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UAE workers among world's lowest paid, report says

IMD report finds UAE ranks 10th in terms of lowest manufacturing wages

Workers in the UAE's manufacturing industry are amongst the lowest paid in the world
Workers in the UAE's manufacturing industry are amongst the lowest paid in the world

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Workers in the UAE’s manufacturing industry are amongst the lowest paid in the world, according to a report released by the IMD World Competitive Centre’s Labour Market Index.

According to data released by the Centre, the UAE was ranked 10th in terms of lowest manufacturing workers’ wages in the year 2009.

An average total hourly compensation for manufacturing workers (wages + supplementary benefits) in the UAE was $3.38 or AED12.4, the report said.

In comparison, manufacturing workers in Europe earned the highest wages per hour, with Norway leading the pack at $45.5 per hour.

Denmark and Belgium followed close behind with $45 and $42.66 respectively. Austrian workers earned $39 an hour, while the Netherlands and Switzerland earned $38.77 and $38 respectively.

Among the top ten countries in the IMD index, Indian manufacturing workers earned the lowest average wage of $1.09 (AED4) per hour, followed by the Philippines ($1.17), Ukraine ($1.74) and China ($1.96).

Turkey ($2.50), Russia ($2.99), Mexico ($3.12), Bulgaria ($3.20), Jordan ($3.24) and the UAE ($3.38) rounded out the list of low paying countries.

According to a report by Emirates 24/7, a Dubai based newspaper website, the UAE is seen as leading the GCC in terms of expected salary hikes in 2012, followed by Saudi Arabia, Kuwait, Qatar and Bahrain.

Although competitiveness is measured by more than just labour costs, the experts behind the report said that hourly compensation in manufacturing plays a critical role in how companies analyse the
location of their investments.

Therefore, it is not surprising to see Northern Europe as the most expensive region, while larger emerging economies such as India and China fare much lower.

“The real issue is the difference in labour costs, for example $1.96 in China compared to $26.19 in the US, $34.69 in Germany and an incredible $45.5 in Norway, are such differences compensated by similar advantages in productivity?” asks Stephane Garelli, director of IMD’s World Competitiveness Centre, in the report.

“Probably not…today, the reindustrialisation of advanced economies is a political priority. But this will not happen if such labour cost differences are not offset by quality, efficiency and added value: a tough assignment,” he added.

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