Sunday, February 3, 2013

Omani Minimum Wage Increase: here is my 325 OMR on the matter

If you are Omani (and even if you're not) you've probably heard about the minimum wage increase [Omanis only of course] from 200 to 325 OMR. That is roughly 840 USD a month [converted for my non-Omani readers since most people are up on their USD to other currency ratios---not because I am American]. Honestly, this pay increase does not make sense to me. I think it will only result in the increase of the cost of living.

It has often been suggested that there should be a Ministry of Logic. Since there is not, here is my 325 OMR on the matter.

Some Omanis definately do deserve 325 in the private sector. Others do not. Like that fool whose reading my blog when he's got a phone at that Ministry to answer but is ignoring it or that Omani chick who is googling deisgner abayas and finds this blog while painting her nails and having qahwa with the girls in her office on someone else's time and rial.

Let me just compare, from my country or origin. In Canada, most people in minimum wage jobs [and even other professional jobs such as nursing] do not work on salary. They get paid by hour. The legal limit for how many hours someone can be forced or asked to work in a day for normal wage is 7 hours five days a week. The average working day is timed from 9-5 with a 1 hour lunch and a fifteen-30 minute coffee break in between. The minimum wage in Canada when I was there was 8 dollars which is roughly 3.100 OMR per hour. 3.100 OMR x 7hours x 5days x4weeks=434 OMR a month. Plus we get taxed on that. And our cost of living is more than here in housing and transportation. And we often don't have alot of family backing. So I just don't get the logic behind the Omani government's move. From an economic perspective is doesn't make sense. At All.

I see it is as purely political move that is bad one. On the chessboard of a country's economy it is one that has only a very short-term advantage and longterm consequences. It heals nothing, just makes us numb for a little while, while the real medecine hurts but would work.

There is no way everyone making this pay raise can deserve it by the output of their work unless they are forced to work unnaturally long hours OR their position requires a skill level that was previously undervalued. Since many Omani already actually DO work slave hours or whose positions are undervalued this could be seen as the benefit of such a huge pay increase, but I will argue it does nothing but a temporary balm for a badly bandaged mortally wounded system.

Now I know Omani nurses don't make minimum wage but I will use them for my example. Omanis I know love proverbial examples whenever trying to get their point across. I guess I am Omani in that, because I do too.

In case you didn't know it, Oman has a horribly BAD nurse-retention rate. Which is bizarre, considering the majority Omani nurses don't move away from the Sultanate to find jobs elsewhere, and the government encourages them and pays for them to become highly specialized. They also have abnoramlly high unsubstantiated sickleaves which is the result of an entire population working on salary with fixed hours which offer no flexibility. As no one gets paid by hour, they are not offered the flexibility to choose their own hours and there is no incentive to accept more stressful hours and days ect, like night shifts.

In western countries, the incentives for working longer than legal hours is financial. You work more you get more. In Oman, nope. I can sit at my desk all day on blogger or facebook (like alot of my collegues) and get paid the same as if I actually did my work. It is hard to fire anyone who does the bare minimum. Only a moral person will work to the best of their ability in Oman usually, and that's a fact made real by experience on the pace of the workplace in Muscat, obvious to anyone from outside the country.

In Canada if your company asks you to work over the 7 hours a day 5 days a week limit any hour you work over that you pay per hour is doubled. And if this ovettime happens on a time that the work is more difficult or stressful, some places have been asked by the government to pay what is called "time and a half" which is double salary plus half in evry place I have worked. The hard workers, or those in need of the money, always volunteer for these shifts because the benfits are obvious.

In my country, some people do work on salary. Their incentives are also financial or educational. They will get paid a bonus if they made a deadline, and meet very high standards or corporate goals, or be sent for specialization or training to get promoted ect...This is usually managers and CEOs or employees that do alot more than their job requirements and go above and beyond to improve their work and companies. I made salary. But if I did not get sales, or if my designs didn't increase sales, I didn't get a bonus. And if usually if people repeatedly didn't exceed the standards, they'd get replaced by someone with more ambition or a greater skill level who could.

No one on minimum wage gets salary in my country. They are paid by hour. If Oman paid by hour I would be okay with a pay increase. If people worked hours they'd deserve more. But this system has to be applied across the board. It can't be based on nationality. Until pay-by-passport is eliminated you will never ever have maximum Omanization.

Sure, training and specialization treatment should be given to Omanis over expats, every time, hands down. As Omanis, we need to run our own country. But people should be paid by the work they do, not otherwise.

