Wage share of gdp in Middle East and North Africa

wageshare

From Timothy Taylor, here is more.

Comments

isn't that just rising oil prices we see in the graph?

Excerpt: "Until now the Arab world’s tiny middle class has relied on state salaries and entitlements, with few ties to free markets."

I don't put stock in Potemkin economies myself.

File under "Fomenting revolution for dummies"

I find it hardly surprising. North Africa and Middle East had very unit labor costs to begin with. Compare any Arab country to a similar post-communist EU country - the Arab country is always the one with higher wages,.even after a decade of decline.

These are wage shares, not wages, that are declining.

Increased global demand for commodities; low productivity growth in the region.

Having worked extensively in the middle east, I would say the implicit view of the elites there (and they are the only ones that matter) is that development is all about finding things for their workforce to do that will keep their minds off of revolt. It is not about creating an efficient economy, there is already enough money from the oil. Its actually a glimpse into our robot future, where the elites look for ways to keep the rest of us busy, and share as little of the rent as they can to do so. Before I realized this, I was full of suggestions as to what could be done to improve the economy of whatever country I was in, make it more efficient and able to compete and trade with the rest of the world. It took me a while to understand actually this was the opposite of what they wanted. It's not surprising therefore wages are declining - the population is growing faster than the rents.

Seems little more than a function of oil prices. The kleptocratic price-fixers certainly aren't going to share the wealth.

Comments for this post are closed