UAE More Enlightened on Foreign Worker Issue than the U.S.?

'Emiratisation' encourages jobs for citizens, while U.S. employers are rewarded for hiring aliens

By David North on January 3, 2023

Is it possible that the United Arab Emirates (UAE), notorious abuser of foreign workers, is more enlightened in part of its immigration policy than the U.S.? Or appears to be?

If you define things very narrowly, they are!

This revolves around a term I have never seen before: “Emiratisation”, reported by a publication I knew nothing about, the Khaleej Times of Dubai (which I read in English), and a currency new to me, the UAE’s dirham, which is worth about 27 U.S. cents. For a better and longer description of the program than available in the newspaper, see here.

What the UAE does that the U.S. does not do is to fine employers who do not (albeit very, very slowly) replace alien workers with domestic ones. The monthly fine for not doing so is 6,000 dirhams, which amounts to about $1,600 for each required worker per month. The process of replacing foreign workers with local ones is called Emiratisation.

The demanded percentage is very, very modest. It is 2 percent a year growing until a goal of 10 percent is reached in 2026. The fine is a monthly one for those employers in violation, and the level of the fine increases, by my calculations, at a rate of $270 a month as a violation continues.

The initial goal for employers is one UAE skilled worker for every 50 foreign skilled workers; by 2026 it is to be five UAE skilled worker per 50. There appears to be no requirement dealing with unskilled UAE workers, thus the new rule does not seem to demand that any Emiratis be employed in these jobs.

In comparison, there are no fines in the American system for employers who do not hire American workers — and, in fact, the Optional Practical Training (OPT) program does exactly the reverse, it uses money that should go to the Medicare and Social Security systems to reward employers who hire recent alien college grads. (The subsdy for these employers takes the form of being excused from paying the usual payroll taxes on these foreign workers.)

Comment. UAE employers are mildly encouraged by its government to offer some kinds of jobs to its citizens, while U.S. employers are rewarded for hiring aliens.

Two other things struck me about this program. First, it is blatantly class-biased; no benefits will go to working-class Emiratis. In a sense, we have something like that going on as well; there is a finite number of H-1B slots each year, but no limit on the number of arriving H-2A farm workers.

Secondly, and more positively, the system of increasingly large monthly fines is more aggressive than most labor market punishments in the U.S. Ours tend to look backward and to correct what was wrong in the past. Then the employer pays something and the case is closed.

In the UAE, the employer pays an increasingly steep fine and knows that if it does not correct the situation immediately it will be in more financial trouble in the future; it is a forward-looking enforcement policy — if, in fact, it is enforced.

The author is grateful to an American informant who follows these matters on the internet.