Wage Rates, Labour Militancy, and Retarded Industrial Growth in Kerala

Two important regional factors - wage rates and labour disputes-are studied and are shown to have adversely affected industrial growth in Kerala. Through a multivariate model of wage determination it is shown that wage rates across industries and organisation categories in Kerala are much higher than in India and in other southern states. Left leaning scholars have therefore missed the point in underplaying the important adverse regional factors in the slow growth of industry in Kerala. The main factors that sustain high wage rates in Kerala are identified to be the high disposable incomes on account of remittances, and high wage rates in the agriculture sector. Indices of labour disputes also clearly show that the levels of labour militancy have been significantly higher in Kerala as compared to other competing regions.