Wage woes

Wage woes

Inflation, low salaries and expensive loans have struck Bahrain’s low-income population hard. Unions have called for a minimum wage, but Bahrain’s BCCI hasn’t answered favorably.

October 27, 2008 9:44 by kippreport

The struggle to impose a new minimum wage for Bahraini and expatriate workers has been reignited. The General Federation of Bahrain Trade Unions (GFBTU) claims that rising inflation has forced the federation to renew its call for a minimum wage for Bahrainis working in both the private and public sectors. In November 2007, The Bahraini government succumbed to public pressure and imposed a minimum wage of BD215 (AED2094) for its citizens working in the public sector, but unions say more needs to be done.

“There is massive inflation,” said Ebrahim Hamad, GFBTU deputy secretary general, “and in many cases, while salaries for workers in the public and private sectors have remained far below the BD400 (AED3900) the government itself suggested after a survey for years ago, prices of essential commodities have gone up by between 50 and 70 percent.”

A study conducted by the Labor market Regulatory Authority (LMRA) found that 64.2 percent of all new jobs for Bahrainis in the private sector were offering salaries less than BD250 (AED2435) a month, reported Gulf News Daily.

The GFBTU aims to increase the minimum wage for Bahrainis to BD400 (AED3900) in a bid to cope with rising inflation.

The reaction from the Bahrain Chamber of Commerce and Industry (BCCI) hasn’t been good. Not only have they rejected the call for an increased minimum wage for Bahrainis across the board, but also for expatriates working in the kingdom. The BCCI has stated that salaries should not be governed by institutions, but rather by the market’s supply and demand.

Majeed Al Alawi, Bahrain’s labor minister, explains further: “We have to appreciate that the imposition of a minimum wage would mean that half of the establishments in Bahrain would shut down.”

Al Alawi also stated that Bahrain will only consider a minimum wage for workers if other GCC nations do the same. Bahrain’s development is heavily dependent on cheap foreign labor, which a minimum wage for expatriate workers will jeopardize.

Ultimately, it is unlikely Gulf nations will increase their own bills for the sake of appeasing labor unions. In fact, given the global credit crisis and the falling price of oil, GCC nations are more likely to cut their costs, not increase them. Bahrainis and expatriates workers will just have to wait for a better time to approach the government and the BCCI with their salary woes.