Bahrain will not set a minimum wage for its domestic workers due to the free-market nature of its economy, according to officials.
The change would not help the country’s labour market since it works on a demand and supply system, Labour and Social Development Ministry Labour Affairs assistant under-secretary Mohammed Al Ansari told Gulf Daily News.
The subject was discussed following the decision by neighbouring country Kuwait to set a $200 minimum wage for domestic workers and approved rights such as a weekly day off, 30 days of annual paid leave, a 12-hour working day with rest, and mandatory overtime pay. It became the first Gulf country to legally standardise the working conditions for its domestic workers.
“Bahrain is currently not in a position to consider a minimum wage for domestic workers. In fact, we don’t even have a minimum wage for nationals in the private sector. The kingdom has a free and open market which works on a demand and supply system; we do not want to interfere and upset that,” said Al Ansari.
“[It] is currently working positively and over the past 10 years we have seen how this flexibility has supported our economy. In 2005, the wages in the market were less than half of what they are now. For example, in hypermarkets the salaries used to be between BD100 and BD120, but now it is between BD270 and BD300. The increase is huge and this I believe is due to the demand and supply model of Bahrain’s flexible market,” he added.
Bahrain has a minimum wage of BD300 ($795) for citizens in the public sector, but not for nationals in the private sector.
The Labour Ministry said the move would affect foreign investment in the country.
The number of domestic workers in Bahrain has risen from 44,586 in 2004 to 111,002 at the end of 2015, according to the Labour Market Regulatory Authority. However, the number is much lower in Kuwait, where there are approximately 660,000 domestic workers.For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.