Parliament discusses wages draft law

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By Mennatallah Fouad Youssef

CAIRO: Parliament members continued discussions of the proposed law concerning implementing a minimum and maximum wage amid continuous labor sit-ins and protests in different sectors.

The proposed law presented by the planning and general budget committee would cap the maximum wage at 35 times that of the minimum wage, and thus not exceeding LE 50,000 per month. Exceptions are to be considered as seen fit.

As discussions continued in Wednesday’s parliamentary session, several MPs were against the proposed set amount of LE 50,000.

“Why should the maximum wage be 35 times as high as the minimum wage, while developed countries such as France are set at 10 times more to minimum wages and countries such as the US are at 15 times more,” said Hamdy Fakhrany, during the session. “We propose a 20 times gap only.”

However, MP Saad El-Husseiny finds a slow change in wages would be a more reasonable approach.

“The proposed LE 50,000 is a reasonable amount because we should be taking these changes in steps, sudden changes in the wages might cause harm to the Egyptian economy,” he told Daily News Egypt, adding that some employees of the public sector and civil service receive high wages because of their exceptional and rare skills.

“We have set regulations to ensure that people will receive suitable wages, exceptions to the maximum wage ceiling will only be given to employees in rare professions that are a benefit to the country and in regulation with international standards. The Cabinet must agree to these increases and the whole process will be regulated by the parliament,” said El-Husseiny.

“The law will be implemented in all sectors and is expected to save the government between LE 5 billion to LE 10 billion,” he added.

However economists are worried about further damages such a law would cause the economy.

“While cutting maximum wage is a reasonable approach to take, and will save funds to the government, increasing minimum wages should be done according to the productivity and state of each sector,” said Magda Kandil, executive director of the Egyptian Center for Economic Studies.

“Not all industries should increase minimum wages to counter the increased costs of living, because that would only create problems such as inflation, unemployment and eventually heavier costs of living because the level productivity of the employee does not match. Rather the government should increase social services to help that employee have a better living standard.”

“The government should direct employees to sectors where there is not enough labor and shuffle industries that are over-employed. Also the less developed sectors should be invested in making sure that the productivity levels match with wages,” she added.

Kandil stated that there should be transparency and clearly defined targets as to how much would the law to cut maximum wages save, and to tie both minimum and maximum wages together.




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