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Posts Tagged ‘egypt’

With elections scheduled later on this year in Egypt, workers have started to step-up their demands for a boost in the minimum wage.  The thirty-five Egyptian Pounds per month minimum wage has stayed unchanged going back twenty six years and lots of ordinary Egyptians believe something needs to be done as inflation is just about 10%.

 

Large groups of protestors in recent times clashed with police as they demanded a rise to 1,200 Egyptian Pounds each month. Presently, close to 40% of Egyptians live life below the poverty line and the rise in the minimum wage would make an immense impact to a substantial number of families. Nonetheless, it is being suggested that the Egyptian government are considering an increase to 450 Egyptian Pounds per month.

 

There is little question that an increase in wages will assist a large number of men and women and in an election year, such a move would clearly help out the government at the polls. On the other hand, there is the tiny matter of how such an increase would be paid for. Governments do not have a bottomless pit of funding with which to pay public sector workers and at the same time businesses and organizations can only pay wages out of the money they produce.

 

Egypt creates an awful lot of its wealth from natural resources such as oil, coal and gas together with tourism. Government may be able to pay extra for the rise in minimum wage for its personnel through a combination of tax increases, efficiency savings and redundancies. Even so, they may want to take into consideration that tax increases don’t always work as in 2005, the rate of corporation tax was cut from 40% to 20% year tax revenues the subsequent year doubled.

 

A likely area to be hit with increases is the foreign visitor. The fees of visas could be increased to deliver increased government income while the private sector may likely have to raise room rates at resorts and prices at restaurants in order to pay their staff the bigger minimum wage.  These expenses would almost certainly be passed on to the tourist. The real expense in Red Sea Holidays from the UK is the cost of flights. Hotels and services once in Egypt have always been superb value so there is scope for an increase there. However, pressure may be put on airlines to lower airfares so as not to price breaks to Egypt too far above their existing levels.

Technorati Tags: egypt, government, minimum wage, politics