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U.A.E.'s migrant workers get poorer

  • Story Highlights
  • The falling value of the U.A.E.'s currency means migrant workers are earning less
  • Unskilled workers who work to send money to their families have been hard hit
  • Inflation and improving prospects at home mean less incentive for workers to come
  • Lack of labour could delay the $1.9 trillion of construction planned in the U.A.E.
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By Mairi Mackay
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LONDON, England (CNN) -- They're doing the same job. But suddenly Dubai's migrant workers are earning a lot less money.


Many of the U.A.E.'s unskilled migrant workers are 500 dirhams per month poorer

It is a situation affecting the estimated 10 million unskilled migrant workers who supply cheap labor for the U.A.E.'s construction boom.

"This is something which has bewildered them," explains Talmiz Ahmad, Ambassador of India to the U.A.E. who looks after the 1.5 million Indians who live there.

Workers come to Dubai, Abu Dhabi and other parts of the Emirate to take advantage of the higher wages -- which they send home to their families.

"The expatriate worker is not working for himself. He doesn't consume here. He gets free food and accommodation. He is sending money home to his family," Ahmad told CNN.

The economy has changed radically. The depreciation of the dollar has caused the dirham which is pegged to it to drop in value. At the same time the rupee has appreciated.

Migrant workers at the bottom of the scale are feeling the effects most acutely.

Five years ago, a worker from India could fetch four times the wage available at home.

Two and a half years ago, a typical unskilled worker who was paid 600 dirhams ($163) a month which would have translated into around 7,200 rupees. Today the same wage is equal to just over 6,700 rupees -- 500 rupees less.

"That is an extraordinarily big sum of money. It's a big sum of money for everybody but imagine a worker at the bottom of the scale," says Talmiz.

"[The wife] has the burden of feeding the children and sending them to school. Now suddenly she finds that she is getting much less than he was sending earlier," he continues.

It has been a source of deep grievance and has led to a series of strikes.

In the most high-profile protest, between 30,000 and 40,000 employees of the U.A.E.'s largest construction company Arabtec Holding downed tools demanding extra pay.

The employees -- some of whom work on construction of the world's tallest building, the Burj Dubai -- were seeking a pay increase of around 500 dirhams a month because of the currency's declining value.

The 10-day strike only came to a end when company agreed a 20 percent pay increase.

The cost of living is also soaring to record highs. Officially it is 11 percent in the U.A.E. but some economists estimate it is double that off the books.

Accommodation has been most heavily affected by by inflation, mainly because there isn't enough to meet the demand.

"Dubai is a very expensive place to live right now and in particular accommodation is enormously high and it really is an uncontrolled situation," said Saleem Khan, CEO of Turner International Middle East, a construction management company with projects across the region.

Rents have increased by 20 or 30 percent which for some low-paid migrant workers can mean not having enough money to send home.

Despite the abundance of work this can act as a disincentive for workers to come to the region. Especially as high growth rates have generated a building boom in India.

"Very lately, there has been a decline of people coming in to Dubai because there is not enough compensation and expenses being too high. It is not really conducive for them to be in Dubai," Khan told CNN.

If there are not enough workers, this could mean delays for construction. Currently, there is $1.9 trillion worth of building planned in the Gulf.

Some contractors are preparing by looking to other parts of Asia for workers.

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  • "It is harder to get, say, Indians with sufficient skills and in numbers. So we have to seek elsewhere. Chinese are coming in and we are even going for Vietnamese," Gary Hanzard of Arabtec Construction explained.

    While the government may have the surplus petrodollars to raise wages when necessary, they have not done this across the board.

    "If there is inflation above 10 percent there should be a provision to enhance wages in tandem with inflation. This happens all over the world. Why should it not happen here?" said Ahmad.

    But with inflation looking like it will continue rising and prospects for work improving at home, there are currently fewer reasons for migrant workers to stay in the Gulf.

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