Unemployment and Income Distribution

By: EconomyWatch   Date: 14 October 2010

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Unemployment and income distribution are two well-linked concepts. The word unemployment points to a situation whereby the individuals do not have jobs and the term income distribution implies the distribution of income among people. In most of the countries it has been seen that these factors have assumed serious propositions and have become major socio-economic problems. The situations of unemployment and income distribution are extremely acute in the economically developing, as well as, under-developed countries.

In these countries it is observed that there are two basic sectors where there are some employment opportunities – they are the primary or conventional sector, which is known as the agricultural sector and the secondary or industrial sector.

It has been observed in these economically underdeveloped countries a substantial portion of the workforce is engaged in the agricultural sector. What happens in this case is that these people are unskilled and the seasonal nature of the agricultural activities makes them seasonal workers, who face seasonal and disguised unemployment as a result.


There is a very high and regular incidence of these forms of unemployment among the laborers in the agricultural sector. The problems in the industrial sector are different from the agricultural sector as far as the laborers are concerned. The industries in the third world countries do not use the high end technological resources that are in use in the economically advanced countries.

As a result they are unable to utilize whatever skilled human resources they have. This means that not all workers are gainfully employed in the industrial sector and this means that the pattern of income distribution is irregular.

Income distribution irregularities can also occur because of the fact that the income gets concentrated in the hands of a particular group of people only and the rest remains disadvantaged from an economic point of view. The worse side of this situation is that this situation continues for a number of generations.

However, there are ways in which such situations may be eradicated. One of the major roles that may be played in such situations is that of the government that can take active initiatives to address these problems. They can institute programs that are effective in increasing the work potency of the unskilled labor force that is available in a country. Liberalization of the market regulations may also be attempted so that more job opportunities are created. Minimum wage limits should also be established so that the workers are not exploited. The governments should also look at developing the indigenous technological resources so that the available work force may be utilized in a better manner. The job market should also be diversified so that the number of job opportunities goes up.


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