Egyptian Employees Demand Rise In Minimum Wage

With elections planned later on this year in Egypt, workers have begun to step-up their demands for a rise in the minimum wage.  The 35 Egyptian Pounds per month minimum wage has remained unchanged for the last twenty six years and a large number of average Egyptians believe that something needs to be done as inflation is just about 10%.

Huge groups of protestors recently clashed with police as they demanded a boost to 1,200 Egyptian Pounds each month. At the moment, around 40% of Egyptians are living below the poverty line and the increase in the minimum wage would make a large improvement to a considerable number of families. Nevertheless, it is being claimed that the Egyptian government are considering a rise to 450 Egyptian Pounds a month.

There is little question that a rise in wages will benefit a significant number of men and women and in an election year, such a move would probably help out the government at the polls. On the other hand, there is the small matter of how such a rise would be paid for. Governments do not have a bottomless pit of wealth with which to pay public sector workers and similarly firms can only pay wages out of the profit they produce.

Egypt creates a good deal of its profit from natural resources such as oil, coal and gas as well as tourism. Government should be able to cover the increase in minimum wage for its workforce by way of a mix of tax rises, efficiency savings and job loses. Never the less, they must take note that tax rises don’t always work as in 2005, the rate of corporation tax was cut from 40% to 20% year tax revenues the next year doubled.

A possible area to be hit with increases is the foreign visitor. The fees of visas could be increased to generate increased government money while the private sector could very well have to raise hotel rates at resorts and charges at dining places in order to pay their staff the higher minimum wage.  These charges would almost definitely be passed on to the traveller. The real expense in Red Sea Holidays from the UK is the cost of flights. Hotels and services once in Egypt have always been great value so there is scope for an increase there. However, pressure may be put on airlines to reduce airfares so as not to price getaways to Egypt too far beyond their recent levels.