NEWS ANALYSIS
PRABHAKAR GHIMIRE
Employers may turn to less labor-intensive options
KATHMANDU, Jan 4: Over the
years, the Nepal government has had the minimum pay for Nepali overseas
workers in three countries- Saudi Arabia, the United Arab Emirates and
Kuwait -raised. The minimum salary for workers employed in Qatar was
already specified by the government a couple of years back.
With effect from New Year´s Day 2013, the Malaysian government set the
minimum salary for both domestic and migrant workers, and this
translated into a significant hike in their pay scales.
The moves by both originating and host countries to jack up the
remuneration of workers are welcome, and are expected to ensure better
earnings, and eventually higher savings. Nepali unskilled workers, who
were paid meagerly, have benefitted from the rise in minimum salary.
Nepali workers are comparatively less skilled than those supplied by
other countries, something which has weakened their bargaining power
with their employers.
However, the demand for Nepali workers has not yet been badly
impacted as employers in the host countries still want to hire Nepalis
and get away with paying comparatively lower salaries. But foreign
employment agents said the situation will not continue forever as major
employing companies in the recipient countries are demanding fewer
workers with higher skill levels and going for capital intensive
mechanisms
.
“Though the hike in salary by both source and host countries would
enhance the workers´ financial position, it will simultaneously have a
negative impact on the demand for workers from countries such as ours
which have been supplying mainly blue-collar workers,” said Kumud
Khanal, vice-president of Nepal Association of Foreign Employment
(NAFEA).
Nepal has been highly dependent on remittances sent by unskilled
workers, who account for more than 90 percent of the total number of
Nepalis leaving for overseas job destinations.
With the increasing demand for higher-skilled workers in host countries,
given the massive shift from labor-intensive to capital-intensive
industrial processes, Nepal faces a huge challenge coping with lower
demand for blue-collar workers.
Foreign employment experts also said the raise in minimum salary
effected by either the host countries or supplier countries might not
always be beneficial.
“As a host country, it is natural for Nepal to seek minimum wages for
its workers abroad and strengthen their income levels. But, it would be
detrimental in the long run to jack up remuneration unilaterally without
consulting employers in the destination countries,” said Dr Ganesh
Gurung, who has long been researching foreign employment.
Dr Gurung said the source country governments also have to take into
account the existence of rival countries supplying workers to overseas
destinations, changing global labor demands, the required skills for
workers and the salary scale prevalent in host countries, before seeking
a minimum remuneration level for their workers.
“We have to give more priority to developing the skills of our jobs
seekers before seeking minimum remuneration in labor markets so that our
bargaining power for better pay will be strengthened in the long run,”
he said.
The volatile international labor market with frequent changes in
policies on migrant workers by the host countries has meant bleaker job
prospects with lucrative pay for unskilled workers. Unskilled workers
are always at the receiving end of any policy shift and or financial
problems in the host countries. Massive layoffs of unskilled workers by
countries impacted by the global financial crisis in 2008-2009 was a
glaring example of how prone such workers are to losing their jobs.
“We have to focus on quality workers to drive up the per person
remittance earning, given the gradual drop in demand for low-skill
workers,” Gurung said.
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