many ways..
Use more efficient cooking machine =>Means demand of the machine increases, so the industry producing such machines will go through this same logic..and ultimately you will see either <=10% increase in labour is required for producing more pakodas.
Or hire a helper to quickly fry the pakodas in lesser time.
Will need ~10% more flour/besan, so demand of flour will increase this will also require more farm labour.
The activity of increasing 10% more pakoda will involve all primary(flour, oil, onion), secondary ( more Kadhayi, more LPG production, more cooking oil manufacturing, more flour mill ), and tertiary ( more transportation of flour, more delivery of pakodas, more customers service by waiters).. all these activities will involve more LABOUR!
I hope you get the point how GROWTH in any economic activity does require more labour/capital/land. So this way growth rate does have direct relation with labor demand but which Economic model applies and how much is beyond me.
Normally, growth of a country is measured by GDP growth. A surging GDP is a good indicator of nation's economy.
GDP is due to factors of production like land, labour, capital and businesses.
Taking other factors as they are, labour is a very dynamic economic identity. The variance within the 'labour' is too significant to be ignored.
A nation can grow without fully utilising her labour. This is when we have joblessness. Eg. An African agricultural country can have good growth if she adopts new technology in place of man-labour.
With significant improvement in our literacy rates, the traditional vehicles of growth in India can't absord the newly educated labour entrants to the job market. Neither are these people willing to take jobs in agri kr construction sector. Result is, they remain unemployed.
This is a situation of jobless growth.
PS - yet to come across any math equation.
+1 I didn't notice this reply earlier...
GDP growth does correlate with labor, but how this growth occured(which sector/domain grew) is very crucial factor in determining how much labour absorption was there. That's why you would keep reading labour-intensive vs capital-intensive sectors....
GDP growth=> investment growth =>new capacity building(factory or expansion)=>labour growth or GDP growth=> investment growth=>increase in salary(skill development)=>demand increase=>labour growth
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Comments
GDP is due to factors of production like land, labour, capital and businesses.
Taking other factors as they are, labour is a very dynamic economic identity. The variance within the 'labour' is too significant to be ignored. An illiterate fella as well as a PhD, both are labour.
A nation can have good growth without fully utilising her labour. This is when we have a condition of joblessness. Eg. An African agricultural country can equally have good growth if she adopts new technology in place of man-labour.
With significant improvement in our literacy rates, the traditional vehicles of growth in India can't absord the newly educated labour entrants to the job market. Neither are these people willing to take jobs in agriculture and construction sector, currently the growth vehicles. Result is, they remain unemployed because there's not enough avenues in govt or private white collar sectors
This is a situation of jobless growth. Growth without corresponding employment generation.
PS - Yet to come across any math equation.
If a pakoda seller sells 100pakodas in a day, then growth of 10% mean he needs to sell 110per day.
How will he achieve that.. many ways..
Use more efficient cooking machine =>Means demand of the machine increases, so the industry producing such machines will go through this same logic..and ultimately you will see either <=10% increase in labour is required for producing more pakodas.
Or hire a helper to quickly fry the pakodas in lesser time.
Will need ~10% more flour/besan, so demand of flour will increase this will also require more farm labour.
The activity of increasing 10% more pakoda will involve all primary(flour, oil, onion), secondary ( more Kadhayi, more LPG production, more cooking oil manufacturing, more flour mill ), and tertiary ( more transportation of flour, more delivery of pakodas, more customers service by waiters).. all these activities will involve more LABOUR!
I hope you get the point how GROWTH in any economic activity does require more labour/capital/land. So this way growth rate does have direct relation with labor demand but which Economic model applies and how much is beyond me.
Sorry for using pakodas, it is trending so...
I didn't notice this reply earlier...
GDP growth does correlate with labor, but how this growth occured(which sector/domain grew) is very crucial factor in determining how much labour absorption was there.
That's why you would keep reading labour-intensive vs capital-intensive sectors....
or
GDP growth=> investment growth=>increase in salary(skill development)=>demand increase=>labour growth
Thanks.
In investment terms : c+g+(x-m)
Now vary the variables , and growth will vary. Ryt bosses ??
common sense is seriously lacking aajkal.hehe