Labor Market Effects of Immigrants in UAE - Essay Example

Labor Market Effects of Immigrants in UAE Executive Summary United Arab Emirates receive thousands of immigrants annually. In this paper, analysis of immigrants in the UAE will be conducted, specifically on the effects of immigration on the UAE labor market. The paper starts with statistical acknowledgement of immigrants within the UAE population. Subsequently, positive impacts of immigration on UAE labor market are discussed, which include expansion of labor markets and reduction of minimum wages. In addition, negative impacts of immigrants in UAE are discussed, which include increased potential for socio-economic problems, and deterioration of labor rights. Throughout the analysis, statistical figures and theoretical statements are used in establishing the relationship between immigrants and labor market in the United Arab Emirates. Finally, a personal account of the positive and negative impacts of immigrants in the nation’s labor market is provided. Introduction Immigration, which entails moving into a new country with the sole purpose of setting up permanent residence, affects the economy. For illustration purpose, the movement of Europeans from Britain, Italy and Spain into America was the largest form of immigration in human history. Despite having citizenship in their native countries, European settlers moved into America with the sole purpose of establishing permanent residence in the new nation. Presently, immigration still occurs. Middle East nations like the United Arab Emirates receive thousands of immigrants annually from India, Pakistan and Bangladesh among other countries. Some of these immigrants have legal status, which means they have been cleared to enter and reside in the UAE awaiting citizenship. However, others are illegal immigrants entering the nation without receiving clearance from relevant authorities (Sylvia & Thurman, 2012). Whatever the status, it emerges that a substantial portion of those entering the UAE are seeking refuge from harsh economic conditions in their native nations. Of all the Middle East nations, the United Arab Emirates receives the largest number of immigrants. Based on UN statistics, 43% of immigrants in the Middle East reside in the UAE, while the remaining percentage is evenly distributed among nations like Kuwait, Qatar, Bahrain and Saudi Arabia (Sylvia & Thurman, 2012). Apparently, the population of immigrants in the United Arab Emirates has increased since the late 1990s. Information from Gulf Research Center shows that in 1975, there were 477,039 immigrants in the UAE. In 1990, the number of immigrants in UAE had grown to 2 million. In 2010, the figure stood at 6 million. In 2010, the total population of UAE was approximately 8 million. 13% of the entire populati0on comprised on native Emiratis while 87% were immigrants from all over the world. Presently, 90% of the labor force in the UAE is made up of immigrant workers (Card, 2011, p. 81). Positive Effects of Immigrants in the Labor Market At this juncture, it is worth acknowledging that most immigrants entering the UAE are persons looking for employment. As acknowledged above, a substantial portion of the nation’s labor force is made up of immigrants. Undeniably, such a large portion of immigrants impacts a nation’s labor market both positively and negatively. With respect to the UAE, one positive effect of immigrants is expansion of labor markets. Observably, immigrants increase a nation’s population. In the absence of immigrants, United Arab Emirates would have approximately 2 million people (Card, 2011, p. 78). However, immigrants have increased the nation’s population to more than 8 million people. Technically, increase in population causes a corresponding increase in consumption. The large number of immigrants increases the demand of goods and services by consumers. Increased demand triggers a corresponding increase in production. Additional industries must be established to cater for needs of an increasing population. These industries require a large labor force for operation. Therefore, it is evident that immigration expands the UAE labor market (Card, 2011, p. 78). In a nation’s labor market, immigrants also impacts positively through significant reduction of minimum wages. In 2000, the annual minimum wage for unskilled workers in UAE was AED 3,300, which is equivalent to US$900. As from 2012, the minimum annual wages for unskilled labor had dropped to AED 2,000; equivalent to US$540 (Sylvia & Thurman, 2012). Despite the relatively rising inflation rates in UAE, the minimum wages are plummeting. This downward trend is attributed to the increasing number of immigrants. Most immigrants entering the UAE are desperately seeking employment opportunities. Expectedly, the minimum wages in immigrants’ native countries is vulnerably low compared to that in the UAE. Based