Interpreting Middle East Economic News and Analyzing Market Trends

Kuwait’s lawmakers propose raising minimum wage to highest in the world

Kuwait’s National Assembly Building – Source: Arabian Gazette

Kuwait’s dysfunctional parliament is at it again.  This time they are working on a new bill to raise the minimum wage of Kuwaitis to three times higher than the world’s current highest; Luxembourg.


Kuwaiti MPs have proposed raising the minimum wage for nationals to KWD1,500 (US$5,300) per month as part of a raft of changes that would boost the income of residents to among the best in the world.

The proposed minimum wage would be by far the highest in the world – three times the present best in Luxembourg, according to a world ranking by international accounting firm PKF International, based on International Labour Organisation data.

The wage also would increase annually in line with inflation, Kuwait Times reported.

The MPs also want to increase the housing loan eligibility to KWD100,00 (US$353,540) a year, while also lifting the cap on how much women can borrow from KWD45,000 to KWD100,000.

Kuwaiti employees also would receive a higher allowance per child, while retirees could claim KWD100 per child per month.

And unemployed Kuwaiti women older than 55 years should receive a minimum KWD500 monthly allowance, the proposal, put forward by MPs Faisal Al-Kandari, Hamad Al-Harshani, Nasser Al-Meri, and Bader Al-Bethali, says.

The MPs also called for Non-Government Organisations (NGOs) and the public sector to be banned from employing foreigners, except for cleaning and loading jobs.

Such a move would help eradicate unemployment and increase Kuwaiti families’ income, the MPs said.

Parliament is yet to vote on the proposal.

Read the story from Arabian Business.

Which lawmakers came up with this hair-brain idea?  This would be a clear job killer.  One of the challenges the Kuwait government faces is promoting private sector jobs for Kuwaitis as the working age population swells.  How will this new law encourage this?  At the moment, the government gives private sector employers incentives to hire Kuwaitis in the form of an additional allowance given to employees to help make up for the higher salary they could have received had they worked for the public sector.  A vast majority of Kuwaitis work for the public sector because of better pay, hours and benefits.  How will this rise in minimum wage ‘help eradicate unemployment’?

Those who are unemployed now are probably lacking the skills and have high salary requirements to make them attractive to any prospective employer.  How will forcing wages up make unqualified people get jobs?

Thankfully, this law has not come up for a vote yet, but should it pass, it will be a lightening-fast job killer at exactly the wrong time for Kuwait.