So my suggestion: GIVE OMANIS THE INCREASED SKILL LEVEL AND RIASE THEIR SALARY BUT PAY BY HOUR FOR THAT not an illogical pay increase across the board

If this was applied, for sure, you would see Omanis taking over more skilled or strenuous positions. I would, for one, love to see the entire construction and development system taken over by Omanis. That is alot of jobs. It also makes sense for a lot of young men who just can't seem to fit into a college career. They need to be able to support their families with just highschool but flipping burgers for illogical sums of rials just doesn't make sense. In Oman the average consturction worker is Indian or Pakistani. They make about 60 OMR a month. If you say that they work fair hours (which they don't) that works out to 0.429 baiza per/hr x 7hrs per day x 5 day per week x 4 weeks a month. If the Omani government demanded that Omani men of a highschool education be paid per hour and no non-Omani could hold a construction job and they increased the Omani minimum wage just to the Canadian norm for beginner road-workers [15 dollars per hour] (5.000 OMR) you'd have alot of better highways built and a lot of Omani men being useful and supporting their families. No need to hurt smaller businesses and increase the cost of living for the rest of the Sultanate's population.

Of course, I am sure, the owners of those big construction projects wouldn't like this. Millions of rials would be lost to them [that they don't deserve in the first place for the quality and speed of work produced]. Easier just to make everyone else's cost of living go up. Because when you are using nigh slave labour who don't get a say in their hours you can definately afford to pay 10 OMR for a big MAC at McDonal's when the average Omani on minimum wage begins to realize he/she can't afford normal household goods anymore because the price of everything went up along with his/her irrational salary.

I urge Omanis on mimimum salary who are content with their new raise to realize what it means to them and their country in the long run. And to urge their government for the changes that really need to take place to make a last difference on a sick system.


ynotoman said...

From a minimum wage of Rial Omani140 (I think) at the start of 2011 to Rial Omani325 at the start of 2013 in a large jump. Will this affect the employers perception of employment of non-Omanis?

Omani Princess (not Omani...yet) said...

Ynotoman: Definately. They'll hire more 50 OMR a month Pakistanis to make up for the 325 Omanis. Sadly.

I don't think it will reduce or increase omani chances of skilled positions. That requires a little more effort on the gov.'s part. Money is a bandage.

Maryam said...

CI don't think the amount is excessive,I think that it's the work ethic that needs to change, better salary attracts better employee, however managers have to do their jobs too in order to create a productive working environment.Canada has increased its minimum wage and in o rder to be paid overtime you need to work more that 44 hours per week. most work days are 7.5 hours with 30 min lunch break.

Heidi said...

I SUPER love your blog - especially as somebody from Victoria who randomly stumbled across it. It's really opened my eyes to a lot of things (I love telling my friends about the Muslim fashion world!)

I just wanted to note that in Canada it's 8 hours/day before overtime, and a 40 hour work weeks is standard. We're entitled to a 30 minute unpaid lunch break (Some employees pay, some don't.) and minimum wage has recently gone up to $10.25/hour.

I completely agree with you about minimum wage increases not being good (simple economics!), but alas - the system is broken everywhere.

Thank you for blogging!

Anonymous said...

Frankly I liked your thought on that we should encourage locals to joins construction sector. Today if we see all major country projects and investment is in construction, it is not only in oman but across the globe infrastructure structure projects are booming up. Increasing salary will definitely < -> increase the cost of life. At end we are the one who will be paying back to these companies for their increased cost!!

Omani Princess (not Omani...yet) said...

Maryam: It won't attarct better employees since these are employees that have to be employed anyways.

It will just make employees relunctant to create these unskilled positions or to fill them with Omanis.

But I do agree, work ethics DO need to change.

Omani Princess (not Omani...yet) said...

Heidi: Thanks for the update and thanks for reading the blog. Did you find it via Beduoin Victorian Girl? Just curious.

yeah, people here don't understand how long our working hours are in Canada. Normal gov't hours in Oman are from 7 am to 2 pm or LESS.

Non-Omanis of course it isn't the same, also private. Nothing is standard exactly.

Anonymous said...

The reason is the Arab Spring. Here, have some minimum wage, and don't talk about democracy... LOL

Anonymous said...

how do u compare oman with canada , first of all in canada the people are well educated in oman the goverment want the people to be under educated so they could be controlled . in addition the raise in minimum wage is just a bribe to stop them from having a gulf spring in oman thast all . compare oman with the rest of the gulf citizens looka t uae nationals and qataris they earn reall good money thats what they deserve why pay a bilion dollars in a yacht and another half bilion in an opera house where most of the omanis who are attending havent got a clue . the people need to be more cultured and educated and respected and heard . the big companies rather hire expats than locals and the managers especially omanis dont like their own nationals . in Oman theyve got the idea that a young oman would take my job in a few years its just life .

Alhamask said...

This pay rise is justification to flood our debt based economy with more worthless FIAT paper currency in order to allow a few more miles of the already failing Banking system. Like every injustice, its going down down down…..