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Wed 7 Jul 2010 01:36 PM

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Calculating the cost of living

Andy Sambidge on why it's time for authorities in the GCC to face up to the issues of low pay.

How much does an individual need to earn per year to live comfortably? It's a question that's just been answered by a charity in the UK and it's the question that urgently needs to be addressed in the GCC.

With arguably one of the most disparate salary earning environments on the planet, the Gulf region is often accused of labour exploitation as millions of expat workers toil on construction sites earning very little.

But until the question is even posed in this region, how can governments realistically tackle the problem of low pay and its effect on its citizens?

The Joseph Rowntree Foundation said this week that a single person needs a gross income of at least GDP14,400 ($21,700) in 2010 to live in the UK to an acceptable standard.

In the UK, the charity's figure indicated a growing gap between the national minimum wage and the minimum income standard due to rising inflation for necessities.

That's nearly 80,000 dirhams per year for those living in the UAE, that's 81,500 riyals in Saudi Arabia, that's just over 79,000 Qatari riyals, that's 8,376 Omani rials, or 6,310 dinars in Kuwait or about 8,200 Bahraini dinars.

Everyone I know here knows at least a dozen people not taking home this much a year, despite the tax free perks of the Gulf region?

The age-old argument of 'well they [expat workers] earn far more than they would in their own country' is of course true in most cases but does that make low pay in the GCC acceptable?

No. So it's high time the question of how much a person needs to earn to live a decent life is addressed by authorities across the region.

The answer could help government form the basis of new social policies to address the issues related to low pay such as housing and health.

Even a minimum wage perhaps. In April, Kuwait media reported that a minimum salary of KD60 ($208) per month had been set for employees working in the private sector. But the minister responsible for the decision gave no details as to how they arrived at the figure. Did they ask the question?

The same month, Bahraini newspapers quoted a senior official saying there would be no minimum wage for expats in the country. He obviously didn't ask the question but he should.

The alternative is for the status quo to continue, for hundreds of thousands of expat labourers to struggle on with only minimal support from the countries they are helping to build.

Strikes have taken place over low pay in the region, in particular in Bahrain and the UAE.

This silent majority is an essential part of the Gulf's past and future growth and deserves an answer to the question.

They don't expect weekly champagne brunches, just some recognition of their financial plight and some hope that it might improve.

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