Wage Inequalities in India

The standard of living of most of the people in India is determined not only by employment but also by the wage rate that goes with such employment. However, the labour market is a highly segmented one, leading to wage inequalities of multiple kinds. Detailed analysis of data shows that rural wages are lower than urban wages, and women’s wages are lower than men’s irrespective of location and the nature of labour status, that is, casual or regular. Casual wages are lower than regular wages. But then a powerful factor overwhelming all these characteristics is the level of education. We combine all the major segmenting characteristics of the labour market to produce a comprehensive picture. While education emerges as a powerful factor, there are other characteristics that either restrict or enhance the chances of a higher level of wages, such as social identity, locality, and gender. The result is what we call ‘a long tail of wage inequality’, where the lowest category predominantly consists of women from SC or ST sections with less education, rural residence, and employed as casual workers.