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Monday, June 14, 2021

Researchers: Qatar’s labor policies helping fight income inequality

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Labor camp

By importing a huge labor force from poor countries, Qatar is actually doing more to help counter global inequality than its well-off peers, a pair of American academics has argued.

Offering a contrarian perspective on Qatar’s migration policies in an essay recently published in New Republic, Eric Posner and Glen Weyl – both University of Chicago professors – say this country’s high use of foreign labor is helping to raise income levels in some of the world’s poorest countries.

They point out that low-income laborers from Bangladesh, India and elsewhere make significantly more money working in the Gulf than they would in their home countries, and most of their earnings are sent back home. This enables their family members to acquire basic services such as health care and education.

“By welcoming migrant workers, the UAE and its neighbor Qatar do more than any other rich country to reduce global inequality,” they said.

Qatar has one of the largest migrant workforces, relative to the number of nationals, in the world. Tens of thousands of new migrants take up residence in the country each month, driven in large part by the need for laborers to construct the vast amount of infrastructure needed for the 2022 World Cup.

The professors further argue that – while not palatable to human rights groups – the many restrictions blue-collar workers face here and in the rest of the Gulf are needed to reassure locals skeptical about importing such a big foreign workforce.

“Reducing inequality will require uncomfortable tradeoffs. Qatar would not welcome so many migrant workers if it had to give them generous political and civil rights …

The many unappealing aspects of the system – the migrants’ limited economic, political, and social rights, their segregation from the citizenry, and an authoritarian enforcement regime – seem necessary to maintain political support for the migration policies that help to reduce global inequality.”

Scrutinizing the tradeoffs

Workers in Qatar exit bus.

While Posner and Weyl argue that limiting the rights of foreign workers is needed for the system to work for Gulf governments, other researchers have said restrictions leave low-income laborers vulnerable to exploitation and thus unable to accumulate the wealth that they set out to earn.

In his 2012 paper, “Why Do They Keep Coming? Labor Migrants in the Gulf States” (registration required), former Qatar University assistant professor Andrew Gardner argued that the popular narrative of foreign workers yielding a certain portion of their rights in order to secure economic opportunities breaks down under scrutiny.

“I have repeatedly encountered men and women for whom a sojourn in the Gulf states has been a financial catastrophe: by entering into an agreement to travel to the Gulf, these men and women enter into a system that is fully capable of separating them from the tiny fortunes they and their families have invested in sending them to the Gulf in the first place,” wrote Gardner, who is currently an associate professor at the University of Puget Sound.

Migrants and their families must frequently borrow money to pay fees charged by recruitment companies in their home countries.

Compounding the problem is that roughly 20 percent of foreign workers are promised a salary that’s higher than what’s stated in the contract they’re presented upon arrival, according to a separate 2013 study by several Qatar University researchers and other academics titled, “A Portrait of Low-Income Migrants in Contemporary Qatar.”

Workers

Still, those authors found that workers whose contracts had been “switched” were only marginally less satisfied with their roles than those who were unaffected, suggesting that the changes were not always seen as a big issue by the affected workers.

The researchers, who interviewed nearly 1,200 low-income expats in early 2012, found they were paid a median monthly salary of QR1,000 (US$274) and sent home an average of QR764 (US$209) each month.

Those remittances add up to be a major source of income for many expats’ receiving countries, totaling some QR40.55 billion ($11.14 billion) last year, according to the Qatar Central Bank.

Fighting inequality, Gulf style

Posner and Weyl acknowledge that the income gap within Gulf states is among the largest in the world, with nationals earning many times the average salary of foreign laborers.

Nevertheless, the volume of migrants who have traveled to the Gulf in pursuit of economic opportunities means these countries have helped make a greater dent in global income inequality than most rich countries, they argue.

The researchers compare the Gulf nations’ impact to efforts made by members of the Organization for Economic Cooperation and Development, a group of 34 of the world’s richest countries.

They argue that wealthier nations try to reduce income inequality primarily through foreign aid and domestic policies, such as minimum wages and tax systems that effectively redistribute wealth.

“We citizens of OECD countries take pride in our political and civil rights, and our generous welfare systems. Yet we maintain our high standard of living by giving no rights and trivial money to people who live outside our arbitrary borders. While we fuss over whether we should raise or lower our marginal tax rates, we ignore the plight of the most desperate people in the world.”

