Do rural migrants benefit from cities?

The events that led tens of thousands of workers to move almost in unison as part of a wave of reverse migration from cities back to their villages has left its mark on the nation. On foot, hungry, tired and penniless, these workers told us a reality that needs to be debated more, understood better and addressed in ways we have not done so far. In this two-part special series, Dr. Errol D’Souza asks a fundamental question -- do cities deliver anything useful to rural migrants?

 

Is migration to urban areas advantageous for rural migrants? The recent events as migrants fled for their villages as the pandemic struck are an opportunity for us to think about this question. Mostly it is assumed that cities play an important role as a conduit to get away from rural poverty. Yet my limited experience of working with underprivileged migrants indicates that cities fail them. Cities do provide opportunities to earn incomes but they are unable to provide a break from the past for successive generations of low skilled migrants and for most such families there is imperceptible progress in their standard of living. Even when they provide occupational mobility to discriminated against castes, that does not always transform into social or geographical mobility. Social background, including religious and linguistic credentials, still dominates the access to the location and quality of residence in our cities. We have evidence in Gujarat and in other States of underprivileged castes or religious minorities being refused the choice of purchasing or renting apartments or being quoted substantially higher prices and rents.

Cities do provide opportunities to earn incomes but are unable to provide a break from the past for successive generations of low skilled migrants and for most such families there is imperceptible progress in their standard of living.

Cities across the world were hubs of factories and industrialisation. As transportation costs for goods and people began to fall and with the growth of road networks, logistics, and containerisation, industry began to vacate urban centres. Globalisation spawned geographically dispersed supply chains that resulted in unbundling and offshoring of production that was organised to cater to shorter product life cycles. Firms began to differentiate their products to mitigate the impact of competition by making small functionality changes to products and rapidly phasing them out to feed dynamic consumer demand. Jobs that could be automated began to exit from city centres and supply chains responded by reducing production cycle times and increasing the speed of delivery to customers. The jobs that remained behind in urban centres were those that required unstructured cognitive activity or unstructured physical activity.

Those tasks for instance that require unstructured cognitive activity and involve problem solving capabilities, creativity, and intuition that characterise professional (accountants, bankers, lawyers, etc.) and technical occupations are difficult to automate and these stayed in cities with high pay being offered for those performing them. Similarly, tasks requiring unstructured physical activity such as visual and language recognition, situational adaptability, and in-person interactions such as blue collar tasks that are characteristic of food preparation, serving jobs, hospitality, cleaning work, in-person health assistance and jobs in security and protective services are also difficult to automate and continue to be offered as low wage jobs in cities.

Booming and prosperous cities replaced industrial jobs with services and paid more to those jobs that were relatively more intensive in skills.

To the extent that automation substitutes for low skill labour, the wage of low skill and mostly blue collar labour decreases and skilled labour that entails cognitive activity continues to enjoy gains. The wages and salaries of skilled workers then result in heftier earnings profiles. Booming and prosperous cities replaced industrial jobs with services and paid more to those jobs that were relatively more intensive in skills. The wage premium to those in skills bid up the price of urban real estate as their demand to be close to the city centre to avoid long commutes and to enjoy better urban amenities grew. The less skilled who cannot pay high rents had to move elsewhere and began to inhabit slums or worse still stay on streets or pavements. Their growth in incomes did not keep pace with the higher growth in rentals for housing or real estate prices.

Limitations of location and infrastructure in cities drove up the price of urban space and house prices rose at a faster rate than wages for those who are unskilled. Urban populations increased through in-migration and a natural increase in population. The first stage of the demographic transition is where increases in population are propelled by a decline in death rates stimulating a natural increase in urban populations apart from that stemming from migration. The growth in vaccination, the discovery of antibiotics for major diseases, and the dissemination of medical knowledge and embryonic public health facilities reduced death rates significantly in developing countries.

Individuals living in slums experience abysmal living conditions as they are poorly covered by public infrastructure services.

Across the world it has been the case that death rates in slums are almost as low as in non-slum areas but birth rates are significantly higher resulting in increases in slum population being led by natural increases in population. An amenity of higher life expectancy that is provided by better health outcomes available in cities triggers slum growth and congestion. 

Individuals living in slums experience abysmal living conditions as they are poorly covered by public infrastructure services. Apart from infrastructure, living conditions are impacted by housing quality, as well as neighbourhood and location, and tenure. The availability of piped water through a yard tap or via an in-house connection, individual latrines, paved internal streets in the local neighbourhood, access to working drainage, the structure of external walls and floors of housing, neighbourhood safety and density, security of tenancy and protection from land grab sharks, travel and time cost of getting to the place of work – all of these matter. Given the disamenities on all these counts and that it is common to have many individuals share restricted space that is allocated between themselves via work shifts, it appears that for the poor, rentals are high and they are paying a “premium” for the living conditions that they inhabit. Those who cannot afford this “premium” end up staying in the open on the streets.

