Egypt Frames New Plan for Wage Restructuring

New comprehensive reform plans to restructure the wage system in Egypt to be under way within 3 to 5 years, said Minister of Planning and International Cooperation Ashraf Al-Araby.

The reform plans currently prepared by the Planning Ministry aim to restructure the wage system as well as fix a minimum and maximum wage.

Moreover, the minister stated that the restructuring of wages in Egypt is witnessing sheer imbalances that badly needed to be redressed as an essential preliminary to achieving social justice in the North African country.

Al-Araby also said his ministry will announce soon what has been reached so far with Ministry of Manpower as regards to the minimum wage for private-sector employees.

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 EGP 1200.

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 EGP 700 (around $100) was set in the public sector for the first time since the eighties. However, all the workers who receive at least EGP 700 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.