Report: Higher pay puts family sponsorships within reach of more expats

Family

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Rising salaries among foreign workers in Qatar may make it possible for more expats to move their family members here, shifting the country’s demographic makeup, a Dubai-based research firm has said.

The move would undoubtedly be welcomed by many Qatar residents who are living away from their families. However, an influx of spouses and children would have significant implications for the local economy, which is struggling with a shortage of school spaces and rising rental accommodations.

In a recently released publication, Cost of Living Reports Middle East found that the median monthly salary in Qatar rose to QR9,177 (US$2,520) in the first quarter of 2013, a 6 percent increase from the QR8,654 ($2,376) recorded a year earlier.

Wages are expected to rise a further 8 percent this year as Qatar ramps up its preparations for the 2022 World Cup.

The country is facing even more pressure to offer attractive benefit packages to skilled workers, who may be wooed by opportunities elsewhere – notably Dubai, which is launching into a fresh building boom to prepare for the 2020 World Expo.

“Both (Qatar and the UAE) are competing for the same type of people on a narrow deadline,” said Engy Ziedan, a researcher involved in preparing the cost of living report.

While wage increases will likely be the largest for skilled workers, Ziedan told Doha News that salaries are also expected to grow for mid-level earners. This would mean more expats would meet the minimum salary requirements to sponsor their dependents, her report said.

Skepticism

Others, however, say the government would likely find ways to minimize the number of dependents sponsored by low and middle-income workers.

Increasing the number of expat families would put more strain on already overburdened social services, such as paediatric health care, and remove one incentive for workers to return to their home country before they put down deep roots in Qatar.

Zahra Babar, the associate director for research at Georgetown University School of Foreign Service in Qatar, said GCC nations do this by progressively increasing the minimum salary requirements. In Qatar, it’s gone from QR7,000 ($1,922) a few years ago to QR10,000 ($2,746).

“As wages rise … they set the bar higher and higher.”

Additionally, many of the expats whose incomes hover right around the minimum salary requirement are women, who often face more difficulty sponsoring their spouses than men.

Still, Zieden said she doesn’t believe this will continue indefinitely, as policymakers add up the outflow of dollars sent out of the country by foreign workers. Data released late last year showed remittances totaled QR9 billion (US$2.47 billion) in the second quarter of 2013 alone.

“Remittances (are) nothing but disposable income made in Qatar and spent outside in
another economy. If that opportunity cost is sufficiently high, the country (may look at) easing the visa restrictions rather than moving the cutoff upwards,” she said.

Workforce breakdown

Zieden said high-level executives, experienced project managers and other professionals are most likely to see their salaries rise in the coming years.

At the opposite end of the spectrum, construction laborers and other blue-collar workers will, at best, receive modest raises. Even though Qatar has a growing need for manpower as it embarks on more infrastructure projects ahead of the World Cup, there remains a plentiful supply of laborers willing to relocate from less-developed economies.

But there’s also another cohort of workers with a monthly salary hovering around the QR10,000 mark.

According to figures provided by Zieden, they include (position followed by 2013 median monthly salary and, in parenthesis, 2014 forecast):

  • Receptionist: QR6,500 (QR7,020)
  • Sales executive: QR7,500 (QR8,100)
  • Marketing co-ordinator: QR8,400 (QR9,072)
  • Nurse: QR9,102 (QR9,830.16)
  • Logistics administrator: QR10,500 (QR11,340)
  • Office manager: QR10,500 (QR11,340)
  • IT desktop support: QR11,000 (QR11,880)
  • Teacher: QR12,450 (QR13,446)
  • CAD technician: QR12,600 (QR13,608)

However, Babar said her research suggests the largest number of foreign workers living in Qatar are in low-income positions – some 700,000 individuals, as of late last year – that pay far below the minimum income required to sponsor family members.

“Obviously the population is growing and attracting more skilled and highly skilled people. (But) proportionally, it does not come close to matching the percentage of number of workers at the other end of the spectrum,” she said.

Implications

An influx of families would put additional pressure on Qatar’s already overburdened education system. Figures cited in the Cost of Living report show the number of residents under the age of 19 are forecast to increase 56 percent over the decade, from 289,000 in 2010 to 450,000 in 2020.

The report found that expatriates currently pay an average of US$4,090 (QR14,893) in annual tuition, although costs varied widely between schools. Those teaching the Indian curriculum were the least expensive, while the international baccalaureate topped the scale. The British and US curriculums were in the middle.

(Last year, the Supreme Education Council broke down average tuition fees into slightly different categories.)

Given the relatively high costs of education in Qatar, Zieden said an increase in the number of expat families supported by workers earning salaries just above QR10,000 cutoff would put disproportionate pressure on schools at the lower end of the tuition scale.

Similarly, these families would also be seeking more modest, less-expensive accommodations – something Zieden said developers generally eschew in favor of luxury homes.

“The government is always pushing for top-notch, expensive developments,” she said, adding that high-end homes are currently being constructed at a greater rate than what the market can absorb. “Which is bad, because it leaves units empty,” Zieden said.

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