ECONOMY

Businesses reject $1,500 minimum wage for Saudi nationals

Business owners reportedly rejected a proposal to increase Saudi workers’ minimum wage to 5,800 riyals per month. (File photo: Reuters)

Business owners in Saudi Arabia have rejected a proposal to increase the monthly minimum wage for nationals working in the private sector to 5,800 riyals ($1,546).

The proposal “was not accepted” by business owners, said Nidal Radwan, president of the National Workers’ Committee, according to Aleqtisadiah. He did not specify which businesses had dismissed the idea.

The National Workers’ Committee was itself behind the proposal to hike the minimum wage for Saudi nationals, which currently stands at 3,000 riyals. In making the recommendation the committee cited the needs of employees and their families, average salary rates in Saudi Arabia and changes in the cost of living.

Its proposal was submitted at the second Social Dialogue Forum in Jeddah.

While Radwan said the proposal had been rejected, he said the relevant parties had agreed to talks to overcome challenges and offer better working conditions to Saudi workers.

According to Aleqtisadiah, the committee recommended reviewing the minimum-wage rates every two years, taking into account changes in the cost of living and other economic conditions.

“We feel that in order to lead a decent life, a worker needs a minimum of 5,837 riyals excluding luxury items and expenses such as the telephone and the internet,” Radwan told Aleqtisadiah.

“It is not surprising that employers find it difficult to change what has been the norm for the past 30 years. Therefore, we need rules and regulations that bind employers to pay the aforesaid minimum wages,” he added.

The minimum wage limit does not reflect general salaries in the labor market, said Ahmad al-Humaidan, Deputy Minister of Labor for Labor Affairs.

“The limit is set to improve market organization, to attract local and foreign investments, in addition to offering national employment jobs that can provide them a decent life, and fit their standards of living,” Aleqtisadiah reported the minister saying.

The next Social Dialogue Forum would focus on the role of women and the challenges they face in the industrial and food sectors as well as the retail sector, said Fahad al-Takhifi of the ministry of Labor at the closing session of the forum.

The number of Saudi female employees in the private sector has reached 160,000, reported the newspaper.

“Despite this [increase of Saudi female employees], the unemployment rate increased,” said al-Takhifi.

“In 2010, the unemployment rate was at 28 percent, and increased to 35 percent in 2011, this is a large surge,” he added.

Since 1992, the ratio of women’s participation in the Saudi national labor force has nearly tripled to 14.4 percent from 5.4 percent.

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Last Update: Tuesday, 28 May 2013 KSA 13:05 - GMT 10:05
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