Gone are the days of gameyas [non-bank saving schemes],” commented one middle-aged employee at the Egyptian Tax Authority’s Administrative Affairs Division, summarising changes to his life and those of his colleagues working in the public sector two years after the Civil Service Law was passed.
The law produces little but anger and opposition among state employees.
Gameyas are a social savings scheme in which groups collect from their members a certain amount of money every month and the whole sum is given to one individual in turn.
“It was habitual among colleagues at work to hold gameyas, be it for an emergency or to marry off the children, or even to spend the summer vacation. This habit belongs to the past, however. There is now no extra cash to save,” the employee added.
“The details are intricate when it comes to the effects of the Civil Service Law on salaries. But in short I used to receive LE400 in bonuses before the application of the law. Now the bonus is only LE80,” he said.
Despite the increases in wages in the budget for the current fiscal year, its percentage of total state spending has decreased from 16.1 per cent to 15.4 per cent, according to data for fiscal year 2018-19.
The older law, Law 47/1978 in force before the approval of the new Civil Service Law, stated that employees should receive an annual bonus comprising 10 per cent of basic salary.
However, the new law has fixed the bonus at the same sum received on 30 June 2015 and ended the correlation between the basic salary and bonuses or allowances.
“We used to receive a variable allowance based on accomplishing a certain amount of work that changed according to the job’s nature. This together with other allowances was calculated as a percentage of the basic salary and thus any changes to the basic salary were reflected directly on these payments and on the total payroll,” said Noha Morshed, a researcher at the Real Estate Tax Authority.
One leading protester against the new law, Fatma Ramadan, an employee at one of the directorates affiliated to the Ministry of Manpower, said she was battling in court along with other employees to win a ruling that would increase their salaries to be on an equal footing with their colleagues at the general bureau of the ministry.
“The prime minister issued a decree in June increasing the complementary income [anything above the basic salary] of employees at the general bureau of the ministry, disregarding employees in the directorates,” Ramadan said.
“The fixed complementary income differs according to hierarchy, ranging between LE700 for sixth-degree employees [the lowest] and LE3,600 for the highest,” she added.
Article 41 of the Civil Service Law states that “the complementary income is issued according to a decree by the prime minister, taking into consideration each unit’s nature of work, kinds of jobs, specialisations and the performances of its employees, according to the targets of each minister and after the approval of the finance minister and research by the Agency [the Central Agency for Organisation and Administration].”
The government had justified freezing the variable payments, those calculated as a percentage of the basic salary, saying that this was meant to narrow the gap between state employees’ salaries and restructure salaries more fairly. It seems, however, that the complementary salary is still a loophole in the law that allows for a clear disparity between the pay of state employees.
“Regardless of the details,” said Ramadan, “our salaries used to increase through different bonuses. After the law was applied, these were reduced to an annual raise representing seven per cent of basic salary. This is the only definite increase government employees have received, aside from allowances for price increases, known as inflationary allowances.”
“While we have received inflationary allowances for the last two years, these stood at only seven per cent when inflation rates were increasing drastically,” she added.
Inflation recorded its highest rate of 33 per cent in July 2017 before easing down earlier this year. The annual inflation rate recorded 16 per cent in September 2018, up from 14.2 per cent in August 2018, after its decrease to 11.4 per cent in May 2018, the lowest rate since April 2016.
The monthly inflation rate recorded 2.5 per cent in September 2018. The figures remain within the limits targeted by the Central Bank of Egypt (CBE) of 13 per cent ± three per cent in the fourth quarter of 2018.
Such data mean nothing to the employee at the Egyptian Tax Authority who spoke to Al-Ahram Weekly on condition of anonymity. The decrease in inflation does not decrease its effect on his salary, he said, because of inflation’s earlier skyrocketing rates while his salary was growing slowly.
The employee, a father of two, said “there is no more room for the family to buy new clothes like we used to. It is not that we can’t save anymore. It is more that we can’t even buy the essentials.” \
* A version of this article appears in print in the 22 November, 2018 edition of Al-Ahram Weekly under the headline: A downward spiral?