Source: German Development Institute
Author(s): Amirah El-Haddad
Original Link: https://www.die-gdi.de/en/the-current-column/article/why-el-sisis-decision-to-raise-egypts-minimum-wage-is-not-such-a-good-one/
Egypt’s President El-Sisi recently announced a 67 percent raise in the minimum wage to 2,000 Egyptian pounds (115.74 US-Dollar) per month from 1,200 (69.27 US-Dollar). He also promised state employees a wage raise of 7 percent plus a one-off 150 Egyptian pounds bonus. Sisi has offered the raises as reward for people’s endurance of austerity caused by reforms implemented in exchange for the International Monetary Fund’s 12 billion US-Dollar loan. Measures such as floating of the currency, sizeable cuts in subsidies and a range of new taxes have contributed to higher prices, hitting the poorest and the middle class the hardest. The wage increase may also be an attempt to ease people’s anger over the expected results of the referendum to allow the president to rule the country for at least 20 years. Whatever the reason, raising the minimum wage is not a good idea. The public sector minimum wage and wage increases will increase inequality not reduce it.
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