Egypt Independent

Businessmen organizations frown upon minimum wage decision

Businessmen organizations said that the decision to implement the minimum wage came as a surprise and that the current economic conditions do not allow its implementation in the private sector.
Meanwhile, sources said the cabinet has thrown the ball into the businessmen organizations court to agree on a minimum wage for the private sector.
An official source from the Federation of Egyptian Chambers of Commerce said that salaries in the private sector should be tied to productivity, while in the public sector there is considerable reliance on fees imposed for the provision of services.
The source also said that imposing a minimum wage on the private sector without tying it to productivity will be difficult and dangerous in light of the poor condition of the government budget and the huge deficit it has suffered over the past three years.
A detailed memo on minimum wage and salaries and related legislative amendments to laws was submitted to the government, the source said. Concerned parties also held a preliminary dialogue with Prime Minister Hazem al-Beblawy in this regard.
Mohamed al-Sewedy, the head of the Egyptian Federation of industries, said the private sector is different from the government and the implementation of a minimum wage that does not take into account the conditions of companies and might have negative impacts on fresh hiring and the creation of new jobs, which will eventually raise unemployment.
A minimum wage for the private sector has several dimensions, he said, adding that businessmen and labor organizations will meet again on Sunday to examine the situation before meeting with government officials.
Nagy Erian, deputy head of the Egyptian Tourism Federation, said he is not opposed to the implementation of a minimum wage, but added that the current conditions of the industry are not suitable, given the low occupancy rates and the catastrophically low tourist activity.
The federation will hold meetings next week to discuss the issue.
The tourism sector is unable to pay the salaries of the workers, he said, adding that he does not mind the implementation of such a decision as soon as tourist activity returns to the pre-January 2011 levels.
A meeting will be held with the Tourism Minister following his return from Moscow, he added.
Yehia Mashaly, the head of the Chemical industries Holding Company, said no official documents were received regarding the minimum wage decision so far, adding that there is a need for transparency on how the decision will be implemented.
Mashaly criticized the announcement of the decision months before its implementation, saying this will raise the prices of commodities on the market and the rate of inflation.
Edited translation from Al-Masry Al-Youm