Determinants of Wage Differences between the Inmigrant and Local Labourers in the Construction Sector of Kerala

The development paradigm of a nation is determined not only by its resource endowments but also by the potential of its people to enjoy quality lives. The level of skill of the population, employment opportunities and wages directly influence the quality of life, and thus the development of the nation. According to Adam Smith (1776: 44), “Labour was the first price, the original purchase money that was paid for all things. It was not by gold or by silver, but by labour, that all the wealth of the world was originally purchased.” Karl Marx further emphasised labour as the sole power which can create an additional value over its subsistence, establishing its predominant role as a factor input that increases the economic value of products. In the process, the mental or manual exertion of the labourers invested in the economic activity would display its unique traits as a factor of production and deserve rewards in the form of wage or remuneration. Equal wage for equal work in accordance with skill and dexterity assumes relevance in labour laws and labour contracts. It is constitutionally safeguarded as a fundamental right of every citizen in India.

While considering the employment sector of the labour market, one finds that migration is instrumental for the provision of labourers in every region. The development history of India also acknowledges the role of migration in diversifying the labour market with better wage and employment in accordance with the changing skill requirements. Article 19 of the Constitution safeguards the right of all Indian citizens to move and settle in any part of the country. The regional imbalances in the supply of labour result in the inflow of labourers in areas with shortage, thus increasing wage rate and improving economic benefits for labourers at the destination. Several studies and reports mention the major reason for labour migration as better employment opportunities at the destination states (Census of India 2011; UNESCO and UNICEF 2012). Internal migration is therefore an essential and inevitable part of the social and economic life of the country. As per Census of India 2011, internal migrants accounted for 39.7 million, or 3.31% of the total population of the country.