Labourers win 20% wage hike

Construction workers in Dubai will be awarded a 20% pay rise to compensate for increasing living costs (Getty Images).

Contractors in Dubai have raised wages of labourers by up to 20% following strikes this month over salaries linked to the declining dollar, the Middle East Economic Digest (MEED) reported on Friday.

"We assessed the rate of inflation and exchange rate fluctuations and took the decision to raise wages by 20% with immediate effect," one unnamed contractor was quoted as saying by MEED.

The United Arab Emirates dirham is pegged to the dollar, which has hit record lows against the euro and a basket of major currencies this month, reducing the amount of money labourers could send home.

Arabtec Holding, one of the contractors building the Burj Dubai project that includes the world's tallest skyscraper, reached a settlement last week after up to 35,000 workers protested for 10 days over wages.

It did not disclose the details of the settlement, which included a wage increase, but said it expected the settlement would increase its costs by 1%.

"After repeated calls for the government to impose a minimum wage, a group of contractors ... have decided to deal with the issue by agreeing to increase workers' wages to compensate for rising living costs and currency depreciation," MEED said.

South Asian labour, mainly from India and Pakistan, is the backbone of the construction industry in Dubai, the Arab world's commercial hub and one of seven emirates comprising the UAE federation.

UAE Central Bank Governor Sultan Nasser al-Suweidi said on Thursday the country is under mounting social and economic pressure to unshackle its dirham from the dollar to contain inflation, which hit a 19-year high of 9.3% last year.

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Posted by langyaw, Dubai, United Arab Emirates on Sunday 18 November 2007 at 12:00 UAE time


The labor force has finally put across its point with convincing force. If their managements had only listened with their hearts and not just their ears, downtime losses would have been avoided, and timetables unaffected. All these are water under the bridge, but one can almost foresee the next possibility in the UAE - "Labor Unions". Without anyone standing up and voicing out their concerns, the labor strikes were inevitable. Now that a clear precedence has been set, and an outstanding example of how a united workforce CAN bring out the changes desired, UAE's workforce now know the Achilles' heel of businesses.  
The crying need at the moment is for businesses to seriously consider reviewing and UPGRADING the low- up to mid-range (4-digit salary levels) AND for government to move to reduce prices of rent and commodities. The latter action should not be a problem, given the wealth of cerebral power among consultants and technocrats in the government's payroll. The former action can be achieved, however, only by some soul-searching on the part of business owners. 
-- langyaw

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