BEIRUT, 1 May 2008 (IRIN) - With inflation in double digits and the cost of living rising, the government has proposed raising the minimum wage for the first time in a decade, but Palestinians say they continue to be marginalised in the labour market.

Several hundred Palestinians protested at the edge of Shatila camp in south Beirut on 30 April ahead of the 1 May labour day holiday, traditionally a time for workers' to air their grievances.

"We are humans, we have the right to live," shouted the protesters. "We are half humans in Lebanon."

Palestinians in Lebanon are barred from working in 70 professional vocations. They cannot work as lawyers and doctors, and cannot own or inherit property. Unemployment is rife, particularly inside the dozen refugee camps which are home to just over half the country's 400,000 Palestinian refugees. In Ain al-Hilweh, the largest and most dangerous camp, leaders of factions estimate unemployment at 70 percent.

The rise in the minimum monthly wage from US$200 to $300 is the first increase in a decade, but local researchers InfoPro estimate that only 10 percent of Lebanon's 650,000 wage earners take home the minimum wage or less.

Half a million Lebanese are self-employed and would not benefit from the wage increase, while Palestinians do not qualify as they are considered refugees, not citizens in Lebanon.

Lebanese salaries average $500, while the actual minimum wage is around $320, according to figures from InfoPro. Citizens' wages are further supplemented by a de-facto government set of subsidies estimated at $150 a month, through price controls on electricity, gas, fuel and wheat.

Rising prices

Inflation in 2007 hit 16 percent, according to the Central Administration for Statistics.

The General Federation of Labour Unions says a family of four needs a minimum of $640 a month to secure the necessary basket of goods and services needed for a decent livelihood. The figure is based on joint research conducted with the help of the International Labour Organization (ILO).

Workers' unions are demanding that the minimum wage be tripled to around $600 and that wages above the minimum and up to $1,000 also be raised across the board, at a rate that beats inflation. Though widely disputed, estimates put average annual inflation over the past 10 years at around 25 percent. The unions have called a nationwide strike for 7 May.

Fuel prices have been climbing steeply over the past year, with a litre of diesel doubling to $1, while petrol that used to be 60 US cents per litre in 2007 has increased to 90 US cents today. A year ago one US dollar used to buy a kilo of flour for bread. Today it buys 700 grams.

With electricity rationed in Beirut for three hours a day, utility bills for running a generator have quadrupled while in the Hezbollah-controlled southern suburbs, where power cuts are more extensive, residents say they spend around $100 a month paying for their generators, on top of regular utilities.

Fears of violence

One of the Palestinian protesters, Mazen al-Habit, said he was shocked at his treatment when trying to find work having graduated in engineering.

"I was full of hope before graduation but I have no hope now," he said. "No Lebanese companies accepted me and I tried to teach but they didn't give me more than $167, half of which I ended up spending on transport. I worked double shifts but now I would prefer to join one of the Palestinian factions where I will be paid more."

Wisal al-Jishi, from the Palestinian non-governmental organization Najde, said studies show that unemployment and lack of health insurance among Palestinians were key drivers of social unrest.

"Unemployment among Palestinians is causing social violence and we are worried that it also helps to radicalise younger generations," she said. "Some radical groups try to attract young guys with money."

In Nahr al-Bared, Islamist radical group Fatah Islam gained a foothold by distributing money on religious holidays to the young employed.

With a third of the cabinet still resigned, the decision to raise the minimum wage was not passed in the 30 April government meeting. Even when it gains cabinet approval, the new law will have to be passed by parliament which has been closed since late 2006 when the Hezbollah-led opposition walked out of the government.

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