Egypt’s Minister of Manpower Ahmed El-Boraei has fended off protests from the business community over government plans to update the country’s minimum wage, saying there is enormous popular pressure for the move.
The government’s minimum wage proposals are under attack by leading business figures, including Gamal Bayoumi, head of the Arab Investors Union, who claimed it is wrong to hike wages in a time of crisis.
Bayoumi, who dubbed the minimum monthly wage figure of US$200 being floated in the media as “a joke”, cited the case of post-war Germany, which froze wages and increased working hours as it rebuilt its economy.
But, speaking at an economics workshop in Cairo on Tuesday, Ahmed El-Boraei said a minimum wage was not just a worker’s right but a human right.
He stressed that the 25 of January revolution called for social justice and warned that no one can handle the protests that will erupt if new minimum wage is not set.
Many economists have argued that a hike in wages will further widen an already negative balance sheet for the indebted government, and could stir inflation that will eat up any salary increase, thus limiting the chances of recovering from an existing economic slowdown in Egypt.
Bread and oil subsidies represent a large chunk of the government’s budget.
Egypt’s economy has been hit hard by a sharp drop in tourism revenues since the start of the revolution.
Sit-ins and protests over the issue of wages have also slowed down production in the nation of 85 million people.
The caretaker Cabinet of Premier Essam Sharaf has issued a law that criminalises acts that derail production, while acknowledging the right of a peaceful freedom of expression in the new Egypt.
Premier Sharaf has however promised a gradual increase in wages starting from the new fiscal year in July.
Egypt has been promised tens of billions of US dollars in support of its economy by the International Monetary Fund and the World Bank through G8 countries, and is also to receive significant support from its oil rich Arab neighbors.