What Constitutes Employment?

Within the contents of this literature review the aim is to explore what constitutes employability. This will be done by examining papers that have looked into different aspects of employment, including what it means different countries such as India, Great Britain, Denmark and Germany.

This literature will also look into the definitions of being a worker, employee and self-employed and whether there are links between the definitions across all these countries. (I KNOW IT IS LACKING) (I'M NOT SHOUTING)

Introduction

Employment is a huge part of our lives; our lives are based around it but what does being employed encompass? Working a job for a company is not as simple as it sounds, for example, the employer will have to make the employment official by legal legislations which include a lot a paperwork such as contracts.

Contracts are a legal piece of paperwork between an employee and the employer which take immediate effect as soon as the offer of employment is accepted.

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Within the contract it must include the legal rules and regulations, the employee's job title and description, the contracted work hours for the individual employee, the payment including holiday and sickness pay, and the employee's pension must be stated.

With all this said the employee must give the appropriate time notice before leaving the company. If this legal document is breached, by either the employee or the employer, it can result in serious action being taken.

Worksmart (2018) investigates the differences between being a worker, an employee or self-employed. Firstly, an employee is legally offered work on a regular basis and this must meet the employees contracted hours, that have been agreed by both the employer and employee.

The employer is also obligated to inform the employees of the time and location of the work, as well as the necessary equipment that are required to complete the job at hand. The employer also has the responsibilities to pay tax and national insurance on behalf of all their employees.

If an employee was to violate the rules there have been agreed upon within their individual contract, then the employer has the rights to go forward with the appropriate disciplinary procedures, this can also be the case if the employee lacks a satisfactory work ethic. (Worksmart, 2018)

When the online source describes what classes you as a worker they talk about the person being contracted to do work directly, but the person contracted is not an employee, unless that person is running their own business. If someone is supplying goods freely or providing service to their own customers then they are a most likely a worker. Being a worker means you are eligible for minimum wage, holiday pay and other working time rights. (WORKSMART 2018).

The same online source describes being self-employed as running your own business which allows you to be free, be your own boss, decide when you work, maybe even get someone else to do your work so you do not have to, the work can be done around your life, you are in control of your own sickness and holiday days, but you have to pay for your own tax and national insurance. Even being self-employed you can still be contracted to provide work service to the employer which means you will have a contract for services. (WORKSMART 2018).

Within an academic journal Joan Robinson distinguished the differences of John Maynard Keynes and Michal Kalecki's theories of employment. Joan clarifies that "without any contact either way, Michal Kalecki had found the same solution·The interesting thing is that two thinkers, from completely different political and intellectual starting points, should come to the same conclusion"(Turner, 1989, p. 63).

In this paper the author discusses not only Kalecki and Keynes identical solution on the principle of effective demand, but also whether they both came up with the same explanation of why there is not an automatic market system, to guarantee full employment every time the investment spending in the entrepreneurial economy declines.

It was in 1933 Kalecki first published his theory of employment and the research starts from Marx-"the only economics he had studied" (Turner, 1989, p. 63). Finding the distribution of income between capitalists and workers is a key role in Kalecki's mechanism, Keynes however, tried to explain to other economists the mistake of the classical theory of employment. Keynes's (1936, p. 3) idea was to demonstrate why the orthodox theory was simply a "special" case of the general theory.

Keynes (1936, p. 32) realised the "great puzzle of Effective Demand live[s] on furtively, below the surface in the underworld of Karl Marx [and] Silvio Gesell." Keynes (1936, p. 355) disputed, even though effective demand issues were hidden in Marx's theory, "the future will learn more from the spirit of Gesell than from that of Marx."

From Keynes perspective what was needed in Marx's but was included in Gesell was an analysis where "the rate of interest is purely a monetary phenomenon and that the peculiarity of money, from which flows the significance of the rate of interest, lies in the fact that its ownership as a means of storing wealth involves the holder in negligible carrying charges" (Keynes, 1936, p. 355-356).

