Fair wages the bottom line

As long as construction labourers are earning $7.60 a day in the UAE, we can expect strikes and labour unrest.

Al Hamra Construction Company, COMMENT, Business

As long as construction labourers are earning US $7.60 (AED28) a day in the UAE, the leading lights of the construction industry in the Middle East can expect periodic strikes and labour unrest like the brouhaha recently involving workers at the Al Hamra Construction company.

Complaints among labourers at Al Hamra may have been about food but the core issue that sparks such violence can usually be found in poor wages.

Yet there are few people who believe for a second that a minimum wage standard is coming to the UAE. That's like expecting the Fourth of July to be designated a national holiday.

But perhaps labour unrest is just part of the Middle East's construction landscape. Just as the costs of accommodation and transportation are factored into a construction contract, maybe contractors consider occasional hiccups from unhappy workers simply the cost of doing business.

The casual observer, however, may be surprised to learn, as assistant editor Jamie Stewart reports, that only 7% to 8% of the average construction contract budget goes to labour.

And that includes accommodation and transportation. A typical construction labourer in the UAE earns about $163 a month.

In the West, labour accounts for roughly half the cost of a construction project. Union workers earn as much as $25 per hour or $4000 a month. Non-union workers can take home as much as $20 per hour or $3200 a month, according to the Association of General Contractors of America.

And the American construction industry expects labour costs to increase this year by as much as 5.5%.

Examining American and Middle East construction wages are apples and oranges. There's no comparison. The UAE is in its infancy in developing codified labour laws. And, frankly, building skyscrapers and residential developments at the current speed we are witnessing can't be achieved without cheap and plentiful labour.

Yet it illustrates the Grand Canyon-sized gap between what labourers in much of the world earn compared to the earnings here. And as long as immigrant labourers are aware of what their brothers earn elsewhere, then there will always be a rift between the worker and the employer.

These rifts may come in the form of complaints over food or accommodation or working through the mid-day work ban. But it always boils down to one thing: Earning a living wage.

Rob Wagner is the editor of Construction Week.

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