Egypt sees consensus over minimum wages rise, differences over amount

The draft state budget, which was approved on Wednesday by Egyptian cabinet for the new fiscal year that started from this July, raised the country’s minimum monthly wage to 700 Egyptian pounds (117.8 U.S. dollars).

The minimum monthly wage would be increased to 1,200 pounds in five years, added the budget, which aims to achieve social justice and revive the deteriorating economy after the unrest in the beginning of this year.

Although the need to increase the minimum wage is a national consensus, there are a lot of differences concerning whether the amount of the minimum wage announced in the new budget is sufficient, Egyptian analysts said.

Abd el-Rahman Khir, a member of Egyptian Supreme Council for Wages (SCW), disagrees with the value of the minimum wages and considered it “insufficient.”

“The finance minister has announced the rate of the minimum wage without consulting the concerned parties, neither employers nor employees,” Khir said in an interview with Xinhua on Saturday.

He said 700 pounds is not enough for Egyptians to live with dignity, stressing the budget didn’t consider the living expenses in the country.

“The government has to provide the people with reasonable minimum salaries until the economy get recovered, in the same times trying to control the market prices,” added Khir.

Ibrhaim el-Azhary, general-secretary of Egyptian Labor Union, also expressed his disapproval for the rate of the minimum wage and considered it a “violation of the law” as the finance minister didn’t consult the SCW, which includes representatives of the labor and industries union.

“The labor union rejects the announced value as it didn’t considered the people’s living expenses, such as accommodation, medical treatment, transportation and so on,” el-Azhary said.

Raising the wages was one of the urgent demands of the massive protests that ended former President Hosni Mubarak’s 30-year ruling and the constant sit-ins in the transitional period. A lot of people have been calling for 1,200 Egyptian pounds as the minimum level of monthly wage.

But it seems the government, facing the shortage of economic resources, is unable to meet such a demand after the whole economy was worsened by the protest.

The deficit in the new budget volume reached a record 164 billion Egyptian pounds, accounting for nearly 11 percent of GDP.

In a press conference, Finance Minister Samir Radwan said “it is impossible to raise the minimum wages during the coming fiscal year to 1,200 Egyptian pounds. Such a decision will represent a burden on the public budget.”

Radwan said that as the value for the minimum wages is increased to 700 Egyptian pounds, 1.9 million people will be moved from under the poverty line.

The International Labor Organization praised Egypt for taking such step and it was regarded as the beginning of reforming the current wage system, Radwan said, adding it’s not the end of a long road.

According to Adel el-Sobhy, chief of Egypt’s Marine Transportation Labor Syndicate, the declared minimum wages is reasonable and persuasive in light of these difficult economic circumstances, and it will be increased and rewarding by time.

He expected two years for the country’s economy to get recovered and the minimum wages can be raised again.

Wage rising in Egypt was always accompanied with increase of the market prices, especially people’s basic commodities like food. Egyptians were always waiting for the price increase in July every year, which is about 10 to 30 percent of their basic salaries.

Based on the old experience of inflation during the former regime era, el-Azhary expected once applying the announced wage increase, food prices will rise again, stressing that the government should adopt effective measures to control the market prices and reduce inflation. (1 U.S. dollar = 5.94 Egyptian pounds)

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