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Egypt: Lack of a Living Wage Called for Desperate Measures
Blog Critics
Birgit Nazarian

February 3, 2011
View the Original Article

Could you live off a basic monthly minimum wage of $6.35? (I had to check a couple of sources to verify there wasn’t a typo) No joke. That’s what the minimum wage is in Egypt and has been since 1984. Rioting in the streets in Egypt today did not suddenly emerge as an idea tossed around the social networking sites. It’s been simmering for decades.

Imagine if nearly one third of our children in the United States were malnourished because most of us could not afford to feed them. Surely we’d be out demonstrating in the streets too, and we’d probably take help from anywhere we could find it. The average Egyptian worker makes around $55 a month. Yes, a month. It’s a figure, though much larger than the $6.35 minimum wage, still hard to imagine stretching far enough to cover just the food needs of a family of four. And over the past couple of years food prices there have soared, forcing many families to cut back on meals.

Egypt’s government subsidizes some staples, like wheat; but lamentably the poorest of the poor, who really need that help, are least likely to benefit from it. A robust black market skims off large portions of subsidized goods crippling the system and creating more resentment and distrust towards the government.

In the United States, though the economic times have been rough for us, our experiences pale in comparison to the struggles that have been felt in North Africa for decades and most recently have erupted into full-blown popular revolutions. Egypt’s recent economic prospects have shown growth, yet its poverty rate is still as high as 40%—by some accounts, even higher. For comparison, our own poverty rate, according to the U.S. Census Bureau, is 14.3%, based on a family of four living on less than $22,050.

Going back to that dismal minimum wage in Egypt, obviously $6.35 is laughably short of what anyone would need to pay for the basics of life, food, clothing and shelter. If the average blue collar family in Egypt makes between $50 and $100 a month even with two adults working, they still are below the World Bank’s poverty line. Over the past years, trade unions in Egypt have been urging the government to raise the minimum wage to $222 a month, or 1,200 Egyptian pounds. Business associations are asking for the minimum wage to go no higher than 400 Egyptian pounds, or $74. The discrepancy between labor and management demands is not surprising. But with an increased minimum wage the hope is there will be an eventual “trickle up,” with wages rising up the ladder, eventually improving the lives of everyone.

In many countries where poverty is rife and education is lacking, particularly in the Middle East and North Africa, the door is open for radical groups who offer social services to the desperate poor to gain footing. This is a concern not without merit. We’ve seen it happen before. Shoring up social safety nets, improving education and opportunities is Good Government 101. In the case of Egypt, a strategically important ally to the U.S. and second biggest recipient of U.S. aid, you could say we have a vested interest in how the uprising turns out.