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Should the GCC impose a pay rise cap to slow inflation?
by This email address is being protected from spam bots, you need Javascript enabled to view it on Sunday, 28 October 2007Posted on Sunday, 11 November 2007
wheres the equation?
Posted by Anjli at 11:00 UAE time
increasing EXPENSES + reduced income NOT= reduced inflation
as far as my memory goes,incomes have never appeared to be on the plus side of the scale relative to expenses in the emirates, and at the same time although incomes have been tight inflation has always risen ..... accelerated rise in the tertiary market is a result of combination factors; pay-rise cap cannot curb inflation because it has simply not been a determinant in the first place.
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Posted on Wednesday, 7 November 2007
iT'S ABOUT TIME!
Posted by Reema at 10:00 UAE time
Why should Western exptriates make 5 times more in the UAE than in the UK, whilst other expatriates should settled for only twice the salary they make in their countries. I am talking about knowledge workers and senior level management here. Why should these Western expatriates enjoy their lives and save and the others can't? This status quo has to change asap. As for the laborers they deserve more than what they currently make for they put their sweat and blood into the work they do.
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Pay rise cap
Posted by Rohit Raghavan at 08:00 UAE time
One thing i dont understand in UAE- any problem faced authority first think of hitting the people back first.The pegged Dirhams against Dollor and inflation are the real root problems and salary hike cap is not the solution.This inflation is leading to high cost of living in UAE.Fall of value of Dollor has also effected the people especially for indians as Indian rupees is strenghtening.People in UAE is now struggling to save for future.Andalso no companies will give pay rise unless and untill they really want to hold the employer back.So let the deserving people get the hike.Look out ways to control inflation and hitting on ordinary peoples head is absolutly not the solution.
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Posted on Tuesday, 6 November 2007
Pay Hike
Posted by Sid at 22:00 UAE time
Expats who has come here agreeing to a certain pay are trying to meet their ends very hard because expenses have sky rocketed. People are in debts every where, multiple bank loans, credit cards etc. at least the Basic Salary to be increased by 20% without conditions.
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Should the GCC impose a pay rise cap to slow inflation?
Posted by Chris Kinsville-Heyne at 18:00 UAE time
The cap is certainly not needed on saleries; just the opposite, in fact. There needs to be a cap on the basic commodities; housing and education being the main two. Affordable housing would be a novelty as would high standard, sensibly priced education.
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Posted on Monday, 5 November 2007
Wage freezes? Naive
Posted by reflective expat at 14:00 UAE time
It's pretty apparent that some people are already opting to leave the country because the cost of living is already gettting too high here .. and the gap between the advantages of staying here when compared with those of choosing to move either to their home country or elsewhere . is shrinking.
To suggest wage freezes would help is to be a bit naive about economics. To start out with, it likely would only exacerbate an already difficult situation. From my knowledge, when wage freezes have been attempted .. any control on inflation wasn't felt for quite some time (there's a definite lag time). However it doesn't address the major cause of inflation... the cost of imported goods - almost all food and manufactured goods are imported here. These also come from countries who have either a currency that has appreciated against the US$ or who have suffered under skyrocketing oil prices to ship goods to their markets and are forced to pass those costs on to consumers.
Wage controls will NOT address either one of these factors. What WILL make an impact is if the UAE along with other Gulf Countries move forward with "depegging" their currencies on the US dollar. They are all suffering from the excesses of an essentially "sick" US economy that has to take its medicine to get well.. but unfortunately its "friends" are forced to take the same medicine whether they like it or not. I see absolutely no other solution...
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Posted on Sunday, 4 November 2007
wrong hole
Posted by Abelito at 10:00 UAE time
Methinks the author of this idea of capping pay raises is trying to plug the wrong hole of the leaking boat.
The cap that is needed is on prices of commodities.
It doesn't take rocket science to know this.
And there are ways to do that. Let the lavishly-paid, economic consultants get their grey cells working on this.
-- langyaw
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Should the GCC impose a pay rise cap to slow inflation?
