Last month, a circular from the Ministry of Labour announced the abolition of the tiered minimum wage system based on educational qualifications applicable to Omanis working in the private sector.
The aim is to increase the number of Omanis working in the private sector, so that an Omani worker is given a minimum wage of RO 325 ($845) per month at the start.
The circular was welcomed by the owners of companies and organisations who saw it as a correct decision to increase the number of jobs for Omanis in many of their economic sectors.
They believe that the announcement will encourage Omanis to enter the market instead of waiting for suitably paying jobs, sometimes for many years. With the scrapping of this system, young people can take up employment and gain valuable experience in professions currently occupied by expatriate workers.
Over time, and with experience, their salaries will be raised as soon as they are able to enhance their productivity in their workplaces.
As we all know, the issue of securing employment for national workers is not only a concern of the Omani market alone.
Rather, private sector companies across the Gulf Cooperation Council countries face difficulties in employing nationals expecting high salaries, and end up taking expatriate workers to fill certain positions in their organisations.
Despite the positive benefits of this move, some experts argue that this decision will add to the disparity in wage structures and benefits enjoyed by workers in the private and public sectors.
Regardless, the decision encourages job-seekers to explore employment opportunities in the private sector because of dwindling options in the government sector.
Others believe that the minimum wage decision will likely discourage young people from pursuing their higher studies. Employers are also likely to do away with incentives and benefits that have been in place, they warn.
Nevertheless, it will be evident in the near future whether nationals will flock to the private sector for work or wait for the appropriate time to find work in government institutions.
The latter scenario will likely put pressure on government bodies to provide job opportunities for Omanis, although this decision is designed to reform the labour market.
Oman’s policies have been conducive to the growth of the private sector with a view to supporting stronger investment inflows and thereby creating more job opportunities for Omanis.
This has been reinforced by policies and legislations supporting Omanisation. The latest decision is also in line with international labour laws based on principles practiced by enterprises in free market economies.
The private sector always looks at the productivity of the individual; the higher his productivity, the more incentives and benefits he gets. Productivity stems from good performance and strong skillsets.
Today, unemployment is rife in many countries in the region, which is partly attributable to the expectation of high salaries from nationals. This has created hurdles in attracting more citizens into the private sector.
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