Egypt sets LE1200 as minimum wage for government workers

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Egypt sets LE1200 as minimum wage for government workers

Post by DJKeefy » Wed Sep 18, 2013 8:33 pm

Egypt's Cabinet has set the minimum wage for the public sector at LE1200 ($174), as of the beginning of next year, said Prime Minister Hazem El-Beblawi in a televised press conference on Wednesday.

According to official data, the number of employees in the governmental sector increased by two percent in 2012/13 to reach 5.545 million, compared to 5.439 million one year earlier.

In June 2011, the interim government set the minimum wage for the public sector at LE700 ($101.5).

Regarding the private sector, workers and business owners demanded more time to discuss the rate, added Hossam Eissa, deputy to Egypt's Premier.

"Representatives of workers and employers will meet on Sunday to resume talks over the minimum wage, and the Cabinet will meet on Wednesday to make a decision," added Eissa.

Eissa deems one of the easiest tools with which to improve social justice is by raising payments. However, he added that social justice also entails good housing and hospitals where "no one dies."

"Social equality is not only related to increases in pay; social justice is to provide job opportunities for people," Eissa elaborated.

In 2011, private sector workers were promised an ‘emergency allowance’ if their pre-tax salary, not their take-home salary, failed to reach the LE700 minimum.

71 percent of the country's total labour force – 23.4 million Egyptians – work under the umbrella of the private sector.

Egyptian statistics body CAPMAS has stated that a quarter of Egyptians are living in poverty.

CAPMAS defines those living in poverty by per head expenditure that is below LE 3,076 (roughly $446) per year or LE265 (roughly $38.4) per month.

Source: http://english.ahram.org.eg/News/81942.aspx


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Re: Egypt sets LE1200 as minimum wage for government workers

Post by DJKeefy » Wed Sep 18, 2013 8:55 pm

How will they afford to do this?
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Re: Egypt sets LE1200 as minimum wage for government workers

Post by Brian Yare » Wed Sep 18, 2013 10:50 pm

DJKeefy wrote:How will they afford to do this?
Allah will provide ...

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Re: Egypt sets LE1200 as minimum wage for government workers

Post by Bombay » Wed Sep 18, 2013 11:13 pm

Well those of us that have been paying this and more need not worry but perhaps we can hear less of "the overpriced European owned restaurants" at last :!:

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Re: Egypt sets LE1200 as minimum wage for government workers

Post by Chocolate Eclair » Thu Sep 19, 2013 6:21 am

Wonder if they will get off their backsides and work now? A lot of these workers are letting the country down by their lazy attitudes and lack of work turnover.

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Re: Egypt sets LE1200 as minimum wage for government workers

Post by Dusak » Thu Sep 19, 2013 7:00 am

I do not suppose if you are being paid peanuts to put so many hours of work in you do not have much incentive. Having the term used ''places to die'' just about sums it up. I would estimate that about 75% of public sector workers have at least one other job to supplement their low incomes and I would think that few or even none would relinquish these extra modes of income when getting this increased salary thus creating jobs for those with none. The more you give an Egyptian, the more they want. Its inherent within their very fabric. Over priced restaurants? These benefit the owners, not the local economy.
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Re: Egypt sets LE1200 as minimum wage for government workers

Post by A-Four » Thu Sep 19, 2013 8:41 am

Dusak wrote: Over priced restaurants? These benefit the owners, not the local economy.
A very good quote here from Dusak, though he may not realise this.

As I previously wrote in a article on this site, it is easy to show that the civil service in Egypt has remained loyal to its old 'owners', and like many civil services of the third world, they often benefit their owners and rare do they have much benefit to the local economy.

You may also remember that Mubarak, with in months of his fall offered all civil servants a interest free loan of x times their salary over x years. It is easy to see that the wishes of the president, under Mousi was certainly not carried out, this was evident even on a local level, oh the power of the civil service. Instead of giving some of these people a pay rise, I would be asking a few of them to turn out their pockets.


P.S. - Similar things do happen in those so called over priced European owned restaurants, I suppose.

