Fair wages the bottom line

As long as construction labourers are earning US $7.60 (AED28) a day in the UAE, the leading lights of the construction industry in the Middle East can expect periodic strikes and labour unrest like the brouhaha recently involving workers at the Al Hamra Construction company.

Complaints among labourers at Al Hamra may have been about food but the core issue that sparks such violence can usually be found in poor wages.

Yet there are few people who believe for a second that a minimum wage standard is coming to the UAE. That's like expecting the Fourth of July to be designated a national holiday.

But perhaps labour unrest is just part of the Middle East's construction landscape. Just as the costs of accommodation and transportation are factored into a construction contract, maybe contractors consider occasional hiccups from unhappy workers simply the cost of doing business.

The casual observer, however, may be surprised to learn, as assistant editor Jamie Stewart reports, that only 7% to 8% of the average construction contract budget goes to labour.

And that includes accommodation and transportation. A typical construction labourer in the UAE earns about $163 a month.

In the West, labour accounts for roughly half the cost of a construction project. Union workers earn as much as $25 per hour or $4000 a month. Non-union workers can take home as much as $20 per hour or $3200 a month, according to the Association of General Contractors of America.

And the American construction industry expects labour costs to increase this year by as much as 5.5%.

Examining American and Middle East construction wages are apples and oranges. There's no comparison. The UAE is in its infancy in developing codified labour laws. And, frankly, building skyscrapers and residential developments at the current speed we are witnessing can't be achieved without cheap and plentiful labour.

Yet it illustrates the Grand Canyon-sized gap between what labourers in much of the world earn compared to the earnings here. And as long as immigrant labourers are aware of what their brothers earn elsewhere, then there will always be a rift between the worker and the employer.

These rifts may come in the form of complaints over food or accommodation or working through the mid-day work ban. But it always boils down to one thing: Earning a living wage.

Rob Wagner is the editor of Construction Week.

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USER COMMENTS (5 COMMENTS)

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Low Wages
Posted by Ajay Naik, Dubai, UAE on 26 July 2008 at 16:56 UAE time

Excellent view on pathetic condition of labourers. This city of greed has lost its soul. Presently authorities are working as if they have some deadline to build this city verticle to win some coveted crown. They do not want to haul up "merciless profiteering" employers mainly these many unscrupulous contracting companies in order not to disturb the construction activities going on. Frankly there is huge amount of human rights violation is going on, but it is simply ignored. This city is built on sweat, blood and dried tears of thousands of poor souls and it will come back to haunt them.

FAIR WAGES THE BOTTOM LINE
Posted by Niranjan G, Dubai, UAE on 26 July 2008 at 08:01 UAE time

Very interesting article by Rob Wagner. Interestingly, this region has already started comparing itself with New York, London, Singapore, Hongkong in terms of property prices. The owners and landlords make profits which are far in excess of regions they compare themselves with.
Yet, no one wants to benchmark salaries and work conditions the same way.

Fair Wages for Construction workers
Posted by anees, Dubai, UAE on 23 July 2008 at 18:43 UAE time

Well said Rob, I think the US$ 7.6 is on the higher side, most of the workers get AED 500 - 600 per month in their hand. It is a pathetic situation!!!

Fair wages the bottom line in labour disputes are welcome
Posted by Abhijit P.Kuwalekar, doha, Qatar on 21 July 2008 at 13:30 UAE time

Congratulations and salutations Mr Wagner. This is the most analytical, true and practical editorial from Arabian Business group.

Low Wages
Posted by Gloryb, Sharjah, United Arab Emirates on 19 July 2008 at 17:51 UAE time

Excellent comment Mr Wagner. However, while workers who are seeking to make a better life for themselves by toiling in the sun in Dubai are exploited by "profiteering" by unscrupulous agents and employers alike, the current abysmal conditions of poor wages, accommodation and benefits will prevail. More needs to be done to stamp out these practices - fines of 10 - 50,000 Dhs for companies with portfolios of millions are not a deterrant. Closure for 3 - 6 months is more effect, and more likely to produce positive results. When production is threatened, only then will companies comply.

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