3 Real rural wages have been contracting for four months now
Monthly data on rural wages is the only government statistic to track labour markets on a high-frequency level. Given the practice of large-scale rural migration of unskilled workers, rural wages are considered to be a good proxy of conditions in urban labour markets as well. Real rural wages have been contracting continuously between August 2020 and November 2020 − the latest period for which data is available. When read with the fact that the October and November contraction has come on the back of an already low base, real rural wages contracted continuously between October 2019 and March 2020, the situation seems to be even more alarming. That non-agricultural wages have been falling at a faster pace than agricultural wages suggests that continuing weakness in urban markets – it is non-agricultural work which these labourers go and perform in cities – might be generating headwinds for wages in rural areas.