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Re: Egypt sets LE1200 as minimum wage for government workers

Post by DJKeefy » Thu Sep 19, 2013 5:22 pm

So... 5,545,000 (workers) x 1200LE (wage per month) = 6,654,000,000 million LE

So the minimum wages to be paid out for Goverment workers would be 6.54 Billion per Month (some people in higher postions will be on more than 1,200LE)

So I presume that there is going to be a lot of increases (like tax) to pay for the Goverment workers wage increases, so people who dont work for the goverment will suffer more due to no wage increases.
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Re: Egypt sets LE1200 as minimum wage for government workers

Post by LovelyLadyLux » Thu Sep 19, 2013 5:35 pm

One of the criticisms leveled at Gov't workers most anywhere when they ask for wage increases is that MOST Gov't jobs are NOT revenue generating. They keep the wheels turning but they don't actually bring in money so any increase in wages to gov't workers has to come from somewhere which, as Keefy says, is in increased taxes.

My observation of workers in Egypt by way of a comparison to workers here: Here if you show initiative and work hard you're apt to get ahead. You'd be identified as the one for promotion or salary increase.

In Egypt when you're working as part of a group the one who does the extra, who workers harder than the others isn't identified the same way so there really is no incentive to put in the extra cause it is really only going to get you more tired than the others.

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Re: Egypt sets LE1200 as minimum wage for government workers

Post by A-Four » Fri Sep 20, 2013 10:29 pm

DJKeefy wrote:So... 5,545,000 (workers) x 1200LE (wage per month) = 6,654,000,000 million LE

So the minimum wages to be paid out for Goverment workers would be 6.54 Billion per Month (some people in higher postions will be on more than 1,200LE)

So I presume that there is going to be a lot of increases (like tax) to pay for the Goverment workers wage increases, so people who dont work for the goverment will suffer more due to no wage increases.
Oh yes, yes, yes, yes. I bet you never watched Yes Minister, when you was a kid, Keefy.

Thatcher learn't alot from that program,........why do you think that most of the non revenue 'civil servents' are not civil servents at all, but instead are through agents, on short term contracts, and paid a s@@@ wage per month.

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Re: Egypt sets LE1200 as minimum wage for government workers

Post by Bombay » Sat Sep 21, 2013 2:57 am

A-Four wrote:
Dusak wrote: Over priced restaurants? These benefit the owners, not the local economy.
A very good quote here from Dusak, though he may not realise this.

As I previously wrote in a article on this site, it is easy to show that the civil service in Egypt has remained loyal to its old 'owners', and like many civil services of the third world, they often benefit their owners and rare do they have much benefit to the local economy.

You may also remember that Mubarak, with in months of his fall offered all civil servants a interest free loan of x times their salary over x years. It is easy to see that the wishes of the president, under Mousi was certainly not carried out, this was evident even on a local level, oh the power of the civil service. Instead of giving some of these people a pay rise, I would be asking a few of them to turn out their pockets.


P.S. - Similar things do happen in those so called over priced European owned restaurants, I suppose.
Actually we are underpriced but competing against unlicensed restaurants undercutting the genuine prices we should be charging to cover the costs to be legal. Anyone want to run a fully licenced tourist restaurant and see the real costs PM me.

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Re: Egypt sets LE1200 as minimum wage for government workers

Post by Dusak » Sat Sep 21, 2013 9:39 am

Yes Bombay, but there is always an exception to any rule and that is you. :up I did not mention this in the first instance as I didn't want to give the impression of favoritism as you know how some folk are. But when you consider you are nearly the only one left open, it could of been construed that I did mean you. Price of success I suppose. ;)
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Re: Egypt sets LE1200 as minimum wage for government workers

Post by DJKeefy » Sat Sep 21, 2013 10:24 am

Egypt's new minimum wage: Crunching a squeezed budget.

A new minimum wage of LE1200 for public sector and government workers starting January 2014 may put pressure on Egypt's strained finances.

The Egyptian government has said it will raise the minimum monthly wage for all public sector workers to LE1,200 ($171), without specifying how the raise will be implemented or funded.

