Structural demand for migrant labour: a bottom-up analysis of labour market segmentation in Saudi Arabia

ABSTRACT

Combining insights from the new labour market segmentation approach and the labour process theory, this qualitative case study research critically examines how workplace dynamics shape the divisions of labour in Saudi Arabia. It draws upon secondary sources and in-depth investigation in a joint venture in the Saudi petrochemical sector. The results question the prevailed institutionalist explanations on the reliance on migrant labour in the Arab Gulf capitalisms. Analyses of secondary data on the Saudi labour market and the case study firm show the need to account for both, (1) the institutional structure that controls the standards of living of migrants (exemplified in the Iqama and Kafala systems), and (2) employers’ discriminatory practices to ensure the lowest cost of labour, in particular contracting, pay and training. Both factors have resulted in the employer not only limiting upskilling for migrants but also avoiding the employment of high-cost labour i.e. Saudis, which feed back to the labour market at large. Theoretically, the paper highlights the need to consider the ‘value of labour power’ to grasp the reality of the migrant division of labour in the Arab Gulf countries.

KEYWORDS:

• Migration
• segmentation
• kafala
• labour power
• gulf cooperation council

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 Marx links the qualities and quantities of labour power using the term simple average labour, since the value of a commodity represents a specific quantity of the simple labour power embodied in it. To clarify, if a commodity is produced by a small quantity of complex/skilled labour, it is still a productive expenditure of human organs (brains, muscles, nerves etc.) possessed by an ordinary worker, which makes up labour power pure and simple. Therefore, in the production of commodities, Marx ([1867] 1990, 135) argues that ‘more complex labour counts only as intensified, or rather multiplied simple labour, so that a smaller quantity of complex labour is considered equal to a larger quantity of simple labour’.

2 To calculate the percentages as shown in figure 4.2, the researcher grouped workers into Saudis and non-Saudis. He then divided the number of workers in each category by the total number of workers. For example, the total number of unskilled migrants is 5,682,012, this is divided by the total number of migrant workers which is 8471,354 67, giving 67%.