New minimum wage for unskilled labour 71% higher than previous average
Saudi contractors have rejected a decision by the Indian government to set higher wages for its workers in the Kingdom.
According to local media, contractors have said that the decision could stall construction projects and force some companies out of the market.
“The contractors committee rejects India’s decision to raise the minimum and maximum wages for its workers in Saudi Arabia without prior coordination. We call for the abolition of this increase which will hit projects based on previous worker wages,” Abdulhakeem Al-Ammar, chairman of the Contractors Committee at the Chamber of Commerce and Industry in the eastern province told the Arabic daily Alyoum.
The National Contractors’ Committee is due to hold an emergency meeting to discuss the plan and take ‘counter-measures’. This could include the replacement of Indian workers by Bangladeshis.
“Raising the minimum wages for Indian construction workers will adversely affect growth and cause stalling of projects. This will hurt the small and medium companies and could eventually force them out of the market, which, in turn, will obstruct plans to find jobs for Saudis,” said Al-Ammar.
He added that the committee had already asked the labour ministry to ‘protect’ existing construction projects from any future delays. Furthermore, the chairman called for a committee that grouped contractors with relevant government departments to be formed.
The committee would study the negative effects of India’s decision on the country’s contracting sector and the domestic economy, he said. The Saudi Arabian construction sector is heavily reliant on Indian workers, with nearly two million employed.
The new wage system announced by the Indian embassy in Riyadh seeks $453 to $933 for skilled labour, and $320 to $453 for unskilled workers. The new minimum wage for unskilled labour is nearly 71% above the existing average of $187.
Saudi Arabia remains heavily reliant on foreign labour in its construction industry as most locals are reluctant to take jobs in this sector. Nearly 93% of all expatriate workers are employed in construction, Al-Ammar says.