With elections due later this year in Egypt, people have started to step up their claims for an increase in the minimum wage.  The 35 Egyptian Pounds per month minimum wage has continued unchanged for the last twenty six years and a great number of regular Egyptians believe something needs to be done as inflation is around 10%.

 

Huge groups of protestors in recent times clashed with police as they demanded a growth to 1,200 Egyptian Pounds per month. At present, nearly 40% of Egyptians live below the poverty line and the rise in the minimum wage would make a big effect to a significant number of families. Nevertheless, it is being suggested that the Egyptian government are considering an increase to 450 Egyptian Pounds a month.

 

There is little question that a boost in wages will help out a huge number of men and women and in an election year, such a move would undoubtedly help out the government at the polls. At the same time, there is the little matter of how such an increase would be paid for. Governments do not have a unlimited supply of wealth with which to pay public sector workers and similarly businesses and organizations can only pay wages out of the income they bring in.

 

Egypt makes much of its income from natural resources such as oil, coal and gas ın addition to tourism. Government should be able to pay extra for the increase in minimum wage for its personnel by means of a combination of tax rises, efficiency savings and redundancies. Never the less, they should really take note that tax rises don’t always work as in 2005, the rate of corporation tax was reduced from 40% to 20% year tax revenues the following year doubled.

 

A possible area to be hit with increases is the overseas holiday-maker. The costs of visas could be raised to bring in increased government income while the private sector could very well have to raise hotel rates at hotels and prices at restaurants in order to pay their staff the increased minimum wage.  These expenses would almost definitely 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 been terrific value so there is scope for an increase there. However, pressure may be put on airlines to decrease airfares so as not to price getaways to Egypt too far beyond their current levels.