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Experts say wages must be controlled

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While the setting of a minimum and maximum wage was seen as one of the ways to achieve social justice, they have yet to be applied.

By Lamia Nabil 

Two years after the Revolution, Egyptian workers have yet to see the dream encompassed in the slogan “bread, freedom and social justice” come true. While the setting of a minimum and maximum wage was seen as one of the ways to achieve social justice, they have yet to be applied.

“The revolution called for social justice so the government’s first concern should be hiring the unemployed and increasing wages. There is no way to fight corruption without improving wages,” said financial expert Osama Murad.

Murad opposes the maximum wage in absolute terms, believing that it would affect the productivity and efficiency of the government sector in turn decreasing the capability of hiring upper-level managers. The best way to control wages, according to Murad, is transparency; to simply announce the salaries of executives in governmental positions in an annual report.

He continued saying to make sure that every executive is responsible for the success or failure his organization, it’s important to evaluate every position with productivity and efficiency. The maximum wage should not only include salaries, but also the privileges the position receives. Anyone in public service should be transparent about their income.

Dr. Mohsen Ahmed El-Khodery, an economic expert, believes a minimum wage should take inflation into account, because it should cover employees’ basic needs like food, housing, clothing, education and health. El-Khodery also stressed the importance of increasing productivity, otherwise additional income will represent a purchasing power that is unmet by equal production, thereby leading to inflation.

“Employees will have lost the value of their additional income, bringing them back to square one,” said El-Khodery. One way to boost productivity, he said, is to increase government spending to improve health and educational services.

Minister of Manpower and Immigration Khaled Al-Azhari said: “The government intends to reconsider applying the minimum wage law and linking it to a maximum wage, allowing a gradual increase to achieve a decent life, with controls for applying the maximum wage and linking it with production.”

Data from the Global Wage Report for 2010 and 2011 showed that in Egypt, around 30% of workers are low-paid. Minimum wage is a way to provide these workers with a better living standard.

Article 23 of the 1971 Constitution stipulates that “the national economy shall be organised in accordance with a comprehensive development plan which ensures raising the national income, fair distribution, raising the standard of living, solving the problem of unemployment, increasing work opportunities, connecting wages with production, fixing a minimum and maximum limit for wages in a manner that guarantees lessening the disparities between incomes.”

The general budget amounted to EGP 559bn for the 2011-2012 fiscal year, including EGP 25bn towards fixed wages of state employees, and EGP 92bn towards variable wages including bonuses and incentives.

Many experts believe wage limits could eliminate financial and administrative corruption in the government. Moreover, it could also save the government needed resources, which could be used to finance minimum wages.

On the other hand, opponents believe imposing maximum wages would cause qualified personnel to leave the public sector, lowering performance standards compared to the private sector.


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