Egypt postpones decision on minimum wage

Marwa Hussein, Tuesday 17 Sep 2013

Egypt's National Council for Wages fails to reach agreement on minimum wage and postpones decision until January 2014

Egypt's interim Prime Minister Hazem El-Beblawi (Photo: Al-Ahram)
Egypt’s national minimum wage decision will be determined in January 2014, said The National Council for Wages (NCW) on Tuesday.
The revision will include a roadmap aiming to restructure the wage system and fix a minimum and maximum wage.
The council did not manage to change the awaited minimum wage after a three-hour meeting with several ministers, workers, and business representatives on Tuesday.
"It is hard to unify viewpoints and reach a deal in one meeting," Mohamed Zaki El-Swedy, head of the Federation of Egyptian Industries (FEI), told Ahram Online.
El-Swedy added that many factors are to be taken in consideration to determine an adequate minimum wage. "We are waiting for the labour and pensions laws to be revised. The government should be engaged in offering a better health, education and transportation system that will alleviate burdens on the workers."
Ministers of industry, social solidarity, finance, and local development , members of the FEI, and the Egyptian Trade Union Federation, among others, attended the meeting headed by the planning minister.
Egypt's Prime Minister Hazem El-Beblawi told the daily newspaper Al-Masry Al-Youm last week that the government will not increase the minimum wage due to budget allocations.
El-Beblawi’s statements have given rise to many criticisms. "The government's delay in fixing a minimum and maximum wage and proceeding to a wage restructuration on the excuse of lack of resources is another proof of its inability to face interest groups in the public administration," the left-leaning Popular Coalition said in a statement.
A few days after the Al-Masry Al-Youm interview, El-Beblawi said that the minimum wage will be presented to Egypt's Cabinet on Wednesday.
In parallel, the Egyptian media has reported that the government will fix a minimum wage between LE800 and LE1000.
El-Beblawi announced that these propositions will be discussed and are not final decisions.
Fixing a minimum and a maximum wage in Egypt is a popular demand. In 2009, a court ruled that the government must set a minimum wage compatible with costs of living after the Egyptian Centre for Economic and Social Rights (ECESR), an NGO, filed a case with the Administrative Court demanding a minimum wage be set at LE1200.
Since then and even before, fixing a minimum wage is a main demand of the rising labour movement. It is considered to be one of the main ways to achieve social justice, a main goal of Egypt’s January 25 revolution.
Following the 2011 revolution, Egyptian workers have been promised a living wage on different occasions. Yet, many deadlines were not respected.
In July 2012, a minimum wage of LE700 ($100) was set in the public sector for the first time since the eighties. However, all the workers who receive at least LE700 on paper have deductions made for pensions, insurance and tax making their take-home pay significantly less.
Imposing a minimum wage on the private sector has been met with much resistance by many business groups. They mainly argue that fixing a high minimum wage might raise unemployment, as small businesses will not be able to endure such a burden.
"We need to know first what will be the effect on the development of Upper Egypt and the Delta as well as on employment," declared El-Swedy. "However, a minimum wage of LE800 for technicians and LE1000 for university graduates is reasonable."
According to official figures, 46 percent of Egyptian manpower works in the informal sector, 23 percent in the government, and 4.4 percent in public enterprises.  
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