from the mailbox: unemployed rich in Kerala

dec 23rd

more proof that amartya sen's "kerala model" is a crock.

it's the money-order economy, not land reform, that is sustaining the state. for, there was land reform in west bengal too, and it is rapidly sliding downhill in the per capita income tables compared to other states.

conclusion: marxist rule is bad, despite how much the true believers try to perfume that pig.

---------- Forwarded message ----------
From: Ra
To: rajeev.srinivasan@gmail.com

[This news item justifies your comparison of Kerala with Philippines economy]
                       

Remittances from abroad spawn a class of unemployed rich in Kerala

Pioneer News Service / Thiruvananthapuram The large-scale migration to the Gulf and several European countries has created a situation in which nearly one-fourth of Kerala's unemployed live in posh, well-equipped houses.

According to a recent study titled 'Unemployment in Kerala at the turn of the century: Insights from CDS Gulf migration studies' by a team from the Centre for Development Studies, the standard of living in the households of the 'unemployed-rich' is far better than those of the employed.

The study, done by Dr KC Zacharia and Dr Irudya Rajan, reveals that most of the unemployed have telephone connections; 20 per cent own two-wheelers, and 3 per cent have four-wheelers. A large majority of them have modern gadgets at home.

In 2003, households with the employed received an average remittance of Rs 7,163 while those with the jobless received Rs 8,303. "Although migration was 33 per cent higher in 2003 than in 1998, the impact on unemployment was lower -- 2.2 percentage points in place of 2.6 points.

The reason seems to be the larger number of unemployed in the general population in 2003. Only a relatively smaller per cent of them migrated. The number of the unemployed was 22.92 million in 2003 as against 12.46 million in 1998 - a sharp increase of 84 per cent. The number of the unemployed among the migrants was 6,21,354 in 2003 and 3,60,917 in 1998 - up by 72 per cent.

Migration has also helped in raising the proportion of the population with higher levels of education and, through this, raising the unemployment rate. The study finds that 24 per cent of the cash remittances were spend on education.

"A common aspiration among the youth of Kerala is to migrate to the Gulf countries, earn a lot of money; get married and settle down comfortably in Kerala. A high proportion of the Kerala migrants are unmarried youth," the study says.

"If they get money from relatives abroad, they may be able to remain unemployed for an extended period. Why should they work when they can live comfortably from the money received from abroad? This attitude has contributed to the high unemployment rate in Kerala. In other words, remittances have reinforced and raised the reserve price of the labour."

Unemployment increases with the number of emigrants in households going up. This phenomenon was observed in 1998 as well as in 2003. In both years, unemployment was higher in households with migrants than those without migrants.

The rate of emigration is higher among those with higher education. The unemployment rate is also higher among higher-educated persons. Therefore, the positive relation between unemployment and emigration could actually be a positive relation between unemployment and education.

In the early phase of migration to the Gulf from Kerala, the workers were mostly non-agricultural labourers with low educational level. The money they sent back accelerated construction industry, which generated jobs. Initially, emigration of skilled labour did not create any major problems back home, but their continued emigration resulted in a significant scarcity of skilled workers in Kerala.It is easier to find a plastic surgeon in Kerala than a good carpenter, says the study.

The study also throws some light to the increase in migration of labourers to Kerala from other states, for whom Kerala has become some sort of the Gulf. At present, Kerala has the highest wage rates in India. Increase in wages in agriculture, along with stagnant or declining prices of agricultural products, has resulted in the reduction of employment opportunities in agriculture.

The primary data were collected from 10,000 households of 225 localities selected at random from the 14 districts of Kerala.