The Minimum Wage in Yemen and Employment
Increasing the minimum wage in Yemen has sparked a debate that has lasted for months. While the debate is far from over, it is clear that Yemen needs to make a change. This article will discuss what is happening with wages in Yemen and how the minimum wage in Yemen relates to employment. This article will cover the wage laws of Yemen, the probationary period for non-Yemenis and the impact of a minimum wage on employment.
40 cents an hour
The labor market in Yemen has been developing since the early 1980s. Today, there is a large informal economy, estimated to account for 60 to 80 percent of the country’s GDP. Street vendors and hawkers abound, but there is only a small formal sector, and the majority of trade goes unrecorded. Yemen’s service sector is thriving, with construction and renovation projects aplenty in cities like Sanaa and Taizz. Construction laborers stand by with tools at major crossroads.
In addition to wages, Yemeni workers are entitled to allowances when they are not working at their workplace. These allowances include travel, representation, and residence. In Yemen, employers are required to apply to the Council of Ministers for special regulations for remote employment. These provisions are not applicable in all sectors, though. If a Yemeni cannot perform a specific job, they are entitled to a living allowance or a monthly bonus.
Equal wages for Yemenis and non-Yemenis
Despite the political and economic turmoil in Yemen, the state and society are weak. Women and traditionally marginalized groups are suffering. The ratio of women in primary, secondary and tertiary schools is 0.7 to one. Female labor force participation declined from eleven percent in 2010 to seven percent in 2020. In addition, homosexuals and members of the Baha’i faith face persecution and flogging.
In June 2016, over 1.2 million Yemenis and non-Yemenis were deprived of their salaries. This left six million people dependent on salaries and other benefits. Since then, the Hadi government has suspended payments to the public sector, including the education sector. It has also privatized government offices and curtailed payments for security forces and public sector employees. The Social Development Fund, which is donor-funded, has not made regular payments to Yemenis.
According to the World Bank, reconstruction in Yemen could cost $20-$25 billion. Meanwhile, the country is suffering from negative GDP growth, high inflation and rampant poverty. Sweden 2018 prisoner exchange has begun. Meanwhile, the U.N.-led negotiations on a buffer zone along the Saudi border continue. However, in the meantime, the conflict parties are showing little enthusiasm for international cooperation. Despite the recent arrest of a U.N. special envoy, Yemen’s private sector remains crippled and commercial banks may be forced to relocate or close. The closure of these businesses would hamper the importation of goods and services.
Despite its socioeconomic problems, Yemen’s export of labor has contributed to its socioeconomic modernization. The influx of migrants has created a void in the country’s labor force, and their remittances have provided much-needed funds to the government. Furthermore, the country’s government has facilitated the movement of Yemenis to Saudi Arabia. Obtaining a visa and a residency permit were easy and uncomplicated. Yemenis could even own businesses in Saudi Arabia.
While Yemen’s economic prospects depend on the financial support of the GCC, the political development of the Arab states in the region is crucial for the future of the country. Yemen is signed to the Djibouti Code of Conduct, a regional initiative to combat piracy. But Yemen’s past leadership failed to pursue a coherent regional integration strategy. Despite ratifying the U.N. Convention against Corruption, the country still lacks a coherent approach to regional cooperation. Local conflict parties often attack each other for connections with regional allies.
Probationary period for non-Yemeni workers
The Ministry of Labor, Social Affairs and Youth issues the work permit for a non-Yemeni worker. It specifies the conditions of the permit and the fee for obtaining one. The Ministry should complete renewal procedures within two weeks from the date of expiration of the worker’s work permit. The work permit is required to show information about the worker. In cases where a reciprocal arrangement is in effect, the fee for the work permit is waived.
In Yemen, the contract of a Yemeni worker can specify a probationary period of up to six months. If there is no probationary period, the contract period is unlimited and can be specified by mutual agreement. Moreover, if the period of probationary leave ends, the new contract will be valid for the same duration as the initial one. The contract of a Yemeni worker may be renewed once it expires.
The maximum probationary period depends on the position. Generally, the higher the job, the longer the probation period. For example, in France, the maximum probationary period for office workers is two months, while it is four months for executives. It should be noted that 22 countries require a medical examination before hiring an employee. Therefore, it is important to ensure that the new employee is physically and mentally capable of performing the job.
Impact of minimum wage on employment
Minimum wages in Yemen are set by the Low Pay Commission. The commission is concerned with the high unemployment rate and a lack of youth employment. The commission suggests that the minimum wage be set at the level where it would promote the employment of youth. Firms might not be interested in hiring inexperienced people due to the high wage bill, which may cause them to not hire young people. Young people are stronger and quicker in production, but their labour cost is higher.
In the private sector, minimum wages have been introduced in most countries, but with a lag and great variation. In East Asia, for example, more than 20 countries raised their minimum wage last year. Yemen, like many other Arab countries, has ratified the Minimum Wage International Convention (C131).
The classical labor market model argues that the minimum wage would drive the level of wages and employment in a country. But the minimum wage law may lead to fewer jobs and lower wages, which would reduce the dead weight of unemployment. Yet new research shows that the benefits of a minimum wage law are small and vary widely. This study also shows that the minimum wage increases the cost of many small businesses. However, it may not affect the overall unemployment rate.
As the National Minimum Wage in Yemen rises, employers must pay young people a fair wage in the equivalent adult occupation. This wage must be two-thirds of the minimum wage for that occupation. In addition, the Council of Ministers may set the minimum wage for some jobs. However, young people who work with their family do not fall under this requirement. The young person must work in an environment where they enjoy good health and social conditions.
Even though the Yemen revolution has resulted in a new government, thousands of people continue to live in substandard conditions. Due to the harsh economy and lack of social mobility, many Yemenis are forced to work in conditions that do not allow them to enjoy their rights. For example, 13-year-old Waheeb Abdul-Wahab works in a mechanic shop with his brother Majed. He earns YR 1000 a day for a full day of work.