More than half a million Egyptian government employees on temporary contracts will soon receive the minimum wage already given to permanent workers, a public administration official has said.
Safwat El-Nahass, head of the Central Agency for Organisation and Administration (CAOA), the government body charged with organising public administration, last week pledged to extend payments of the new minimum wage to all government employees.
He did not give a timeframe for the full implementation of the wage.
“The minimum wage should ultimately be given to contract employees also. This will cost LE5 billion per year,” Al-Nahas said.
In June last year, Egypt's interim government responded to long-standing demands for labour activists and agreed to grant public sector employees a monthly minimum wage of LE700.
The wage went into effect at the start of August, the beginning of the 2011-2012 financial year, but only permanent government workers benefitted.
The minimum wage is now granted to all new permanent employees regardless of previous work experience or educational attainment, El-Nahas explained, speaking at a conference on the minimum wage at the Egyptian Center for Economic Studies (ECES) in Cairo.
All workers receive at least LE700 on paper but deductions are made for pensions, insurance and tax meaning take-home pay is significantly less.
Egyptian workers in both public and private sectors have long demanded a revision for the country's minimum wage.
Workers' demands were given strength in 2010 by a court ruling in favour of a lawsuit filed by a labour activist demanding the minimum wage be raised for the first time since 1984.
Egypt has an estimated 500,000 government employees on temporary contracts but some can be considered luckier than others.
Around 225,000 have temporary roles in positions called for by Egypt's central administration.
According to the law, they have the right to to receive a permanent contract if their temporary contract is renewed for three consecutive years. This law, however, has reportedly not been obeyed.
The least lucky, on the other hand, are those who were granted temporary jobs on different contracts.
"This happened after the government suspended recruitment in public administration. Amendments were introduced to the public administration law, promulgated in 1984, because it did not include temporary recruitment,” explained El-Nahas.
The salaries for these workers comes not from the part of the government budget allocated to wages, but from other non-employement related areas.
Some take their wages from funds dedicated to training, or even for maintenance or spare parts.
"They were recruited by local authorities outside the rules of public administration. This money should not have been used for this purpose from the beginning, but the employees themselves didn't understand that and it is not their mistake," El-Nahas explained.
This category includes some employees that were hired with renewable temporary contracts valid for 10 or more years, sometimes earning just LE100 per month, El-Nahas admitted.
This is the case for the more than 30,000 employees of the information centres of the Egyptian Cabinet.
Another example El-Nahas gives is of supply teachers for state schools, who are paid for each class they teach. In this case, however, the employees were never formerly recruited nor given the rights of other teachers, who themselves complain of low wages.
Egypt's public sector wage structures are riven with inconsistencies, including large imbalances in salaries between different governmental bodies.
To compensate for low basic salaries, Egypt's public administration has grafted on a complex system of bonuses -- 55 kinds of so-called 'primes' -- many of them worth just a few pounds per month.
The system was reportedly designed to reduce the sums paid by the employer, in this case, the state for insurance.
"Those imbalances won’t be fixed separately from the reform of the social insurance law and healthcare laws. The first imposes a maximum limit for insurance and the second gives a kind of revenue employees benefit from when needed," El-Nahas said.
The large gap between salaries and pensions is another anomaly, according to El-Nahas.
In Egypt, a person's pensions can be just 10 per cent of his final salary before retirement; the worldwide average, meanwhile, is around 80 per cent.
Ahmed Darwish, the former minister of state for administrative development, believes minimum wages should be further revised to reflect education levels.
"The actual wage cap does not encourage education -- that's the message it sends," Darwish said.
According to a study done by his ministry, the minimum wage of an employee hardly able to read and write in 1974 was LE16. Someone with a university degree, on the other hand, was paid LE30 -- more than 80 per cent more.
"This ratio decreased with the years because the government focused on increasing the minimum wage to gain popularity. According to a study done a couple of years ago, LE16 is equivalent to almost LE700 now. The minimum wage of a university graduate should be [much higher] to have the same purchasing power as LE30 in 1974," Darwish explained.
Temporary contracts were introduced to Egypt's public administration in 2000 in a bid to compensate for labour shortages while keeping the state budget at a manageable level.
In the 1980s, the Mubarak regime suspended recruitment in the public sector, in what marked a change of outlook from the Nasser era when every university graduate was said to have the offer of a state job.
Egypt has around 5.8 million people working for the public administration, a figure that might climb to 6.3 million if temporary workers are finally granted tenure, according to El-Nahas.