Wage structure is an important aspect of the strategic management practice that affects the productivity in an organization. The human resource management team is tasked with the role of ensuring that different roles are adequately compensated and that the employees have a clear, well-defined promotion structure. There is a need for the organization to assess the demand and supply and the interaction of the market forces in the labor market. In so doing, they can determine the right compensation for a particular position. This paper will assess the lines of segmentation in MENA region, causes, and their consistency with the labor economic theories of the wage structure. The paper will also address possible policies that can be implemented to address the issue.
MENA is an acronym for the Middle East and North Africa region. It refers to the Arab region that extends all the way from Morocco to Iran covering most Arab countries such as Libya, Malta, Bahrain, Qatar, Saudi Arabia, the United Arab Emirates, Tunisia, and Kuwait among others. The region makes about 4.5% of the global GDP and only constitutes a small portion of the world population. In spite of this, the region has 60% of the oil and 45% of the natural gasses reserves. This makes it an important player in the global economy and influence. The population use Arabic as the main language, and in some states, Hebrew is also a national language.
The interview revealed that the journalists' terms were favorable in comparison to the other employees. They were provided with a modern workstation and were accorded amenities such as beverages, parking spaces, healthcare, paid leave and a well-structured career path with opportunities for promotion. Their job security was guaranteed, and they were highly regarded by the employer. On the other hand, the janitor and the security officer had deplorable working conditions. The job security and safety was not guaranteed, their compensations were remarkably lower than the journalist. They had no promotion aspiration as there were no proper laid structures that determined their career paths. Their rest area was separate from that of the journalists and was in a deplorable condition.
The interviews helped to shed the lights on the fact that there exist huge differences in the wage structure between the employees working in the same organization. The society has a tendency to refer to a particular career as more valuable as compared to the other. In this case, journalists are highly regarded as compared to the office assistants and the security officers. Their working conditions and salaries do not match the effort they put in their work. In spite of the fact that they are provided with the needed work equipment, they lack the necessary motivation that will enable them to improve their productivity. For the company to avoid public scrutiny, they have employed the services of a third party who avail the employees to the News Agency. Thus, the terms and conditions of those employees are determined by a third party whose ONA has entered into an agreement for the provision of those services. This is a legal technicality that organizations use to shift the blame to other third party contractors.
The study of the wage structure is an important element of economics understanding. Scholars in this field agree that the disparities are associated with the competitive factors such as training costs, work load, success probability amongst other factors. There is a branch of economics that attribute the disparities to the market forces in the labor market. However, the increase in the demand will tend to cancel out with the supply as more people join the profession. Thus, the real remaining factor that affects the structure and the wages is education, training, skills required and experience (Baldwin and Cain). These factors create a barer to entry that makes it impossible for a career to be flooded. The unique requirements make only a few people be eligible and thus shielding a profession from the influx of unskilled employees. Therefore, the jobs that have low entry requirements have high supply as compared to the demand. This allows the employers an opportunity to abuse their position as many people scramble for the few opportunities (Bell and Freeman).
Other factors that have contributed to the differential structures and wages are the increase in the use of technology. More organizations use computers to carry out tasks. The implications are the past professions that could be carried out by an average educated individual now require a highly specialized professional (Acemoglu). This has rendered some employees redundant and thus further increasing the demand for unskilled labor. The increase in globalization has increased the labor mobility, and thus organizations can source for talents globally and at a competitive price. Outsourcing and offshoring make it hard for the employees have much say in the structure and as well in the wages (Borjas, et al).
There exist disparities in the wage structures amongst employees working in the same economy. To address these disparities, the government and the concerned authorities must avail education opportunities to all individuals. They should also draft laws that protect employees regarding the working conditions and minimum wages. The laws should also dictate the benefits that employees should gain at different ranks and as well set out rules governing employees' welfare in third party contracts.
Works Cited
Acemoglu, D. "Why Do New Technologies Complement Skills? Directed Technical Change and Wage Inequality." The Quarterly Journal of Economics, vol. 113, no. 4, 1998, pp. 1055-1089.
Baldwin, Robert, and Glen Cain. "Shifts in U.S. Relative Wages: The Role of Trade, Technology and Factor Endowments." 1997.
Bell, Linda A., and Richard B. Freeman. "The Causes of Increasing Interindustry Wage Dispersion in the United States." Industrial and Labor Relations Review, vol. 44, no. 2, 1991, p. 275.
Borjas, George J., et al. "How Much Do Immigration and Trade Affect Labor Market Outcomes?" Brookings Papers on Economic Activity, vol. 1997, no. 1, 1997, p. 1.
ISTIZADA. "MENA Region Countries List 2016." IstiZada, 2015, istizada.com/mena-region/.
