Saturday,16 December, 2017
Current issue | Issue 1186, (27 February - 5 March 2014)
Saturday,16 December, 2017
Issue 1186, (27 February - 5 March 2014)

Ahram Weekly

Underpaid and unmotivated

The government has been taking the side of capital against labour for the past forty years. Could this be about to change, asks Hayat Hussein

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Al-Ahram Weekly

On 19 November, Ahmad Khayri, a member of the Egyptian National Labour Federation (ENLF), broke down in tears during a meeting of the 50-member committee drafting the country’s 2014 constitution.

The unusual show of emotion by a veteran unionist marked a turning point in the country’s labour history. The 50-member committee, on which he served as assistant secretary, had just abolished the 50 per cent quota for workers and peasants in parliament. The ratio, introduced for the first time in 1956, was a sort of political affirmative action campaign designed to ensure that the downtrodden classes had a say in the country’s affairs – a vestige of a socialist past some now consider outdated.

ENLF chief Abdel-Fattah Ibrahim had a similar reaction to the abolition of the parliamentary quota for peasants and workers. He called the abrogation a “black day” for Egyptian labour. However, Ibrahim still urged workers to vote yes to the new constitution.

The loss of the 50 per cent parliamentary quota is but one in a long series of loses that labour has endured over the past 40 years. According to Abu Bakr al-Gindi, head of the Central Agency for Public Mobilisation and Statistics (CAPMS), more than 60 per cent of Egyptians are classified as poor, with unemployment running at 13 per cent, and as high as 30 per cent among the young.

With such figures in mind, it is not hard to see why Egypt’s working classes were in turmoil even before the 2011 Revolution.



WORKERS IN REVOLT: The revolutionary zeal that brought down former president Hosni Mubarak may now have petered out, but labour protests have not died down in the country.

Hardly a day passes without the report of industrial action in one factory or another. Workers’ demands focus on the usual range of pay and working conditions, but often they also clamour for action of a structural type, like the opening of closed factories, the reinstatement of dismissed colleagues, or the government’s takeover of privatised companies. And they are not only demonstrating and picketing – often they file lawsuits to back their claims and win.

The triple goals of the 25 January Revolution – bread, freedom, and social justice – resonated with the demands of the country’s labour movement. But many workers now feel cheated, saying that action on these goals has been either lax or late.

Political activist Mostafa al-Basyouni has told Reuters that in late 2006 the former Mubarak regime was getting ready to hand power over to Mubarak’s son Gamal. This was when the labour movement had taken charge, he said, to change the political tide in Egypt.

In December 2006, Egypt was hit by the biggest wave of labour protests seen since the 1940s. Nearly two million workers took part in all kinds of industrial action, and the government’s attempts to suppress the labour risings ignited even more resistance. The 2008 uprising in Mahallah, for example, taking place in the country’s largest textile-producing city in the Delta, set the stage for the political upheaval that followed.

Mahallah workers came to Cairo and unleashed a wave of protests at the doorsteps of the cabinet, the parliament, and several ministries. The labour movement had come of age. After years of playing by the rules of the government-controlled unions, the workers were now finding their voice and were ready to fight for their cause. It was this spirit that fuelled the newly-formed pro-democracy groups, including the 6 April Movement.

On 30 January 2011, workers broke with tradition once more, this time by setting up Egypt’s first Federation of Independent Trade Unions (FITU). And the protests also went on.

It was around this time that the labour movement added substantial other demands to its customary workplace ones. It called for re-opening idle factories, for example, and for the removal of corrupt managers from companies.

Some say that the labour movement was even instrumental in bringing down the government headed by former prime minister Ahmad Shafiq, which was appointed by Mubarak just before he was forced out of power. Workers then continued to protest under ousted former president Mohammed Morsi, the Muslim Brotherhood president who was removed from office by the army on 3 July last year, exactly a year after his election.

According to the Egyptian Centre for Economic and Social Rights, a NGO, the number of labour and social protests held in 2012 exceeded the total number of protests held between 2001 and 2011.

In the final months of 2013, the country’s labour movement held hundreds of protests, some on a large scale. Workers at the Iron and Steel Company, with 12,000 workers on its payroll, held a month-long strike, for example. Workers at the Al-Ahram Print House also went on strike for the first time in recent memory. Thousands of Chrystal Asfour workers did the same.

