The issue of establishing minimum wages for foreign workers in Saudi Arabia is bubbling up again. Both Arab News and Saudi Gazette/Okaz report on the issue.

Expats seek fair work contracts

Expatriates are calling for fair contracts that specifies a minimum wage and payment of iqama renewal fees, insurance premium and a foreign labor fee recently imposed by the Ministry of Labor by the employer.

The labor ministry decision to impose the fee of SR 2,400 on expat workers have forced them to look for better contracts. Some expatriates who have contracts that do not include iqama renewal and insurance fees will not be able to pay the new foreign labor fee.

A report issued by the IFC, World Bank and Price Waterhouse Coopers says Saudi Arabia has the world’s third least demanding tax framework for corporations.

Saudi Gazette/Okaz runs a piece that notes how a minimum wage for expat workers is necessary for reducing unemployment among Saudis. Young Saudis don’t want to work for peanuts; foreign workers are paid peanuts. As long as it’s cheaper to hire the foreign worker, companies will continue to do so. Setting a minimum wage across job categories rather than basing salaries on what passport a worker holds will make the work more attractive.

It will also, necessarily, make life more expensive. Whether the country wants to pay the price — or can afford the price — is a political decision that will have to be made sooner or later. Sooner would be best.

Saudization and minimum wages for foreigners
Saeed Al-Siraihi
Okaz newspaper

When Labor Minister Adel Fakieh was mayor of Jeddah, Okaz hosted him in an exclusive dialogue with its reporters and writers. I remember I said to him that the residents of Jeddah would not be content with him unless he achieved for the city the same success he had with private company of which he was chairman. He was able to save that company from the huge losses it was incurring and made it one of the biggest and most successful firms.

If I had an opportunity to meet him again I would say the same thing to him. The young men and women who have long been living under the nightmare of unemployment while seeing the big companies and small establishments import manpower from the four corners of the world will not be happy with him unless he achieves similar success in the Saudization of jobs.

Though it seems that the minister is taking steady steps on this road regardless of the challenges being created by the businessmen who are infatuated with foreign recruitment and who have no regard for the Saudization process, his success in the program of Saudization will not be realized unless a minimum wage for foreigners has been fixed. The low payment is the sole reason that tempts businessmen to import foreign manpower. The minister himself had said there were more than 4 million foreigners in the Kingdom whose monthly salaries were less than a thousand riyals.

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