on the aspects of economic desperation, employers in the UAE can hire willing immigrants cheaply. The trend of willful acceptance of low wages by immigrants is increased by the illegal status of persons residing in the UAE. Technically, persons found without proper clearance risk deportation to their native countries. Since most immigrants are escaping harsh economic conditions in their original countries, they will willingly cooperate with employers in order to avoid deportation (Sylvia & Thurman, 2012). Therefore, increase in the number of desperate immigrants in the UAE effect the labor market by causing a corresponding decrease in minimum wages. Negative Effects of Immigrants in the Labor Market As insinuated earlier, immigrants are not without negative impacts to the nation’s labor market. Increase in the number of immigrants lead to new social-economic problems within the labor market. One of such problems is economic inequality. Primarily, native Emiratis are wealthy compared to immigrants in the UAE. Rising number of immigrants causes a further reduction in minimum wages. On the contrary, reduction in minimum wages causes an increasing profit margin for Emiratis employers (Smith & Tran, 2013, p. 25). Theoretically, continued reduction in wages could usher in unprecedented challenges to the UEA labor market. Lowly paid workers are known to engage in protests and demonstrations. Currently, the minimum wage in UAE still favors most immigrants from poor nations like India. However, it may reach a time when immigrants collectively demand for a change in the downward trend of wages. Admittedly, the native population of Emirates is absolutely low compared to that of immigrants (Smith & Tran, 2013, p. 30). In this case, increased inequality between natives and the work force may ignite economic unrest. Therefore, current effects of immigration in the UAE, especially reduction in minimum wages, could be building a time bomb in the country’s labor market. Another negative effect of immigrants in the UAE labor market is deterioration of employees’ rights. Employees’ rights in terms of fair workplace treatment and safety measures are essential in ensuring a healthy labor market. However, mistreatment and exposure of employees to unsafe working conditions stains UAE’s labor market at the global arena. Over the past years, there have been increasing incidences of employees’ mistreatment by employers in the UAE. Currently, the UAE government enforces the Kafala system where immigrant workers must surrender their identification and travel documents to their employers (Smith & Tran, 2013, p. 34). Allegedly, confiscation of documents by the employers is meant to protect native Emiratis against harmful potential of immigrant workers. However, the alleged function of the Kafala system has failed in its purpose. Such systems sponsored by the UAE government have increased abusive labor practices in the nation (Sylvia & Thurman, 2012). Because of the increasing number of immigrants, the abusive labor practices are bound to take an upward turn. Consequently, presence of immigrants in the UAE will eventually damage the nation’s labor market profile in terms of labor rights abuses. Personal Opinion I am in agreement with the notion that immigrants in the United Arab Emirates present both positive and negative impacts to the labor market. However, positive impacts outweigh the negative impacts. In an event that negative impacts outweighed the positive impacts, I think the UAE government would have stopped immigrants from entering into the nation. However, the UAE continues to admit immigrants, who are primarily coming to seek for employment opportunities. In this case, I am certain that immigrants help in shaping the nation’s labor markets, and any potential for negative impacts can be mitigated through appropriate policy initiatives. Conclusion In conclusion, it emerges that the number of immigrants in the UAE exceeds the native population. As discussed in preceding sections, the high number of immigrants causes both positive and negative impacts to the nation’s labor market. Among the positive effects include reduction in minimum wages and expansion of the nation’s labor market. Contrarily, immigrants cause negative effects like increased labor rights abuses and potential for protests and demonstrations by the work force. Whatever the effects, it remains that the labor market in UAE is impacted substantially by immigrants. References Card, D. (2007) Immigrant Inflows, and the Local Labor Market Impacts of Immigration. Journal of Gulf Research, 23(5), 78-82. Smith, L. & Tran, D. (2013) Labor Rights and Economic Disparities for Migrant Workers in the UAE. Journal of Health and Human Rights, 16(2), 17-34. Sylvia, C. & Thurman, P. (2012) Immigrants and the Labor Market: The Economic and Social Impact of a Global Phenomenon. London: Gower Publishing. Read More