This study is an investigation into the real wage rates of casual labourers in Shillong, the capital city of Meghalaya. First, trends in nominal wages during 1997-2000 have been studied. Then the consumption expenditure of casual labourers on wage goods is analysed and finally, changes in prices of wage goods and the cost of living have been investigated during the same period. Sources of data are the primary surveys conducted by the authors. We have found that wage rate (of a general casual laborer) is about Rs. 60 per day, which in case of an unskilled laborer is about Rs. 47 only. With each of the two working members getting some job for 22.5 days in a month, an average casual labourer household earns Rs 2565 (Rs. 475 per capita per month). For an average unskilled casual laborer household these figures are Rs. 2000 and Rs. 372 (per capita). ILO (1996) defines subsistence wage as the hourly wage sufficient to buy one kilogram of the lowest-priced staple cereal. The price of 1kilogram of rice (the staple cereal in the study area) varied between Rs. 8.5 to Rs. 10.0 during 1996-1998. The range was Rs. 10 to 11.5 in 1998-2000. The upper limit of daily wage rates of unskilled casual workers was Rs. 50. Work hours (per day) were 7 to 8 hours. From these figures, the hourly wage rate works out to be Rs. 7.0 or less, which cannot buy 1 kilogram of rice. Thus, casual laborers in Shillong earn only a subsistence wage. Rice and house rent are the first two major claimants, accounting for some 40 percent of the total expenditure on wage goods. Beef, fuel and pan (+betel nuts) are the next significant claimants accounting for an additional 24 percent of the total expenditure. Potatoes, onions and vegetables together claim for some 9 percent and sugar, tea and milk together account for about 7 percent of the total expenditure. Fish, beef, meat (includes pork and mutton), potatoes, onions, vegetables and mustard oil together claim for a little over 30 percent of the total expenditure. In the later half of our study period, wages of unskilled labourers have systematically lagged behind the increase in the cost of living index. Wage rates of unskilled labourers have increased by 11 to 12 percent while the cost of living has increased by 20 percent during the study period. Wage rates of skilled labourers, which increases by (about) 80 percent or so, succeeded at overpowering the increase in the cost of living. The unlimited supply of unskilled casual labourers from the rural Meghalaya, Nepal, Bihar, Bengal, Bangla Desh, Assam, etc to Shillong has kept up an excess supply of unskilled casual labourers. However, that is not the case with the skilled casual labourers. Additionally, urbanization, development and rise in secondary and tertiary sector activities in Shillong has created jobs for skilled casual labourers more in proportion than that for the unskilled casual labourers.
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number
1810.
Find related papers by JEL classification: J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials R10 - Urban, Rural, and Regional Economics - - General Regional Economics - - - General
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Arora, Ashish & Arunachalam, V. S. & Asundi, Jai & Fernandes, Ronald, 2001.
"The Indian software services industry,"
Research Policy,
Elsevier, vol. 30(8), pages 1267-1287, October.
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