Unemployment

There were two news reports yesterday regarding setting a minimum wage in KSA. Saudi Gazette reported that there were plans for a minimum wage for Saudis whereas Arab News reported that no minimum was being set (for expats).

One quoted that minimum wages causes unemployment, the other stated that it would create more jobs for citizens.

Regardless of which news agency was correct in this case, the common aspects that were striking were the complaint against companies for not abiding by Saudization laws as well as the unemployment figures.

The Labor Minister Ghazi Al-Gosaibi was quoted as saying “I feel ashamed that there are 270,000 unemployed Saudi young men and a similar number of unemployed Saudi young women in a country that employs more than seven million foreigners.” The total population of KSA is 26 million as per Saudi Gazette.

This would suggest that ~25% of the KSA population are expat workers (no surprise there). Also, apparently there are barely 0.54 million unemployed citizens in the country (less than 3% of the actual citizen population and 2% of the total population).

In September the Minister also explained that unemployment is 6% for Saudi men (~240k men) and ~25% for Saudi women (~164k women). The numbers employed are 3.42 million men and ~660k women. If you put all these figures together the numbers that emerge are a little odd.

Extrapolating the official numbers, are about 4 million men and barely 1 million women in the potential workforce out of the whole 19 million population! That represents (at max) 25% of the whole population with women barely 20% of the whole workforce.

Now let’s add another number to the mix. The CIA fact-book states that  ~60% of the population is between15-64 years old (9.5 million men and 7.2 million women).  The most recent numbers from UNICEF state that ~50% of the population is less than 18 years old.

This raises the following questions:

  • Why is 25% of the population part of the workforce when ~50% are of employment age?
  • Is a quarter of the population bearing the burden of the three-quarters?
  • Why is there such a large gap between the stated unemployment rate of 6% and the actual people who are not working?
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