The end of January was the date when almost five million employees of the state administrative apparatus, or civil servants, were due to receive new salaries calculated according to the new minimum wage of LE1,200 a month. A Ministry of Finance (MOF) report in mid-January said that 4.83 million workers would benefit from the application of the new law, approved in September 2013, including about 1.5 million teachers and 46,400 medical personnel. However, not all those eligible for the raise have apparently received it, notably teachers at Al-Azhar University in Cairo and some employees at other universities. These institutions had apparently not received the necessary documentation from the MOF explaining the details of the new wage rates. The administrative departments in these government institutions preferred not to apply the law without a clearer idea of the regulations. Some officials in state bodies that had received the MOF memos complained about their ambiguity. As a result, many workers were left disappointed even after the official application of the new law. Gebally Al-Maraghi, head of the Egyptian Trade Union Federation, told Al-Ahram Weekly that workers had been disappointed to discover that the figure of LE1,200 was the gross income, including base salary, bonuses and other allowances. “As a result, the money taken home by a worker at the end of each month has not changed, and may even have got less, because of tax and insurance deductions,” Al-Maraghi said. He said that what workers wanted was a set minimum level for base salaries and not for gross income. The problem escalated last week when another half million workers in public-sector companies found that they had been excluded from the new minimum rate. Their reaction differed from one company to another. At Bay Al-Masnoaat, a trading company in the public sector that is one of the state-owned companies slated for privatisation according to a law from the early nineties, workers sent a petition to the MOF demanding that minimum wages in their company should be the same as those in the government administrative apparatus. Workers in some textiles companies went on strike last week, demanding equality with state employees receiving the minimum wage. Adel Beshai, a professor of economics at the American University in Cairo (AUC), told the Weekly that the complaints were “natural” and that they were a result of the hasty introduction of the law. “The problem is that sensitive decisions should be studied more carefully before they are implemented,” he said. “The government raised people's expectations, but then did not fulfill them.” Al-Maraghi said that while representatives of the federation had tried to convince workers to end their strike, their demand for a minimum wage was a legitimate one. “The workers will wait if the government's policies are clear and if they see a plan to solve their problems and improve their standard of living,” he said. In response to the strikes and complaints from the different governorates, a technical committee has been formed of experts from the ministries of investment, finance and planning and the holding companies concerned to look into the problems that have emerged. The committee is expected to present its report to the cabinet soon. Officials said that the government was considering the application of the LE1,200 minimum wage in the public enterprise sector. This includes 147 companies that are affiliates to nine holding companies with 500,000 workers. They are excluded from the present minimum wage law because they are governed by a special law, law 203 of 1991 that governs public enterprises. The Minister of Finance Ahmed Galal said that the decision to apply the minimum wage rate to these companies had been left to the management of the companies concerned, depending on their financial positions. The latter vary, something that is reflected in differences in workers' salaries. Average salaries in affiliates of the Holding Company for Construction exceed the LE1,200 level, but in other companies average salaries can be as low as LE270. The Minister of Investment Osama Saleh said that workers in some companies were suffering from low incomes and that a request had been made for them to be included in the minimum wage scheme. Expressing his concern about the present repercussions of the new law, Beshai said that the interim government seemed to be out of touch with the public and was unable to understand its demands. Beshai warned that salaries were a complex issue that, if not resolved, could even lead to another revolution. He added that Samir Radwan, the former minister of finance, had put forward better plans for resolving the issue over a number of years, but unfortunately these had been shelved. Meanwhile, the National Council for Wages is expected to meet this week to handle the application of the minimum wage law in the private sector as well as in the state holding companies. According to the ministry of finance, the implementation of the law will cost the government LE10 billion a year. Interim prime minister Hazem Al-Beblawi has also said that a maximum wage of LE42,000 will be introduced for all civil servants, as well as for employees of state administrative services and general authorities. Al-Maraghi said that the application of the maximum wage rate in all state bodies would help the government to reduce the cost of increasing the minimum wage rate for all employees.
