Political economy of labour and development in Kerala : some reflections on the dilemmas of a socially transforming labour force in a slow growing economy
Kerala is well-known for its achievements in the sphere of social
development that includes a rapid and high level mobilisation and
organisation of workers regardless of location and sectoral occupation.
However such a process of social development without a commensurate
transformation of the productive sectors has presented Kerala with some
major dilemmas. This paper therefore takes a critical look at the political
economy of labour and development by examining the roles of labour
unions, state, and capital. The three dilemmmas relate to (i) technological
choice in the face of high and rising labour costs in labour-intensive
activities for maximising long-term growth and employment, (ii)
mismatch between labour-supply and labour demand as a result of
changing job expectations of the younger generation in a technologically
stagnant economy, and (iii) lack of new investment despite growing
loanable funds and declining resistance to technological change. The
failure of labour unions to agree to productivity improvements through
technological changes and increasingly resorting to 'closed shop'
strategies has been particularly emphasised.
JEL Classification : J38, J51, J58
Key words: unionisation, labour unions, technological change, labour
productivity, cooperatives, unemployment, labour-intensive activities,
dilemma, economic liberalisation, poor-relief, wage cost, political and
social development, economic growth