 

Part II

Cities must attend to the needs of the less skilled

Rural migrants end up living in poor housing, often slums which have abysmal living conditions with little or no public infrastructure to support them. For the poor, what this amounts to is paying a premium for the poor living conditions that they are forced into.

Wages that are unable to cover for expensive housing costs leave little surplus for other expenditures and remittances. It is not surprising that those who migrate with lesser skills cannot generate surpluses that can be invested in upward mobility. An important resource that will provide their families with inter-generational mobility is access to good quality education and health. In our experience, there are many instances of families that choose lower quality housing including living in slums so as to release funds to invest in the education of their children. The inability of governments to invest in the capabilities of providing these core services has failed these families. Children instead of being in school are often begging or street vending and many even get entangled in criminal activity.

Wages that are unable to cover for expensive housing costs leave little surplus for other expenditures and remittances.

Half of humanity lives in cities today and almost all the urban expansion in the next few decades is going to take place in the developing world. Yet one in four urban residents across the world live in slums and the share is much higher in developing countries – it is 24 per cent in India. Rapid urbanisation will put pressure on water supply, sewage, public health, the living environment will be affected by carbon emissions from energy consumption, and urban dwellers in the country will increasingly be breathing unsafe air and dying from ambient air pollution. In all of this, the poor have a high chance of being made scapegoats for the wider structural problems that will be encountered. They often get blamed for the lack of sanitation and poor infrastructure whilst urban authorities continue to struggle to deliver public services that make cities livable and to invest in the future of their citizens.

The poor often get blamed for the lack of sanitation and poor infrastructure whilst urban authorities continue to struggle to deliver public services

Demolition and displacement is often advanced as a solution rather than upgrading strategies and freeing up public land for housing stock. Residents in slums would benefit from the provision of piped water that would reduce their outlays on water of questionable quality, improved drainage requires less to be spent on house repairs and reduces their susceptibility to waterborne diseases that increases expenditures on health, enhanced street lighting reduces crime, etc. All of these if designed with features that are deemed desirable to the beneficiary and implemented with sincere regard for time and cost overruns can even secure the consent from such communities to pay for a part of the total project cost from the costs it saves them for seeking substitutes for the provision of such amenities.

The success of cities will depend to what extent they provide inclusive resolutions to the conditions of work and habitation of the less skilled

The future of urban areas is that of continued growth accompanied by a growth in incomes for those who are skilled. Work requiring unstructured material activity that cannot be automated will be in demand but may not pay enough to enable a living wage and a vast majority of migrants to urban areas will be in that space. The success of cities will depend to what extent they provide inclusive resolutions to the conditions of work and habitation of the less skilled so as to improve the sustainability of cities and their residents. Cities will increasingly become crowded and will experience both the benefits and the hazards of urban density. The benefits of productive income generation will increasingly have to be traded off with the drawbacks of congested roads, impure and inadequate water supply, and air pollution amongst others.

Providing infrastructure, improving regulation, and building a politics that involves amenities for all sections of the population will be crucial for their sustainability. Otherwise there is a high chance that the way cities will promote their continuation will be via repression. Blue collar workers will then resort to hustling via opportunistic practices given the vulnerabilities and adversities they face from a lack of institutional attention to their problems. With expanding value chains, the emphasis in policy has been on removing tariffs and regulatory barriers and reducing transactions costs on handling goods and the ease of doing business. This will further increase trade and feed growth including in peri urban areas.

Migration will not be beneficial for those from rural areas except for giving them possibly the benefit of urban anonymity and a temporary source of purchasing power.

For the vast majority who perform jobs involving unstructured physical activity, however, their sustainable future depends amongst other things on improved access to finance and investment in education that is crucial to enable their participation in the high skill specialisation patterns of growth that will emerge over the coming decades. Without these interventions the answer to the question we began with is that migration will not be beneficial for those from rural areas except for giving them possibly the benefit of urban anonymity and a temporary source of purchasing power. It will not be a sustainable solution to their search for better opportunities and livelihoods. 

(Dr. Errol D'Souza is a Professor of Economics and the Director at the Indian Institute of Management Ahmedabad. He is Director, Shram Sarathi, Udaipur, Member, CMC Vellore Council, and on the Board of Governors of NIPFP, Delhi) 

 

(The above was published as a two-part series in some papers and as a large single column in others)