Posted by AKBAR SHAIKH at 06:00 UAE time
Whoever thought about this is out of his mind. Inflation is normally a result of lack of supply, but what we are seeing in Gulf is not normal. In fact, there is abudant of money supply at the disposal of banks, who in turn are willing to lend at any cost. Hence, landlords, who are mainly the real estate agents, are willing to play the hoarding game and create artificial supply shortage leading price inflation - which in turn has affected the cost of everything - "to pay one you recover from other." I feel following should be tackled at the Government level:
- create more community centres with all facilities near and around
- use excess money supply for more productive use such as free education for all, research, etc
- low cost housing
Let the normal demand and supply rule apply!
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Posted on Thursday, 1 November 2007
Pay Rise CAP
Posted by Francis at 17:00 UAE time
I believe we are losing focus on the actual priority currently troubling the economy. Instead of seeing measures to contain the inflation, the weird suggestion of a Pay Rise CAP only adds insult to injury to all expats who have already been tearing their pockets to manage to pay their upcoming huge rents. Is this topic really worth the internet bandwidth being used? Instead, put a CAP on the rising inflation that is current only making the rich even more richer while the rest look above in awe.
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Pay Rise CAP
Posted by Fred RED at 13:00 UAE time
Capping pay will do nothing to halt inflation. Current inflationary issues here in Dubai are directly causal to a number of key factors. Two key factors are the: 1) Paucity of affordable accommodation coupled with greedy rent hikes and unregulated development. 2) The issue of the Dirham being pegged suicidally to the dollar. Ignoring the effect of the housing market on economy has been the downfall of many governments. Kuwait is living proof that rebundling can work. The stronger the Dirham is against the dollar, pound and euro the less strain there is on the expat labor force meaning that they are less likely to demand higher wage increases. Capping salary increases is tantamount to blocking the only vent hole in a volcano... it might stop the smoke temporarily but in doing so is likely to set the scene for a major explosion down stream.
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Pay Rise Cap
Posted by Ms Pillay, Dubai, UAE at 08:00 UAE time
The UAE is growing rapidly with all the new developments underway. I think that the pay rise will be a way to maintain employees as a preventative measure to any delays in these developments. Majority of expats especially leave their families in their home countries to come to Dubai and earn money so that they can provide for their families at home. The cost of living has increased so rapidly in Dubai that even those people who thought that they were poor in their country has become even more poorer here in Dubai because everything they earn goes right back into the country in other ways. Not every organization provides housing, transport and meals and these three alone is not enough to survive let alone other expenses in our day to day lives. So I think that the inflation should balance with the income giving people strength to continue their work in Dubai. Without strength there can be no productivity according to the demand at present. It will only be satisfactory.
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Posted on Wednesday, 31 October 2007
Pay Rise Cap
Posted by Madhu at 13:00 UAE time
This may be effective only in certain categories of skilled labour. The UAE is now facing shortage of skilled manpower in construction industry. The pay rise cap if introduced will prompt employees to look for better avenues and will lead to more employee turnout in these sectors of industry. As supply is less compared to demand, people will start moving to other company if they are not offered better packages to the cope with the inflation.
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Posted on Monday, 29 October 2007
pay caps
Posted by m farley at 09:00 UAE time
I thought that it was already in place, most people who work in the private locally owned (as opposed to International)companies do not get yearly cost of living raises.
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Posted on Sunday, 28 October 2007
Pay Rise Cap
Posted by Gloria at 20:00 UAE time
If an employee is lucky enough to have an employer who increases his pay, unlike the majority of workers here whose pay has remained stagnant for at least 3 years ( the duration of the residency visa/contract), the rate of pay rise is no-where in the vicinity of the rapid rise in inflation- especially taking into account the steep housing and basic food cost hikes in recent times. To introduce a cap will effectively enable the unscrupulous real estate agents and traders to force people to do without basic necessities in order to pay ever increasing costs. An effective solution is to ensure there are options with regard to housing facilities to those people who are the average workers here on salaries between 1500 dhs per month to 6000 dhs per month. In addition, the salary cap could not be applied to the thousands of unskilled workers who at present exist on a salary most of us would never even think of rising out of bed to receive, let alone toil in the blazing sun to ensure the development of this beautiful country.
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