Saudi Arabia has been placed at the second spot in the Arab world for paying the highest minimum wage, but experts say the nation needs to focus on productivity.

“Wage growth is important and Saudi Arabia has made good progress on that front. However, equally important is the need to make improvement in productivity that exceeds wage growth,” John Sfakianakis, Middle East director at Ashmore Group, told Arab News.

He said the challenge is to keep productivity higher than wages, which requires a reallocation of investments.

According to the World Bank, the minimum wage in the Kingdom is $720 per month. Bahrain came in the first place with minimum wage of $800, followed by Oman, Lebanon, Palestine, Libya, Morocco, Iraq, Jordan, Tunisia, Kuwait and Syria. These countries recorded minimum wage of $51.

Abdullah Al-Rubi’an, an economist, was quoted by local media as saying that several countries are trying to improve the minimum wage in a bid to achieve social justice.

Fawaz Alfawaz, a Riyadh-based economic consultant, told Arab News that the link between wages and productivity is “tenuous at best, and is actually weak in an expatriate dependent labor force. There are several steps the government can take to enhance productivity.”

Among the steps he suggested are that the government should stop being the first employer, so that citizens seek jobs in the private sector.

He also said that the expat recruitment policy should gradually be changed to encourage competition among Saudis. Competition will enhance productivity, he added.

The number of workers who do not get adequate wages to cover their basic needs is more than 1.2 billion in the world, according to the World Bank.

Minimum wage is the lowest amount of money paid to workers per hour, day or month.

This amount is determined to cover wages of all workers, or a group of them in certain industries.

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