Businessmen criticise government stance on minimum wage

Daily News Egypt
9 Min Read
Head of the Federation of Industries Mohamed Al-Sewedy said that cabinet has agreed to activate the law of local product preference. (AFP File Photo)
While Egypt’s interim government discusses public demand to set minimum and maximum wages for employees, the plans get under fire by business organizations (AFP File Photo)
While Egypt’s interim government discusses public demand to set minimum and maximum wages for employees, the plans get under fire by business organizations
(AFP File Photo)

By Nohel Munir, Omar Abd al-Hamid

Business organisations criticised the current government’s decision by Hazam El-Beblawi to establish a minimum and maximum wage rate.

They called on the government to link wages with production rates, number of hours worked, geographical circumstances, and standard of living rates in all provinces throughout Egypt, in addition to taking into account the various differences between jobs and professions.

Ahmed Al-Wakil, Chairman of Egypt’s Chamber of Commerce, recently spoke with Beblawi along with the country’s economic ministers, for the purpose of starting a comprehensive societal dialogue about the country’s work policies. Such a dialogue should take place, he said, before laws are discussed regarding the implementation of a minimum wage rate.

Al-Wakil said that it was not appropriate to place additional burdens on companies considering the country’s economic circumstances, especially considering that unemployment is currently one of Egypt’s biggest problems. He added that no ideas should be abandoned when it came to working to decreasing Egypt’s current employment rate.

He stated that in order for the government’s to reach its goal of bringing such rates down to 6% over the next several years, that a total of 900,000 jobs would have to be created annually, a task which would not be easy to implement. Doing so would require large injections of both foreign and local investment, in addition to an organised market and disciplined work ethic.

Al-Wakil added that: “a large swath of Egypt’s work force cannot find a job, while at the same time, business owners in all sectors have been unable to find enough skilled and trained labor. This suggests that Egypt’s market is unorganised and suffers from structural problems. Job listings should be restructured to display all skills and requirements necessary to perform each duty, while accurate databases should be created to monitor employment and the types of skills and knowledge that are currently in demand.”

Pay for such jobs should be comprehensive, he said, with minimum wage rates specified based on the number of hours worked, as opposed to monthly salaries. Such pay rates should include market output mechanisms, standards of living, and market activity.

Unemployment assistance should be conditional on whether or not citizens are able to find appropriate work, and those out of work should be required to take part in a preparatory program to provide them with the skills needed to obtain employment, said Al-Wakil. Studies should be conducted, he added, where unemployed married mothers are given assistance as a percentage of unemployment aid (5% for example) for a period of up to five years, which would free up some job opportunities.

Al-Wakil emphasised the need to again discuss the country’s new insurance law, saying that violators should not be imprisoned but instead forced to pay a fine. He further called for insurance rates to be decreased from 40% to 20%, which will help increase pay rates.

Mohamed Al-Baha, member of the board of directors of the Federation of Egyptian Industries (FEI), and chairman of the Taxes Commission, stated that the government has not conducted proper studies regarding methods of implementing minimum and maximum wage rates.

He added that the government should specify means by which it will implement minimum and maximum wage rates, saying that they should be linked with individual rates of production.

Mohamed Al-Shabrawi, member of the Board of Directors of the FEI, suggested that the government re-direct funds allocated for pay increases for workers, to develop the country’s technical and professional training education sector. Doing so, he said, would help provide the private sector with access to better trained workers.

Developing the sector this way, he said, would improve the performance of workers, raise their production rates and help increase salaries, without needing to implement minimum or maximum wage laws. Prime Minister Beblawi stated during a press conference on Saturday, that the government sought to put in place an EGP800 monthly minimum wage, but that it would postpone the implementation of such a decision to a later date.

Abd Al-Halim Al-Gamal, member of the Al-Nour Party’s Economic Committee, and representative from the Finance Committee of the now dissolved Shura Council, stated that the new constitution should provide enough resources to ensure social justice, to serve as the foundation for comprehensive laws holding the government accountable to applying minimum and maximum wage rates.

Al-Gamal expressed his shock at statements made by the El-Beblawi government, reinforcing the difficulty with which minimum and maximum wage rates would be applied. Before its dissolution, discussions were held within the Shura Council regarding plans to set aside funds from the public budget to put in place minimum and maximum wage rates for all state employees.

The application of maximum wage rates would help provide the budget with additional resources to implement minimum wage rates as well, Al-Gamal added.

Fakhri Al-Feki, Chairman of the Wafd party’s Economics Committee, said the current government had placed itself in a crisis after announcing that it sought to implement minimum and maximum wage laws.

The government should be honest and transparent with the people, Al-Feki added, considering that everyone supports the implementation of minimum wage laws. He further called on Beblawi to retract his statement regarding the difficulty of implementing minimum wage rates during this time.

Al-Feki added that it was not necessary for the constitution to include laws specifying minimum and maximum wage rates, however clauses should be included ensuring that social justice is provided to the Egyptian people.

Shehab Wagihi, spokesman for the Free Egyptians Party, stated that the inclusion of private funds as a part of the state budget would help facilitate the application of minimum and maximum wage rates, considering that millions of pounds often make their way into the hands of individuals not specified to have received them.

Wagihi called for a constitutional article to be created which would implement a minimum but not maximum wage rate, as maximum wage rates differ depending on the institution.

Heba Yasin, spokesman for Al-Tayar Al-Sha’aby (the Popular Current), stated that the government was working to expedite the application of minimum and maximum wage laws, which would help protect all citizens.

She called on those whose salaries exceed EGP150,000 to work to help set minimum wage rates at EGP1,200.

Mohamed Al-Khouli, member of the Al-Tayar Al-Misry Party, stated that the implementation of such laws would require that economic procedures be taken which ensure that private funds are included within the public budget. He called for ministry advisors to be removed, adding that maximum wage rate laws should be implemented by restructuring the country’s tax bracket system.

Al-Khouli also called for the creation of a new ways to for state workers to receive payment electronically, which he said will help facilitate and expedite the implementation of minimum and maximum wage rate laws.

Translated from Al Borsa newspaper

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