While Posner and Weyl discuss how wealthier countries could dramatically help the world’s poorer citizens by adopting more liberal immigration policies, they stop short of advocating that other nations should import immigration policies from the Gulf:

“The GCC model of accepting migrants on economically and politically subordinate terms, though not humanitarian on its face, has proven so in practice. If this model were adopted in rich countries, then inequality – both political and economic – would dramatically increase within our own societies. This could undermine some of the liberal character we all prize, and it would certainly make all of us even more uncomfortable about inequality than we already are. But the benefits for the world’s poorest people would be vast.”

Thoughts?

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Myrddin
Myrddin
6 years ago

As the traditional saying goes ” you can’t polish a t#rd”
“You can if you freeze it first” was the counter once offered by Roman Polanski, I believe?
In this case it appears the University of Chicago is offering its services as the freezer?

Myrddin
Myrddin
6 years ago

Additionally – does anyone else share my suspicion that publicizing this academic essay is a pill sugar coating precursor to the announcement that, actually the WC is in the bag, nothing will change.

Thoughts?

Cerebus
Cerebus
6 years ago
Reply to  Myrddin

The research is just simply discounting the humanitarian issues and looking solely at the economic impacts in the home country, not the country from where the remittance comes from. From that sole perspective the conclusion is sound. Its not advocating in anyway that the means justify the ends, rather that the economic impact is such that it has a large impact on the families in the home country and their ability to access basic needs such as healthcare and education that they were or are not normally able to get because of their dire economic straights.

A_qtr
A_qtr
6 years ago

Blasphemy … What is this.. Has Dohanews.co traded it editor in for a Gulf News editor? You sale outs…

Besides what two so called professors from a small place like the university of Chicago know???

This article makes me so sick … Shame

desertCard
desertCard
6 years ago
Reply to  A_qtr

Umm UC is considered one of the best universities in the world.

Abdulrahman
Abdulrahman
6 years ago
Reply to  desertCard

He was being sarcastic 😉

A_qtr
A_qtr
6 years ago
Reply to  Abdulrahman

hahaha

desertCard
desertCard
6 years ago
Reply to  Abdulrahman

Yeah I caught on after posting. Slow on the draw today.

xlprofessor
xlprofessor
6 years ago
Reply to  desertCard

Actually, the University of Chicago economics department is one of the most controversial in the world. Neoliberalism was essentially born there and they continue to be a bastion of doctrinaire rational choice economics. They call them Freshwater economists. If these guys are economists, you can be pretty sure they down the center neoliberals.

MIMH
MIMH
6 years ago
Reply to  xlprofessor

You can be sure of one thing, put two economists in a room and they will both put forward different theories. It’s not unique to UC.

DJ25Q
DJ25Q
6 years ago

Maybe I can’t talk in numbers, but I’d love to have these “professors” in the blue collar’s shoes , before publishing such study. PATHETIC indeed !!!

DJ25Q
DJ25Q
6 years ago

Side note: would these professors reach the same conclusion if they were paid less than their equivalent from different nationality? just wondering….

MB
MB
6 years ago

Wonder who paid for this amazing study! One thing to say for them, definitely thinking outside the box.

Abdulrahman
Abdulrahman
6 years ago
Reply to  MB

Probably not the same people who pay the Guardian for all it’s Qatar articles 😉

ChaTo
6 years ago

By the same argument, a solution for income inequality in the US would be to re-instate slavery for just a few years. The economic argument is precisely the reason why human rights are inalienable: people are not free to give them away, not even in exchange of money.

Abdulrahman
Abdulrahman
6 years ago
Reply to  ChaTo

Sorry, but could you explain who would be enslaved in your scenario, and how would it be beneficial for them?

Also, in that scenario would the slaves have any rights? Will their master own their children? Can the slaves be sold? Will they be taken against their will? Will they all be black?

MIMH
MIMH
6 years ago
Reply to  Abdulrahman

Black is good, I think brown is also acceptable, well except the good looking women.

Mohammed Albanai
Mohammed Albanai
6 years ago
Reply to  MIMH

so glad im an acceptable slave in your eyes. can you now explain how re establishing slavery in the US beneficial to them?

MIMH
MIMH
6 years ago

I was just being sarcastic to Abdulrahman’s comment above in response to the original comment. In fact I prefer my slaves to be Swedish and cute

Abdulrahman
Abdulrahman
6 years ago
Reply to  MIMH

I got your joke 😉

Restie
Restie
6 years ago
Reply to  ChaTo

It already exists in the US in form of undocumented labourers. Go to any Home Depot or Harbor Freight in southern states before 9:00am and you’ll Hispanic immigrants willing to work off the books for under minimum wage. The same goes for fruit pickers, 50% of the migrant-farm worker population is made up of illegals, helping to keep the already subsidized costs of produce down.

