{"id":607700,"date":"2023-10-08T00:00:00","date_gmt":"2023-10-08T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/inside_industry\/a-deeper-dive-into-the-private-sector-minimum-wage\/"},"modified":"2023-10-08T00:00:00","modified_gmt":"2023-10-08T00:00:00","slug":"a-deeper-dive-into-the-private-sector-minimum-wage","status":"publish","type":"inside_industry","link":"https:\/\/enterpriseam.com\/egypt\/inside_industry\/a-deeper-dive-into-the-private-sector-minimum-wage\/","title":{"rendered":"A deeper dive into the private sector minimum wage"},"content":{"rendered":"

What does the newly-implemented private sector minimum wage <\/strong> requirement mean? <\/strong>The National Council for Wages hiked private sector minimum wages by 11% in July<\/a> in a bid to move closer to minimum wage parity between the private and public sectors. The move \u2014 which marked the second time private sector wages were increased since the beginning of 2023 \u2014 compels private sector firms to pay their employees at least EGP 3k a month, up from EGP 2.7k. Broadly speaking, the private sector was prepared for these wage hikes, and lauded the move to enforce baseline salaries across industries, according to sources Enterprise spoke with. <\/p>\n

It\u2019s all very fresh \u2014 and didn\u2019t come easy: <\/strong> The private sector minimum wage is relatively new in Egypt, having been introduced at the beginning of FY 2021-22<\/a> at EGP 2.4k a month.Private sector companies were initially resistant<\/a> to the new minimum wage requirements, with thousands of companies filing for exemption. Companies claimed that high employment counts, increased production costs, and the pandemic have left them unable to pay for the additional labor costs.<\/p>\n

Another private sector minimum wage hike incoming? <\/strong>The Supreme Council for Wages will meet before the end of the year to look into potentially hiking the private sector minimum wage in response to recent hikes to the public-sector minimum wage, council member Magdy Badawy told Enterprise. <\/p>\n

But nothing is certain: <\/strong> Whether or not the council moves forward with another hike would largely depend on the various sectors\u2019 ability to afford the additional expenses associated with a higher minimum wage requirement, Badawy said. Currently, not all private sector companies are on equal footing when it comes to salary ranges, Badawy said, noting that there are some who pay out salaries exceeding the minimum wage, some who pay out the minimum wage, and others who are struggling to keep up. <\/p>\n

REMEMBER- <\/strong>The public sector minimum wage was just hiked for the third time in 12 months to a monthly EGP 4k from EGP 3.5k, following President Abdel Fattah El Sisi\u2019s directives<\/a> last month. The public sector minimum wage has climbed almost 50% since July 2022<\/a>, before which it was set at EGP 2.4k a month. The level was then raised again in October<\/a> and April<\/a>.<\/p>\n

Salary increases need to match inflation levels: <\/strong>\u201cThere was a lack of balance between the salaries being paid out and inflation levels prior to the implication of the private sector minimum wage,\u201d Federation of Egyptian Industries\u2019 (FEI) Mohamed El Bahy told us. <\/p>\n

And although it may entail more spending for companies, minimum wages are good for <\/strong> the bigger picture: <\/strong>Hiking the minimum wage also helps increase spending which plays a key role in reviving the economy, El Bahy said. \u201cEvery wage hike ends up echoing in the local market, with people\u2019s spending.\u201d <\/p>\n

The industrial sector is ahead of the game: <\/strong>\u201cEmployees in the industrial sector make double or triple the private sector minimum wage on average.\u201d El Bahy said, adding that the sector prioritizes its workers and their comfort. The main component for industry is labor \u2014 so the workers\u2019 happiness and satisfaction plays a huge role in the production process, he added. Employers prioritize worker satisfaction and that\u2019s why the industry already enacts regular salary increases, especially for trained workers. <\/p>\n

Industry also offers various forms of support: <\/strong>The industrial sector, on top of offering competitive salaries, also offers workers other benefits like transport cost and health ins.<\/p>\n

Not all sectors are equal: <\/strong>\u201cSome sectors, like the service sector, depend on customer tips to fulfill their employees\u2019 wages,\u201d El Bahy told us. <\/p>\n

Exceptions are necessary: <\/strong>In some cases, the number of employees is more important than how much each individual employee is getting paid, El Bahy argued. In Upper Egypt for example, a single family can have four or five members in the workforce, which would put its total monthly income at over EGP 10k \u2014 enough to sustain an entire family in a village where living cost is much lower than in urban areas \u2014 El Bahy said, pointing to industries that mainly rely on untrained workers. \u201cImposing the minimum wage on such companies would push them to let go of a number of their employees.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

The gov\u2019t recently hiked private sector minimum wage by 11%<\/p>\n","protected":false},"featured_media":607701,"template":"","categories":[7334],"tags":[104,1548,633,7333,235,131,71],"class_list":["post-607700","inside_industry","type-inside_industry","status-publish","has-post-thumbnail","hentry","category-inside-industry","tag-economy","tag-enterprise-inside-industry","tag-enterprisepm","tag-inside-industry","tag-labor","tag-manufacturing","tag-minimum-wage","wpautop","entry"],"acf":{"mongo_id":"15796852-a5fc-4935-b41d-fd4e949f963e","is_powered_by":false,"story_type":"2","photo_url":"https:\/\/ent.news\/2023\/10\/378.jpg","photo_position":"above","homepage_title":"","full_issue_title":"A deeper dive into the private sector minimum wage","related_issue":[607684],"teaser":"The gov\u2019t recently hiked private sector minimum wage by 11%","voice_url":"https:\/\/s3.us-east-1.amazonaws.com\/ent.news\/audio\/2023\/10\/.d20a7884-7db4-4df1-8b19-4b444eac4189.mp3"},"yoast_head":"\nA deeper dive into the private sector minimum wage - 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