Egypt’s Quick-Fix Minimum Wage Hike Fails to Calm Workers - NYTimes.com
▻http://www.nytimes.com/reuters/2014/02/03/world/middleeast/03reuters-egypt-wage.html?ref=middleeast&_r=0
“The minimum salary should be 3,000 pounds,” said Sayed Hussein, a physics teacher who sells rice and noodles at night to supplement his income. “If it doesn’t get resolved, we will all take to the streets. If this continues I will suffocate.”
The minimum wage applies to 4.9 million public employees and will cost the state an extra 18 billion pounds a year, swelling a budget deficit set to hit around 200 billion pounds this year.
But the government has presented no long-term plans to boost revenue to correct the fiscal imbalance, analysts say, instead pinning its hopes on two stimulus packages of $4.3 billion each.
These rely indirectly on Gulf aid, so if Saudi Arabia, the United Arab Emirates and Kuwait become less generous, that could force spending cuts, risking a backlash in the streets.
Egyptians depend on food and energy subsidies which account for a quarter of all state spending. Successive governments have hesitated to cut the subsidies for fear of public anger, mindful of the 1977 bread riots that challenged President Anwar Sadat. Bread shortages also provoked unrest under Mubarak in 2008.
As well as subsidies and the minimum wage rise, budget strains include a new constitutional obligation to allocate some six percent of spending on education, health and research.