The Reporter
The Reporter
6 years ago
Reply to  Restie

Desperate people do desperate things to survive – it doesn’t mean that they have volunteered for exploitation.

Restie
Restie
6 years ago
Reply to  The Reporter

Absolutely not, but it’s a more apt analogy than the US reinstating slavery, as mentioned in the parent comment.

Cerebus
Cerebus
6 years ago
Reply to  Restie

The illegal immigration problem in the US could easily be solved by changing the numbers to match the labor market demands. The US needs cheaper labor sources (not arguing suppressed wages, but just lower overall for unskilled labor) as evidenced by the market pressures that create the immigration issues to begin with. Three central American countries alone gain $10B annually in remittances from the US. http://www.huffingtonpost.com/andrew-wainer/remittances-and-immigration_b_2010873.html Which is far more than the stated amounts from the essay quoted above, and far less than what the US directly sends as aid to these countries through direct government assistance.

KingOfKings
KingOfKings
6 years ago
Reply to  ChaTo

Only difference is that if you report any such activity ( and I have done it), the business doing such a thing is doomed. In Qatar, you report this and you go to jail 🙂

MIMH
MIMH
6 years ago

At last, rather than the moaning by expats a study that tells the truth, they all come for the money. (Well most do). We pity the poor labourer but as long as he gets paid he is better off than in his own country where there are no jobs. They come to a place where a Filipino secretary can make more than a senior engineer in the Philippines, an Indian engineer can make more than a doctor in India or an Indonesian accountant can make more than a policeman in Jakarta. Ok the last one is not true the policeman makes a fortune through corruption and probably makes more than a western manager in qatar……

Bornrich
Bornrich
6 years ago
Reply to  MIMH

Nobody will disagree with you MIMH, your argument holds. That’s why the North Korean story (if true) is now being used against Qatar as it is unquestionably wrong on all moral grounds.

MIMH
MIMH
6 years ago
Reply to  Bornrich

If the N Korea story is true I think that is more of an indictment of N. Korea than Qatar. I can’t imagine many Koreans coming forward to complain being so scared of their own regieme but I guess you could argue that Qatar companies that used them as a contractor are being disingenious if they didn’t think something was amiss.

xlprofessor
xlprofessor
6 years ago

I read the original article and it is a sneaky argument. They are comparing American foreign aid to remittances from Qatar. I looked it up though; remittances from the US in 2012 were $123 Billion, 23% of the world total, while Qatar was $8 billion. Even if they are sending more home per person from Qatar, which I doubt, it isn’t like it is a model that is transferable to everywhere. If there are 1.5 million developing word expats in Qatar, that would mean sending home about $5300 a year. If American immigrants were sending home only $5300, that would require 23 million people to make up the American average. http://www.pewsocialtrends.org/2014/02/20/remittance-map/

Cerebus
Cerebus
6 years ago
Reply to  xlprofessor

The estimated illegal population in the US alone that participates in remittances is in the 17 million range, but mostly unknown, because there is not a good count on the total number of illegals.

The Reporter
The Reporter
6 years ago

Honestly can’t frame a response to this article. I can’t believe what I’ve read.

Mr. B
6 years ago

These are the same arguments some economists make about the “good” side of sweatshops. It is true that many ex-pats will leave Qatar better off than they started; that it’s a fine conduit point for cash to flow in and then partially flow out again to the poorer sections of the world; that some of the job skills learned by the workers here will go home with them and will make their home countries better.

But that argument always fails to take into account that sweatshop conditions are not necessary for economic growth. You can ethically build a stadium and not kill a hundred workers through accidents and exhaustion; you can import labor to pursue work you’d rather not do and still find a way those workers get reasonable hours, decent healthcare, and basic rights not to be beaten, tortured, or assaulted by their employers.

It’s true, that would be more expensive, and potentially slower. It would mean the elite of Qatar would have to let a few towers take twice as long and they’d have to spend more time sorting through good contractors vs. the unethical ones. They might even have to spend more money on ethic treatment of workers (God forbid!).

If you want to double Qatar’s population, host a World Cup, and create a tourist industry from scratch in less than two decades, yes, it’s likely that people will have to die.

