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Workers in the UAE’s manufacturing sector are among the lowest paid worldwide, according to IMD World Competitiveness Centre’s Labour Market Index.
The data showed that 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 (Dh12.4), it said.
Emirates 24l7 reported last week that the UAE stands at the 19th position in terms of the best salary increment expected in 2012.
According to a new study by recruitment platform MyHiringClub.com and NriJobPortal.com, the UAE is seen leading the GCC in terms of expected salary hikes this year, followed by Saudi Arab, Kuwait, Qatar and Bahrain. The country improved its position by two slots this year.
Among the top10 countries in IMD index, the Indian manufacturing workers earned the lowest average wage of $1.09 (Dh4) per hour followed by the Philippines ($1.17), Ukraine ($1.74), China ($1.96), Turkey ($2.50), Russia ($2.99), Mexico ($3.12), Bulgaria ($3.20), Jordan ($3.24) and UAE ($3.38).
Manufacturing workers in European countries earned the highest wages.
In Norway, they earned $45.5 per hour followed by Denmark ($45), Belgium ($42.66), Austria ($39), the Netherlands ($38.87) and Switzerland ($38).
Among the world’s leading economies, manufacturing workers in the US took home $26.19, Japan $25.4, UK $23.25, Canada $26.4, France $30.33 and Germany $34.7.
Although competitiveness is more than just labour costs, hourly compensation in manufacturing plays a critical role on how companies analyse the location of their investments. Not surprisingly, Northern Europe is the most expensive region while the large emerging economies, such as India, China and Russia fare very low.
“The real issue is the difference in labour cost, for example $1.96 an hour in China compared to $26.19 in the US, $34.69 in Germany and an incredible $45.50 in Norway. Are such differences compensated by similar advantages in productivity? 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,” said Stephane Garelli, Director, IMD's World Competitiveness Center.
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