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Labor activists denounce LE700 minimum wage

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Labor activists denounce LE700 minimum wage

Egypt’s Finance Minister Samir Radwan announced last week that the new monthly minimum wage will increase to LE700, up from less than a hundred, and gradually increase to 1200LE over the next five years.  But workers and labor activists still have serious concerns that the increases will take effect and say that they see no change from the policies of the previous regime.

Radwan’s announcement did not make it clear whether this wage applies only to government employees or workers in other public sectors.

“Anything less than LE1200 per month is a deception and an insult to the dignity of Egyptian workers,” said Nagi Rashad, labor activist and worker at the South Cairo flour mills.

For the last five years, workers have demanded an increase in the minimum wage to LE1200. But the finance ministry’s decision to phase in the higher minimum wage over five years means that the value of LE1200 will have eroded by the time it is implemented, due to high inflation rates.

“In five years LE1200 will be no good for anything,” said Rashad. “It’s a joke.”

Urban consumer-driven inflation in Egypt is currently hovers around 12 percent, largely led by rising food prices. At that rate, a LE1200 wage will have the equivalent purchasing power of LE480 in five years.

Kamal Abu Eitta, the president of the Independent Union of Real Estate Tax Collectors, Egypt’s first independent union, agrees with Rashad. While he says that he understands Egypt’s tough fiscal situation, he does not believe that LE1200 will constitute an acceptable wage in five years time.

A 2010 study by Ahmed al-Naggar, an economist at the Ahram Center for Political and Strategic Studies, found that Egyptians need a monthly minimum wage of LE1200 in order to survive.

An administrative court ruling the same year supported that number, but the government largely ignored the verdict.

“The new government is making a media stunt just like the old regime to examine the street reaction,” said Saber Barakat, a leader of a pro-worker coordination committee at the Delta Steel Company.

“All I want is to live a decent life without having to beg people for money,” he said.

Barakat also criticized Radwan for not revealing the standards and mechanisms upon which the decision was made. “The government is underestimating our intelligence,” he said.

Labor activists say that a new minimum wage that falls short of the LE1200 benchmark will force workers to look to informal sources of income to make ends meet.

For his part, Barakat said that in order to ensure social justice, the minimum wage has to be accompanied by a maximum wage limit at a ratio of one to 15.

“The ministers won’t do a maximum wage limit because they know they can’t give up their inflated pay checks,” said Barakat. “Only then will they recognize that we are living like animals.”

But other activists say that there are other problems with the government’s announced LE700 minimum wage.

Khaled Ali, a lawyer at the Egyptian Center for Economic and Social Rights, points out that there is a difference between base salary and whole income, which includes the additional incentives and bonuses added.

“The minimum wage announced by the government is a hoax because it doesn’t specify if this is the total wage or the base one,” said Ali.

Ali added that currently, the base salary is 25 percent of the whole income. Workers demand it increases to 80 percent.

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