JEDDAH – Economists have called for establishing a minimum wage policy for both Saudis and expatriates working in Saudi Arabia. The latest statistics issued by Hay Group's “2012 Saudi Arabia Compensation and Benefits” show that the salary gap between Saudi nationals and expatriates is widening – Saudis receive 17 percent more than the market average, while non-Saudis get four percent below the market average. A total of 356 companies in 17 industrial sectors were included in the study, which reported that salaries in Saudi Arabia rose by 3.8 percent over the last 12 months. “The recent increase in salaries in the government sector is normal due to inflation. The Ministry of Labor has called for a minimum of SR3,000 to be paid in the private sector, but a majority of companies have not yet followed this decision,” said Salem Baajaja, professor of accountancy at Taif University. According to Baajaja, the widening gap between the salaries of nationals and expatriates should be narrowed, or even disappear. Abdulwahab Al-Gahtani, professor at the faculty of strategic management and human resources management at King Fahd University of Petroleum and Minerals, said the minimum wage issue in the Kingdom should be tackled urgently for many reasons. “The most obvious reason is that Saudi Arabia is a signatory member country of the International Labor Organization's (ILO) agreements on many labor issues,” he said. “Unfortunately, private sector companies are taking the advantage of the absence of a well-established minimum wage policy in the Kingdom to employ expatriates, he said. According to Al-Gahtani, the global economic indicators show that inflation is continuously on the rise. “Both Saudis and expatriates are affected by inflation in the Kingdom and thus the government is advised to periodically revisit the minimum wage to reflect inflation in Saudi Arabia.” – SG/Agencies
