Because of the endemic poverty of the rural areas, rural-urban migrants perceive the city as a place of employment. A severe shortage of wage-based opportunities has forced a vast majority of the migrants to take up a wide variety of jobs in the informal sector. Since they are not welcomed by the formal sector, they find self-employment through petty economic activities. It is the only way of earning a livelihood in the city. These migrants are mostly involved in building modern houses in Kerala, located in both the urban and rural areas. The migrant labor had a major impact in the labor market and also in altering the real estate developments in the state. Most of the migrants to the state come from far off destinations like Chattisgarh, West Bengal and Assam.
Self-employment opportunities in construction, trade, manufacturing, transport, food vending, domestic services and even small-scale cottage industries are common sources of income generation for the migrants to Kerala. The residential areas swarm with petty traders dealing with various goods and services.
However, in the absence of adequate and secure housing amenities, tens of millions of urban poor are forced to live in substandard dwellings that vary from single room rental structures to make-shift shelters built from assorted discarded materials. These squatter settlements and slums are mostly located in the urban village or on landed properties in the outskirts of the prominent cities. Public services such as potable water, sewerage and electricity are a pipe dream for such people.
It has been estimated that over 60% of the urban population in Kerala is not connected to municipal sewerage and water systems. The absence of such basic needs leads to many health problems especially related to the use of contaminated water. Such development in modern Indian cities and towns has produced wide disparities between the urban rich and the poor leading to social and economic inequalities.