Kalecki's theory of estimating the national income or the national gross product as it is also known as, focuses on the distribution of income and the amount spent on tendencies of capitalist face to face workers, where the firms have some power to control. Kalecki (1971, p. 96) derived a formula to work out changes (Y) in the national income:

dY=[dI]/[(1?aq)(1?q)]

The equation above is corresponding to Keynes's investment multiplier with the most recent copy from Kahn's 1931 multiplier formula (Keynes, 1936, p. 115). However, Kalecki (1969, p. 73) stated his disagreement "the rate of interest cannot be determined by the demand for and the supply of capital because investment automatically brings into existence an equal amount of saving.

Thus investment 'finance itself' whatever the rate of interest." So going back to what Joan Robinson said, when she said Kalecki "had found the same solution" she meant Kalecki independently formed the same concept for the investment multiplier as Kahn, as Keynes purely altered Kahn's employment multiplier which is in terms of employment measurements into a payment multiplier (Keynes, 1936, p. 115) uses the unit terms of either nominal or money-wage.

Kalecki's description of unemployment is the up and running controlling product market that does not decline if and when the investment spending declines. For example, Kalecki's simplest model, workers spend all their wages which means if investment spending is cut down then all profits decrease to the equal sum of the loss in investment spending as well as the reduced capitalist consumption.

Kalecki mentions, "In the capitalist system·the price-cost relationship·is maintained and profits fall by the same amount as investment plus capitalists' consumption through the reduction in the output and employment" (Kalecki, 1971, p. 97).

Kalecki discussed that full-time employment would remain even if the investment spending decreased, making workers discharged from the investment department and then employed in the food department. "The increased supply of these [consumption] goods would be absorbed by means of a reduction in their prices [without any reduction in money wages] ·.full employment would be kept during the reduction in prices in relation to costs" (Kalecki, 1971, p. 97).

Kalecki's system implied that when investment spending falls in the capitalist economy full employment may not be effected, if prices fall close to the costs it would reduce the amount of control in the product markets, meaning that full employment will not be effected by the highest competition in the market.

Recent New Keynesian theories indicate the main reason for unemployment is due to the lack of competition in the product markets, speculation in the financial markets as well as including the expectations around unlikely and unreliable statistics about the upcoming future.

In an article discussing on what determines employment in India Tripathi (2018) explains how the prime minister of India is trying to increase the manufacturing activity and job creation in the country by increasing factory or industrial production to make more jobs available for the youth to reduce the number of unemployed or under employed.

The last economic survey that was taken shows that roughly 3.5 thousand jobs were created, mainly in textiles, auto and metal industries during April - June 2015. The economic survey taken in 2017 highlights the jobless growth that occurred the highest in 2004-2012, the Indian government hopes to increase the contribution of manufacturing in the national economy to 25% from where in previous years it was 12%.

The National Manufacturing Policy aim to create 100million jobs by 2022, by promoting growth of micro, small and medium enterprise (MSME). In 2014 the number of jobs created raised to 2.75 thousand between July and December, this was discovered by a labour ministry survey.

The government have also set up multiple schemes to reduce poverty and vulnerability of urban poor households by giving the persons the opportunity to gain self-employment and skilled wage employment opportunities which will enable them to achieve a better life on a sustainable basis. A study shows that 92% of workers are engaged in informal employment, earning very little with limited or no social protection.

The author cites how the total reduction in employment had drastically dropped during 2004-2005 and again between 2009 and 2010 because the large withdrawal of the population from the labour force and the slowly increasing employment in the non-agricultural sector.

Chowdhury (2011). Chowdhury's paper also tells us that the amount of education among the youth is a positive development even though the labour force participation rate has declined. Mehrotra et al. (2014) wrote a paper which estimates approximately 17million jobs a year will need to be available in non-agriculture employment.

While stating this, Maiti (2015) discovered that employment in India has to face major factors such as economic crisis, industry demand and jobless growth. The India Labour and Employment Report (IHD, 2014), informs us that India's employment scenario is appalling regardless that India is named as one of the most important rising economies in the world. The population to labour-force ratio tells us 56% of people aged 15years and above is low in India when compared to the rest of the world.