The decision was announced in a televised press conference on Wednesday evening by Prime Minister Hazem El-Beblawi and Deputy Prime Minister Hossam Eissa. The latter's statements suggest that that the government took the decision hastily.

"We thought that we couldn't wait any more," said Eissa, who also serves as minister of higher education and is not part of the cabinet's economic team. He said that setting a minimum wage “is a sweeping popular demand” that was delayed and that “the people started to say that the government is hesitant."

Eissa said that the government has formed committees to look into the economic consequences of the decision before 1 January 2014, the date when the new minimum wage will come into effect.

"The committees will look into what resources we can get in the short and medium term to avoid negative consequences of this [wage] increase," explained Issa.

Egypt's squeezed state finances leave little room for manoeuvre. The deficit in the 2012/13 fiscal year which ended in June 2013 reached LE240 billion ($34 billion) or 13.8 percent of GDP.

In 2013/14, the government forecasts a deficit of 9.1 percent, a target mainly built on the assumption that economic growth will pick up during the year, leading to a sizeable 43 percent increase in tax revenues. The budget was deemed "too ambitious" even before the announcement of the minimum wage rate.

But the first quarter of 2013/14, which will end on 30 September, is almost over; and Egypt is yet to find closure to its political woes.

Further turmoil and uncertainty would make the interim government's 3.5 percent expected economic growth "very hard to materialise," Mohamed Abu Basha, economist at Cairo based investment bank EFG Hermes told Ahram Online.

If tax revenues do not see the expected rise, a likely scenario according to Abu Basha, the government will have to resort to either increasing borrowing or cutting into other expense items to finance the minimum wage rate.

"They will probably finance this through borrowing; the schemes for saving on fuel subsidies are still unclear," he added.

Governmental plans to cut the energy subsidy bill – amounting some LE120 billion – by at least 20 percent, are still in their early trial phases, making them unlikely to reap fruit in the current fiscal year.

The cost of the implementing the new minimum wage rate will depend whether the government will revisit the whole wage structure of public employees or just bump up the wages of those at the bottom –the former being much more costly.

Any increases in public wages – already comprising nearly a quarter of all government expenses – would further tighten the budget. Wages have grown from LE86 billion in 2009/10 to LE171 billion expected in 2013/14, a whopping 99 percent growth in five years.

Similarly, interest expenses will grow by around 150 percent in the same period; together with wages they will equal more than 50 percent of total government expenses.

The government said it would also impose a maximum wage rate, and lay off a number of highly paid “consultants” in different ministries. This should make some funds available to cover the minimum wage; but will not cover the bulk of the cost.

Raising the salaries of Egypt's six million public employees through borrowing "will not leave any significant room for public investments," said Abu Basha.

In August, the government announced a “stimulus package” that entails pumping LE22.3 billion ($3.2 billion) into investment projects over the coming year to revive Egypt’s battered economy.

The package will be mainly paid for by aid pledged by Gulf Arab states in the wake of the ouster of president Mohamed Morsi on 3 July.

"The aid is just a one-off item; what will we do in 2014/15?" Abu Basha asks.


Fear of inflation

Economists worry that sudden rises in disposable income would put inflationary pressure on the economy given that those who will benefit from the rate have a high marginal tendency to consume, directing all extra income towards consumption.

"Retailers will tend to raise prices on expectations of a higher purchasing ability," Reham El-Dessouky, a Cairo-based economist told Ahram Online. "But we still need more information to determine the how the minimum wage will influence inflation."

Annual urban inflation eased to 9.7 percent by the end of August 2013, driven by a slight appreciation of the Egyptian pound against the dollar.

The pound is now trading at the official rate of LE6.9 to the dollar. A limited black market exists where the exchange rate is slightly higher.

"Public workers are less than quarter of the work force, so we still have to wait to see the private sector's minimum wage," El-Dessouky added.

The government said on Wednesday that representatives of workers and businesses have asked for more time to discuss a minimum wage rate for the private sector –which will come with its own set of complications.

“Maybe they will devise a scheme where the minimum wage would not all be cash but would include benefits,” El-Dessouky said.

Source: http://english.ahram.org.eg/News/82043.aspx
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