CAIRO: Egypt’s decision to raise the minimum wage for the first time since 1984 has been sharply opposed by the very activists who demanded it, because at LE 400 ($69) a month, it skirts close to the poverty line.
After a long battle, the National Council for Wages was ordered by a court in October to review the minimum wage, set in 1984 at LE 35 — roughly the price of a fast food meal in 2010.
But the new wage is considered a pittance as inflation and prices have soared in the country of 80-million people.
"It is impossible to live on it," said Shaima Mohammed, a Cairo mother who puts her family’s monthly expenses at more than LE 1,500.
Homes across the country are feeling the strain as annual inflation hit 12 percent in October. Price increases for staples such as meat and tomatoes have aggravated discontent in the country.
"How can you have a minimum wage equivalent to the price of six kilograms (13 pounds) of meat? It’s nonsense," said Egyptian economist Ahmed El-Naggar.
Others point out that $69 roughly amounts to $2 a day, the poverty line on which about 40 percent of the population survives.
"The fact that the National Council for Wages has ignored the poverty line leads us to question the criteria used to determine wages," said Khaled Ali, with the Egyptian Center for Economic and Social Rights.
Khair Abdel Rahman, a workers’ representative on the council, says the minimum should be LE 500 for unskilled workers, LE 750 for semi-skilled and LE 1,000 for skilled labor.
But the government says increasing the wage would affect inflation, despite an annual growth rate of six percent. That is disputed by some economists, who say inflation has been rising anyway.
Cheap wages and an attractive fiscal policy have helped lure foreign investment, a key to the government’s economic reform plans started last decade. Chinese manufacturers too are setting up shop in Egypt.
Those reforms have enriched some but their effects have yet to trickle down and are thus viewed suspiciously by many Egyptians.
With a parliamentary election due on November 28, President Hosni Mubarak has conceded that not all Egyptians have felt the benefits of his government’s reforms.
"There are poor people who suffer the hardships of life and people with limited resources suffering from rising prices and expenditure," he said at a party conference this month to launch the election program.
"We propose our program for the next five years for their sake," he said.
Meanwhile trade unions and activists have said they will petition court for a revision of the minimum wage.
