Constant arrival of foreign workers to blame
Although the UAE’s unemployment rate is lower than many Mid-East countries, the national jobless rate is much higher than average due to that population’s desire to work in the public sector, according to official stats.
The Ministry of the Economy reported that the jobless rate across the nation sat near 4.2 per cent in 2009, nearly the same as the average rate in 2008 and better than many other areas of the Arab world.
However, when looking at just the national population, the unemployment rate climbed up to 14 per cent. Nationals make up approximately 20 per cent of the total population.
The report then focused on the expatriates where the jobless rate comes out at 2.8 per cent for 2009, matching the rate for 2008.
Looking closer, it was noted the jobless rate was highest for people who completed secondary school, landing at 6.1 per cent in 2009, while those with a university degree had an unemployment rate of around 4.4 per cent.
Those who had completed preparatory school had four per cent unemployment, those with primary level had 3.8 per cent, those who could simply read had a 0.8 per cent rate and within the illiterate there was only 1.4 per cent unemployment.
When looking at geography, it was noted that the jobless rate was much higher in the rural areas, standing at 7.3 per cent as compared to only 3.5 per cent in the urban areas.
The overall unemployment rate for 2009 was 4.2 per cent on average, although it rose to 14 per cent within the national population, as reported by the Ministry. The higher rate within the group of secondary school grads was likely due to the age of this group, who are coming into the job market later.
An official of the UAE recently analyzed the employed sectors in the area and estimated that over 40,000 nationals of working age are not employed, which pushed the jobless rate to a record high, the most it has ever been in the 39 years since the UAE was established.
Consultant Abdullah Al-Awadi of the National Human Resources Development and Recruitment Authority (Tanmia) noted that the higher local jobless rate is due to the constant flow of foreign workers and the troubles implementing plans for jobs for UAE nationals.
In the UAE, as in other areas of the Gulf, the society suffers from a growing jobless crisis due to more and more expatriates arriving and the inability to fully implement job nationalization programming, as stated by Al-Awadi in an earlier published article in the Emirates Centre for Strategic Studies and Research out of Abu Dhabi.
The statistics note that the 2008 national jobless rate stood at 13 per cent and rose to 14 per cent in 2009.
This translates into 40,000 nationals looking for work, the highest number in the history of the country. The unemployment rate in the past has stood between 3 and 6 per cent, almost equal to levels in the Gulf and around the globe.
Al-Awadi noted that job nationalization remains below public and private sector targets and the ratio of nationals employed in the public sector held steady at approximately 44 per cent throughout 2008.
He commented that the level should be higher with the government’s work, including laws and decisions, to increase that figure.
The current situation is a result of the flow of foreign workers into the UAE. Al-Awadi stated that the current recruitment policies in the public sector need to be changed in order to reach a balance between the foreign and national workers throughout the public sector.
Regardless of the various institutions started in the UAE to address the problem, Al-Awadi notes that the results are not positive.
The figures are convincing experts that an imbalanced situation and “legal gap” exist, possibly because the two sectors are not coordinating. The fact that these negative stats are a result of government efforts to get nationals employed in the private sector is a large problem.
Despite the numerous efforts put forth by the government to encourage nationals to enter the private sector, the latest figures show that group is firmly entrenched in the public sector. This is also despite the incentives offered to domestic businesses for hiring national workers.
The latest report quoted that 45.8 per cent of national workers are employed with the federal government and 39.1 per cent are working in local public sectors. Only 7.4 per cent work within the private sector.
Comparatively, foreign workers are filling up the private sector with 64.6 per cent of all expatriates employed in the area.
Only 2.7 per cent of the foreign workforce is working in the offices of the federal government and 12.2 per cent are working in the local public sectors.
National workers seem to prefer working in public administration, social security and defense areas, a full 61 per cent were recorded in those sectors during 2009. Also education employed 8.7 per cent in 2009.
Foreign workers were mainly employed in the retail, repair and wholesale sectors, where almost 17 per cent are found. Also, 14.6 per cent are employed in the domestic service sector, 13.7 per cent in construction, 8.5 per cent in communication, transportation and storage and a further 7.3 per cent in real estate and business activities.
Figures also show that more women are employed in the domestic services sector, driven by comments from the leaders in the UAE indicating that women need to play a larger role in the economy.
In the early 1970’s only three per cent of national jobs in the seven emirates were held by women, rising to almost five per cent in 1980 and climbing to 9.6 per cent in 1985.
Then in 1995 the women’s share rose to 11.7 per cent and hit 13.5 per cent in 2006. By 2007 it sat at 13.6 per cent and went over 14 per cent in 2009.Paul Holdsworth, Staff Writer, Gulf Jobs Market News