Dr. Abdullah Bin-Mahfouz says Saudis working in the private sector should earn no less than SR5,000 a month.
He called on all private sector companies to accept the proposal in order to combat increasing unemployment among Saudi nationals.
Bin-Mahfouz made the proposal following a statement by Minister of Labor Adel Fakieh at the Riyadh Chamber of Commerce and Industry (RCCI) on Saturday, where he called on Saudi businessmen to work toward finding a solution to bring down the Kingdom’s unemployment rate.
Speaking to some 170 businessmen from different parts of the country at RCCI on Saturday, Fakieh said the number of unemployed Saudis represented just 10 percent of the expatriate work force in the country.
Bin-Mahfouz said the benefits of setting a minimum wage would be three-fold, in terms of ending low wages among nationals, increasing local productivity and by assisting Saudis to afford the rising cost of living.
“We often receive complaints from Saudi employees in the private sector who say they are suffering as they cannot purchase a home or land or are unable to cope with the high costs of living due to low wages,” the businessman said in a report published by Al-Riyadh newspaper on Monday, adding that low wages are the main reason why a number of Saudis leave their jobs or refuse to seek employment at all.
He said low wages could eventually lead to other problems in the workplace, such as an overall lack of enthusiasm and disloyalty to companies.
Bin-Mahfouz, who has already implemented a minimum wage at his own company, said following the move he has seen nothing but positive responses from his employees as well as growth in his business.
Further arguing his point, Bin-Mahfouz quoted a recent economic study that found that Saudis earning a salary less than SR5,000 per month have not been able to cope with the current cost of living in the Kingdom.
He pointed out that in July 2009, the Saudi Resource Development Fund had set a minimum wage of SR3,000 for private sector Saudi employees and had been supplementing that with an additional 50 percent stipend on top.
According to Bin-Mahfouz, the SRDF initiative has proven successful, with Saudi workers choosing to stay on their jobs as well as contributing to an overall increase of Saudi employees in the private sector.
The latest data from the Central Department of Statistics released in April put the unemployment rate in the Kingdom at 10.5 percent, while other data from the CIA World Factbook quoted the rate at 11.6 percent, of which 40 percent are young Saudis.
