Open In App

Forms of Employment: Self and Wage Employment

Improve
Improve
Like Article
Like
Save
Share
Report

People do a wide range of jobs to earn a living. Work significantly impacts our lives as individuals and as members of society. Some people work on farms, in factories, banks, shops, and a variety of other workplaces, while some work from home. Work at home includes not only traditional work like weaving, lace making, or a variety of handicrafts but also current jobs like programming work in the IT industry. Earlier factory work meant working in factories located in cities, whereas now technology has enabled people to produce those factory-based goods at home in villages.

In economics, employment refers to the state of having a job or being employed. If one has to employ someone, they must pay them. The person who hires people is known as employer, and the person who is getting paid for providing the services is known as employee. Employers may include individuals, businesses, etc. People can work for themselves and run their own businesses as self-employed individuals.

Employment can be either in the form of Self-employment or Wage Employment.

Forms of Employment

Forms of Employment

 

1. Self-employment:

Sel-employment is an arrangement in which an employee or worker earns a living using his own resources. Therefore, a worker who owns and operates an enterprise to earn their livelihood is known as self-employed. Around 52.2% of the total workforce of India are self-employed. 

Self-employment is a major source of livelihood for people and includes use of an individual’s own land, capital, labour, and entrepreneurship. For example, traders, businessmen, shopkeepers, vendors, etc.

Self-employment is a significant source of income in India because : 

  • A low literacy rate means a poor acquisition of skills for wage/hired jobs.
  • Due to the diversified social environment, there is a lack of mobility.
  • In India, wage employment is declining.

2. Wage Employment:

Wage Employment is an arrangement in which a worker earns wages by selling his labour. Under this form of employment, a worker is known as an employee or hired worker and the buyer of labour is known as an employer. Unlike self-employment, the workers have their own labour as a resource, instead of land, labour, capital, etc. Therefore, these workers offer their labour services to others and get wages in return. For example, if a tutor runs his own tuition centre then it is known as self-employment; however, if the same tutor teaches at a school, then it is known as wage employment. 

Wage employment is divided into two parts; viz., Regular Workers and Casual Workers.

i) Regular Workers or Regular Salaried Employees:

When a worker is engaged by an individual or a business firm and gets wages in return for their service/labour regularly, then such workers are known as regular salaried employees or regular workers. Such types of workers are hired permanently and besides wages, they also get social security such as provident fund, pension, health insurance, etc. India’s total workforce consists of around 22.8% of regular workers. Some examples of regular workers include teachers, civil engineers working in a construction firm, professors, doctors working in a hospital, etc.

ii) Casual Workers:

When a worker is casually engaged by an individual or a firm and gets remuneration in return for the work done, then such workers are known as casual workers. These workers are not hired on a permanent basis; therefore, they do not have a regular income, job security, social benefits, and protection from the government. India’s total workforce consists of around 25% casual workers.

Distribution of Employment in India (2017-18)


Last Updated : 01 May, 2023
Like Article
Save Article
Previous
Next
Share your thoughts in the comments
Similar Reads