So Now the Pay Review....

[Pixy]

Well after the bitter disappointment regarding the profit share we wait to see what the pay review brings.

This potentially has a number of aspects that could improve and lift the real income some small amount to where it used to be. There could be increases from or in the following areas:

• Basic Salary Scale goes up
• Step Advance
• Flying Pay Increase
• Productivity Pay Increase
• Callout Pay Increase
• Accommodation Allowance Increase
• Education Allowance Increase
• Telephone Allowance Increase
• Training Allowance Increase (Training Etc)
• Training Callout allowance increase
• Transport Allowance Increase (Training)

Am I missing anything? From the sounds of things those in the training fold should probably be hoping they do not get a decrease as there seems to be too many of them!

Clearly if there is no change to the list above then effectively a decrease in Real Wages will then occur due to the effects of inflation. Real Wages being wages adjusted for inflation.

The British economist John Maynard Keynes accurately described inflation as the means by which governments confiscate wealth. If salaries do not keep pace with inflation then an individual must then necessarily reduce consumption.

While inflation in the UAE has been reasonably static at 1.3% per year for the past 2 years since the salary scales were reviewed in May 2011, it is expected to climb towards 2% this year. This means that a minimum of a 3.4% increase on all the various remunerations listed above will ensure that by May 2014 we are maintaining the same real wage received in May 2011.
This increase needs to be on all aspects except the Step Increase. A step advance is often portrayed as an increase but in fact simply delays the inflationary effect until later. Don’t be fooled into thinking that a step advance (as we got last year) is a wage increase, because the individual steps on the scale remain the same. I.e. anyone joining on step 1 towards the end of this year would get the same as someone joining on step 1 in June 2011 which in fact represents a 3.4% lower wage at joining.

Despite the smoke and mirrors behind Scale and Step increases over the years Real Wages have declined steeply and that’s even before taking into effect the increases in work demanded for those wages.

It’s unlikely any respite will be given on time required from the company to earn the wages. We all know that productivity threshold will not reduce, nor are we likely to have certain duty hours, presently unremunerated, put into the credit hours classification. If anything I suspect more work will be required as this is the less obvious way of reducing real wages.

So we wait. Personally I would rather have a reasonable increase of around 3-4% on all of the above than any profit share. It makes my life more predictable, easier to budget and avoids me having to rely on any profit share to make up the losses suffered through inflation which may be taken care of in one year but not the next.

I ask for little more than to simply earn in real wages what I earned the year before. A step advance would be well received too. That would indicate the company appreciates my loyalty and experience. In return I would give them any and every courtesy to help out, save costs, and go the extra mile to ensure the continuing success and huge profits.