But are such things worth anyone’s life?

The Reporter
The Reporter
6 years ago
Reply to  Mr. B

Qatar will never have a viable tourist industry. It’s a fantasy.

A_qtr
A_qtr
6 years ago
Reply to  The Reporter

actually it already has, not a tourist industry that attracts westerns, but one that attracts heavy spending saudis and kuwaitis

Cerebus
Cerebus
6 years ago

http://econ.worldbank.org/WBSITE/EXTERNAL/EXTDEC/EXTDECPROSPECTS/0,,contentMDK:21352016~pagePK:64165401~piPK:64165026~theSitePK:476883,00.html

HelenMS
HelenMS
6 years ago
Reply to  Cerebus

Shame you omitted to mention that this Factbook on Migration and Remittances was published in 2011 and is pretty out of date now seeing as we are at the tail end of 2014. Interesting facts though. 🙂

Cerebus
Cerebus
6 years ago
Reply to  HelenMS

True, its a bit dated, but the latest. Although from a purely academic perspective anything within five years is considered to be relevant for use in research. I am sure that the landscape has shifted some, but the total, global economic impact is quite amazing, yet no single country comes close the US in terms of global remittances.

Deepak Babu
Deepak Babu
6 years ago

“By welcoming migrant workers, the UAE and its neighbor Qatar do more than any other rich country to reduce global inequality,” they said.

It’s not like they actually need these migrant workers. They are just doing them a favor and helping these poor migrant workers, out of the goodness of their heart!!!

A_qtr
A_qtr
6 years ago
Reply to  Deepak Babu

Exactly just like the expats here are not for the money but want to help a third world country rise

Deepak Babu
Deepak Babu
6 years ago
Reply to  A_qtr

Relevance to this article?

Disclaimer – I am here solely for the money.

Brijesh Valsalan
Brijesh Valsalan
6 years ago
Reply to  Deepak Babu

Mr deepak Babu What do u mean .. Are u living in the 21 st century its these workers who have being building all those skyscrapers u see in the Gulf yes they were offered jobs ,, But its a give and take policy ..these worker have toiled hard to make the arab countries dreams come true the Arab population was very small .. they ideed needed these workers to build those skyscrapers u see today

Jaded
Jaded
6 years ago

Everything is awesome.

MIMH
MIMH
6 years ago
Reply to  Jaded

When you are part of a team. Go Team Qatar!

HelenMS
HelenMS
6 years ago

What are these guys ON???
Unbelievable assumptions that can only (IMHO) hurt the snail-pace progress we are encouraging Doha powers-that-be to make the Kafala system open and fair enabling us all as expats to change jobs and exit the country when we want or need to.
I cannot see any sense or reason in their thinking at all – totally beyond me.
I too wonder if they would survive here as blue collar workers instead of fluffing around with their fellow professors up in their high Uni towers making stupid assumptions that are totally unhelpful to the majority’s long held wishes working here!

outdoorsboys
outdoorsboys
6 years ago

Organization for Economic Cooperation and Development efforts are solely to improve lives and give people the wherewithal to support themselves. UAE and Qatar may well be offering employment, but at the cost of removing human rights, the ability to make personal decisions about how and where to live, loss of the right to be treated as an equal. The employment of labourers isn’t done with a view to improve their lives, its done as cheaply as possible for the maximum amount of work that can be squeezed out of them, to improve profit margins. That is a big difference and the attempt here to justify the appalling conditions suffered by developing country nationals employed here is frankly laughable.

YESJAY
YESJAY
6 years ago

Teetering on a thin line between Charity vs Cruelty.

AEC
AEC
6 years ago

This would be the same Chicago school that brought us Milton Freidman and the subsequent Thatcherite/Reaganomics deregulatory disaster?

Expat Girl
Expat Girl
6 years ago

I read the title of this article and was convinced I had logged into The Onion, unbelievable…

Chilidog
Chilidog
6 years ago
Reply to  Expat Girl

Best comment so far….. I was trying to think of a way to say approximately the same thing!

Brijesh Valsalan
Brijesh Valsalan
6 years ago

Indians are being duped by middle men . agents , brokers for higher pay and are asked to pay broker fees around 2000 dollars to get a job in Gulf to know they are being payed just 1000 qatari riyals its sad .. most of the indians dont know working as a laborer in kerala you could earn around 20 dollars a day for 8 to 9 hrs work we have workers coming in from neighbouring states for work

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