Nov 5, 2010

Egypt & Minimum Wages

As part of the very tribalist activity of sol7 for the lawsuit against us by the Heliopolis local council, I got to spend 3 hours talking with a manager in the Cairo Beautification Office. The conversation took its own course and we managed to tackle one of the three taboo topics, politics. We discussed for a good 45 minutes the upcoming parliamentary elections, the candidates in our riding and most importantly the proposals for setting a minimum wage in Egypt.

As a government employee, I thought he would agree with me, that having a L.E. 400 (US $70) a month salary as a minimum wage was too low. I was shocked at his strong discontent with my argument, he opened my eyes that in the public sector, 400L.E. a month really doesn't mean 400L.E. a month. There are so many addons and benefits to this salary that even after taxes an employee would net 4 times his base salary. This of course doesn't apply to the private sector.

All of this raises the question of why are there two different pay systems in Egypt, wouldn't make more sense to streamline and benchmark the pay in Egypt so we can get a better understanding of our payroll and income levels? Shouldn't Egypt cancel all the addons and just have an actual minimum wage that reflects the actual pay structures? Or is having a minimum wage going to further raise the inflation?