Economists and business experts believe that the unemployment insurance system was a crucial move to guarantee an emergency source of income for private sector’s employees in the event they suddenly find themselves temporarily or permanently out of a job.
The experts agree that the system will fill the regulatory gap in this regard, and noted that the official cap that was put on minimum wages for Saudis and the social security subscriptions to avoid workplace discrimination was applicable only on Saudis.
The Shoura Council recently approved the unemployment insurance system, which includes 20 articles. The insurance system is designed to partially replace lost wages when a worker or employee is out of work for reasons beyond his control. It applies to all Saudis registered under the social security program of the state, without discrimination.
Economist Fadel bin Saad Al-Boeinein told local media that the system would solve problems that may emerge during the implementation of the new labor law, which allows the employer to dismiss an employee for operational or structural reasons.
“In some countries of the world, the government allocates unemployment benefits for the unemployed until he or she finds a job,” he said, adding: “In any case, applying the system through the social security program is a good move.”
He was also confident that the system would also provide the General Organization for Social Insurance (GOSI) a good source of revenue; estimated to be around 2 percent of the wages of subscribers.
Naif Al-Eid, another economist and researcher, said the system was necessary, especially given its success in many Arab countries. “Implementing the system in the Kingdom will reduce unemployment rates, and raise rates of employment in the private sector,” he said, pointing out that the latest statistics showed the workforce strength in the country stood at 11,286,744 in 2013.
Al-Eid, however, cautioned that the Saudi labor market faced big challenges including the large number of law cases that negatively affect the market. “This obviously indicates the importance of supporting labor market with further reforms that should make the private sector a safe environment to attract more Saudis,” he said.
Hadi Al-Faleh, head of human resources at a private sector firm in Riyadh, said the system has positive implications on job security for Saudi employees. “It will greatly contribute to the Saudization process of jobs in the country,” he asserted.
Unemployment insurance key to secure private sector jobs
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SAUDI Arabia has one of the highest ratios of young men and women in the world when compared to the national population. But at the sametime, expatriates are one-third of the total Saudi population. So, why do we have unemployment in a country that has the strongest economy in the region?
Economic booms don’t last forever. And since the foundation of the modern-day Saudi Arabia in 1932, the Saudi government took care of the old and the young. It provided free education, free health-care and on top of all these, did not impose income tax.
Education is free even at the university level and every student attending the university, male or female, gets a monthly allowance equal to about $ 300. As for the health care, everything is provided by the government and if the treatment is not available in one city, then he or she is transferred to a bigger medical center within the Kingdom or outside the Kingdom. Recently, the government announced an increase in the daily allowance for anyone accompanying a patient being treated outside his hometown or outside the country. In another word, if a patient is from any city outside Riyadh and is being treated at a Riyadh hospital, then the person accompanying the patient gets $ 80 a day and if the patient needs treatment outside Saudi Arabia, the person accompanying the patient gets about $ 160 a day as daily expenses. Cost of the medical care and plane tickets are paid by the government. So, it is clear that the young generation in Saudi Arabia don’t have to worry about bank loans to complete their college education. In other words, the Saudi youth are many steps ahead of others in the world.
Many young Saudis are unemployed. But, are the doors closed? No, they are not. The government has announced many measures to employ Saudis, but the efforts need cooperation between the government and the youths.
There is Nitaqat and labor rules requiring the companies to hire Saudis. But, the Saudis are not taught at an early age the importance of work ethic.
They must be taught at the elementary and high school levels the importance of doing things done by an outsider, such as cleaning classrooms and taking care of some of the school’s activities, like being the ones who sell school lunches. This was done in the past.
The students used to sell candies to their classmates in a place called (Magsaf) or mini mart at the schools. At home, the young must be responsible for cleaning their rooms, taking out the garbage and cleaning their own cars. We don’t need a foreign worker to clean the family car. This way, the young will know that working is part of a daily routine. When we look at the huge Saudi universities, it is easy to see the large number of unskilled workers being brought from faraway countries just to arrange books at the library or prepare the morning coffee. In the past it was different. I still remember until 1974 in many cities in the Kingdom, many works were done by Saudis. Yes, there were few expatriates, but, Saudis used to fix the sewage system, do the schools' maintenance etc. Seeing a Saudi youth at a construction site was the norm.
Many existing old buildings in the country were designed and built by Saudis. Saudi contractors, masons, electricians and painters were involved. It was the practice in the past, so it can be done at present and in the future.
Now, life is tough and governments can’t provide jobs to everyone. Young Saudis must take any job to make money, gain experience and at the same time look for better jobs instead of just sitting down and waiting for the right job opening. There are always jobs available for immediate hiring for the Saudi youths. A few months ago, McDonald’s announced job opening for Saudis offering monthly salaries equal to $ 1200 initially including training and health insurance. And remember, there is no income tax. A monthly salary of $ 1200 for this kind of job with no tax is considered high according to international standards. This is just an example of the many opportunities available for the youth. There are hundreds of vacant jobs that can be filled by Saudis. We also remember yesteryear when many Saudis worked at Aramco cafeterias, serving food to the workers and cleaning dishes and they did that with pride.
In Saudi Arabia, the education system needs to be changed. Students should be taught the meaning of work ethic. The materials in the school curriculum should be changed to groom the students for the job market. The Saudi population is on the increase and ironically, so is the number of expatriates. The Saudi job market is one of the largest in the world and the number of Saudi unemployed is also on the rise.
It is sad to see Saudi youths cruising the streets on cars bought by their parents or sitting in coffee shops and not utilizing their skills in serving the society. The number of jobs that can be filled by Saudis are in the hundreds of thousands and one of the many places where unemployed Saudis can work are the same coffee shops where many Saudi youths spend most of their time.
Many industrial cities in the Kingdom have openings for skilled and semi-skilled workers and, for an example, a Saudi can make thousands of riyals every month by learning the skills of an industrial painter. Our fathers worked as industrial painters during the construction of Aramco gas and refinery plants in the 1940s and some of them didn't even have an elementary education. So, why can’t our youth with their higher education do it now? Our youth must be taught at home and at school that the free lunch time can be over without any warning. The oil reserve that we have will not last forever.
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