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Sunday, 31 March 2019

El Sisi unveils public sector wage, pension increases

The minimum wage is going up for state employees — but apparently not for the private sector. The public sector minimum wage will rise 66% to EGP 2k per month from the current EGP 1,200 per month on 1 July, President Abdel Fattah El Sisi announced during a 36-minute speech during an event yesterday honoring women (skip to 18:43 for his remarks on the minimum wage). The new minimum wage covers all public sector employees regardless of whether they’re subject to the Civil Service Act. “This was supposed to come out on 30 June, but I said this matter cannot wait,” El Sisi said.

The private sector appears not to be included in the new minimum wage. Reuters notes in a story that the move applies to “all workers,” but our take on the speech is that it covers state employees. Dissent welcome.

Either way, the private sector should be required to follow suit. As we’ve said before, EGP 1,200 is not a liveable wage — and we put our money where our (admittedly very big) mouths are on that one. Our take is that the National Council on Wages has the power to legislate that — any lawyerly types out there want to agree or disagree with us on this?

This puts us in the rare situation of agreeing with the Egyptian Federation of Trade Unions, which is urging private employers to follow suit with the wage rise.

El Sisi also outlined civil service wage hikes for the upcoming fiscal year: Bureaucrats covered by the Civil Service Act will receive a 7% raise in FY2019-20, while state employees working in state organizations not governed by the act will get a 10% bump, El Sisi added. The minimum raise increment will be EGP 75 this year, higher than last year’s EGP 65 minimum. All public sector employees will be eligible for a one-time EGP 150 bonus.

The wage hike will add EGP 30.5 bn to the state’s annual salary budget,according to a Finance Ministry statement (pdf). Higher paid government employees, whose wages already exceed the minimum, will also see their wage floors increase at a lower scale, but on a par with the lowest paying jobs. The two next jobs in line, for instance, will see their paychecks rise to EGP 2,150 and EGP 2200 — up from EGP 1850 and 1870, respectively.

Pensioners will also receive a boost at a cost of EGP 28 bn to the state: Pensions are due to rise by 15% from 1 July, taking the minimum monthly payout to EGP 900. The ministry projects that this will cost the government an extra EGP 28.5 bn per year.

The news is getting pickup in the international press, with Reuters, the Associated Press and Fox News picking up the story.

El Sisi also promised his administration would provide better vocational training and more incentives for women to join the labor force through amendments to the Public Service Act. The president also promised to tighten legislation against gendered violence and harassment; to come up with a bill designed to help indebted women; and to study the legal framework governing women’s marital rights. Al Masry Al Youm has a word-for-word excerpt from El Sisi’s speech.

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