Bahrain sets new minimum wage for private sector workers

Published January 8th, 2014 - 09:18 GMT
Bahrain parliament voted to establish the private sector minimum wage Tuesday (Courtesy of Gulf News)
Bahrain parliament voted to establish the private sector minimum wage Tuesday (Courtesy of Gulf News)

Bahrain’s MPs have approved a bill that effectively guarantees a BD300 ($792) minimum wage for Bahraini employees and pensioners in the private sector.

They defied the government and voted in favour of setting up a fund that would supplement the salaries and pensions of those receiving less than BD300 a month, reported the Gulf Daily News, our sister publication.

The proposal was passed yesterday (January 7) despite heavy opposition from three government ministers, who warned it was full of loopholes and open to exploitation.

Labour Minister Jameel Humaidan described it as "charity" and said authorities were already striving to improve Bahrainis' salaries through training and education.

"The ministry is already carrying out various training and educational programmes to enable Bahraini workers to develop in their work and get more pay," he told MPs as he appeared in parliament.

"Bahrain is not a charitable state and MPs can't turn it into that with direct cash payments in the name of salary support.

"This fund will enable businessmen to cheat the system, as they will pay less than BD300 knowing that the difference will be shouldered by the government."

MPs estimate the scheme would cost BD28 million every year and benefit around 16,000 Bahrainis.

They want the Pension Fund Authority to take responsibility for overseeing the fund.

However, if the bill is implemented, Bahrainis would only be entitled to the wage supplement after completing a year in the job.

Finance Minister Shaikh Ahmed bin Mohammed Al Khalifa described the bill as a short-term fix and a waste of public money.

"We (the government) are not saving money and are spending it on people, in one way or another," he said.

"It is their money, but we have to think wisely. The government has, in just a few years, invested in the industrial and financial sectors and made them appealing - with thousands of Bahrainis being given jobs with good pay.

"Giving cash is good momentarily, but with time and rises in inflation it just gets swallowed in expenses and we return back to square one,” he added.

Meanwhile, Minister of State for Parliament and Shura Council Affairs Abdulaziz Al Fadhel said the proposed fund would create chaos rather than solve any problems, particularly since it would create imbalances due to existing social welfare schemes.

"It would mean someone who earns BD350 will be getting less than someone earning BD250," he said.

"The one with BD250 will be getting BD50 to meet the proposed minimum wage and another BD100 as monthly anti-inflation allowance, while the other would get nothing from the fund and BD75 as anti-inflation allowance.

"Other than that, it means those with secondary certificates would be getting equivalent to university graduates who, under the Labour Ministry, receive an average monthly wage of BD400,” he added.

However, Bahrain Bloc president MP Ali Al Derazi said the fund was inexpensive and would help Bahrainis living in poverty.

"The BD28 million cost is not much, so why is the government showing stubbornness despite it lifting people from poverty to semi-poverty?" he asked.

The bill will now be referred to the Shura Council.

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