A public debate over whether LE400 makes a reasonable minimum wage has just begun, Niveen Wahish reports The government is having a hard time convincing the public and stakeholders that an LE400 minimum wage is fair enough. Salma Abdel-Aziz, a 38-year-old accountant in Aswan has been working full time for 10 years at a private accountancy firm. She started off with a LE100 salary. Today she is paid LE200. She was more than happy to hear the National Council for Wages had decided the minimum wage would be set at LE400. But Abdel-Aziz's feelings are shared neither by the trade unions nor by the general public, who find that with escalating prices, LE400 can hardly provide for a decent living. The council's decision was made following an Administrative Court ruling that the government should end tensions over the minimum wage by modifying it. The court, however, did not specify a sum. The lawsuit had originally been filed by the Egyptian Centre for Social and Economic Rights, requesting the minimum wage be set at LE1,200. To put public anxiety to rest, the government has tried to explain that had the previous minimum wage of LE35 been subject to regular increases taking inflation rates into account, the minimum would have now reached around LE280. The government has added that the LE400 would only apply to entry- level workers with no prior experience or training, and that the wage will be reviewed every three years. "If the minimum wage was set any higher, it could discourage businesses from hiring or lead them to hire in a clandestine fashion," Explained Minister of Finance Youssef Boutros Ghali on television. He added that if the starting salary is LE400, that will mean that all the other salaries will increase as well thus putting pressure on the business owner. "If production does not match the extra cost, the business owner will just raise his prices," he said. Head of the Central Agency for Organisation and Administration Safwat El-Nahhas also stated on television that the criterion on which the LE400 figure was calculated was that it is above the LE164 per month level, whose earners live on the poverty line, but less than half the average income that ranges around LE1,200. The government's argument in adopting the LE400 figure is that a higher minimum wage would trigger inflation and cause prices to rise. Dentist Ahmed Hassan told Al-Ahram Weekly that "any rise in salaries or pension contributions will mean a fatter bill to be paid by my patients." But the LE400 level falls below not only the LE1,200 that the public is calling for, but also below the minimum wage recommended by a Information and Decision Support Centre (IDSC) study. The IDSC's recommended minimum wage was LE656. Economist Samir Radwan, who oversaw the study, explained that LE656 takes into consideration that there is one bread earner for every four individuals, and as such it multiplies the LE164 poverty line barrier by four. As for the public debate on the issue, Radwan said labour movements confuse minimum wage with wage levels. He added that while no one should be paid less than the amount set by the minimum wage, wage levels depend on each individual's education, experience and skills. Labour unions had expressed their dissatisfaction at a meeting held earlier this week with the minister of economic development and the minister of manpower and labour. They decided that further discussion on the issue is necessary, but that the private sector needs to be involved. "LE400 is unacceptable," head of the Railway Workers' Syndicate Ramadan El-Guindi said after attending the meeting. "What will LE13.5 per day buy at a time when tomatoes have reached LE10 per kilo?" El-Guindi also lamented the council's announcement that the figure includes bonuses, and therefore constitutes the final take-home sum for each person on the minimum wage. "If that is the case then it should be at least LE600," he added. Although some say the council's decision should apply to both the private and public sectors, the government said this cannot be the case because each sector is subject to a different law. And it said that, at any rate, LE400 is below what the worst paid employees in the government are receiving today. Before the council's decision was made, the minimum wage had, since 1984, stood at LE35 per month. In reality, no one in the public sector is given less than LE400 a month after bonuses and other remunerations are paid. But Radwan finds this system distorted and in need of reform. A salary should increase annually, he said, taking into account inflation rates and performance. "Right now, everyone is entitled to bonuses," he said, adding that wage policies must take into account both prices and productivity. Farag Amer, head of the Borg Al-Arab Investor's Association and chairman of Faragallah Group, says the private sector is ready to pay its employees more so long as better wages are matched by productivity. Amer added that factory salaries already exceed LE600. "Factories are paying experienced, skilled labour very well, often four or five- digit sum," he said. Nonetheless, Amer believes that it is up to supply and demand to decide the minimum wage, and the figure set by the council should only serve as guidance. He says there is a shortage of skilled labour, which he puts at 30 per cent in Borg Al-Arab Industrial City west of Alexandria. According to El-Guindi, that shortage is the result of workers not seeing private sector salaries as commensurate with their working hours and effort. He pointed out that some workers quit their LE600 job to drive a scooter rickshaw, or tok tok, only to receive the same income. In order to reconcile differences in opinion, Radwan stressed that stakeholders including the private sector, the government and workers' representatives must sit together to take a joint decision. "It is in everybody's interest that the private sector listens to what the workers have to say if they want to avoid the strikes Egyptian workers have become fond of in the past year," Radwan said. He explained that workers in Egypt resort to strikes because they are finding it difficult to secure their rights any other way. In the meantime, accountant Abdel-Aziz is hoping the minimum wage is not something she will only read about in the newspapers. She wants to see the debate through and the minimum wage not only set in practice, but also strictly supervised, in order to be able to reap the benefits.