In Alexandria, 10 Ramadan City and Suez, workers clamoured for better pay, improved working conditions, the removal of officials perceived as corrupt, and more.

Ibrahim Awad, a former International Labour Organisation (ILO) director and a public policy professor at the American University in Cairo, believes that the labour problems in Egypt are due not just to low wages, but also to poor education and training.

Speaking to the Weekly, Awad said that inferior education led to low productivity, not only of workers but also of institutions in general. Such poor quality education, he said, was due to inadequate government spending. “The education crisis is to a large extent connected with funding. Developing up-to-date curricula is not enough, since how can you teach properly when you don’t have enough classrooms?”Inferior education brings down the level of productivity and thus undermines the economy. Despite increases in the public budget for education, there is still a huge gap between needs and resources, Awad said.

Over the past few years, government spending on pre-college and college education combined has stood at 4.6 per cent of the state budget, way below the international average, according to Awad.

The 2014 constitution states that budget spending on education should be increased to six per cent. But this measure will not go into effect for three years.



A NECESSARY MINIMUM WAGE:  Awad also said that poor pay was a disincentive to workers. “If a worker receives fair and adequate pay, this motivates him to work better and to increase his productivity,” he said.

Even before the 2011 Revolution, several workers’ groups had filed lawsuits to force the state to introduce a minimum wage. Although the courts ruled in their favour, the government failed to act.

The government increased wages by 10 per cent annually for its own six million employees. But it failed to introduce minimum wage regulations for the 17 million workers who work for private businesses.

In January 2014, minimum pay of LE1,200 per month was introduced for government employees. But the new Supreme Council for Wages is still negotiating with business representatives on minimum pay for the private sector.

Representatives of the private sector oppose the idea of a minimum wage, preferring to talk instead about a “minimum income,” a concept that includes the tips some employees may receive from clients in the service industry, for example.

The Egyptian Federation of Industry has now agreed to raise the minimum wage for the insured from LE400 to LE700, according to Mohammed Hanafi, chairman of the Chamber for Metallurgical Industries. However, setting a minimum wage could exacerbate unemployment, causing businesses to lay off workers to save money, Hanafi said.

Some private businesses in the tourism sector do not pay a minimum wage, but those working in them can often supplement their incomes by tips, Hanafi added.

Ahmad al-Borayi, minister of social solidarity, said that a minimum wage was necessary for societal reasons. Set at the subsistence level, such a wage would allow workers to meet the bare minimum of their needs.

Unless workers received this amount, they would have to seek an illegal means of making a living, al-Borayi added. He said that the problem of low wages could be resolved if a law was introduced that would guarantee automatic cost-of-living increases for all workers. The Egyptian salary structure was lopsided, he said, since such increases only applied to 20 per cent or so of wages.

The idea of a minimum wage in Egypt was somewhat skewed, he said. In other countries, minimum wages were applied in the private sector only, whereas in Egypt – at least so far – they were paid to government employees.

However, would employers pay higher wages if they could get away with paying less? This question was posed by Dalia Moussa, a specialist in labour rights at the Economic Research Centre in Egypt.

Since the beginning of the privatisation process in Egypt, she added, the government had been taking the side of business at the expense of labour. Workers also did not just suffer from poor pay, but they also risked unfair dismissal.

While workers who had been unfairly dismissed could go to court to demand compensation, justice was slow. “It may take years to win compensation estimated at two months of pay for every year worked,” Moussa said.

When workers stage a strike to demand better pay, employers often react by closing down factories. This is what the Fargallah Company in Alexandria, with 6,000 employees on its payroll, did. Pharco Pharmaceuticals also closed down for a month in similar circumstances.

“In some companies that are owned by foreign investors, when workers demand better working conditions their bosses bluntly tell them that they do not intend to give them rights that the country doesn’t guarantee them,” she said.



TAKING OVER FACTORIES: the government also often sends in the police to quell labour protests. In some cases, workers have decided to operate their own factories after the owners have fled the country.

Muhammed Sultan was authorised by the public attorney to run the Nubab Plastic Company in 6 October City, for example. Speaking to the Weekly, he elaborated on the ordeals of his company. “May God give us compensation,” Sultan started out by saying, using a stock phrase from Arabic to denote his despair at worldly justice. The owner of the company had lost interest in running the company following the expiration of a 10-year tax holiday.

“He claimed that the former Mubarak regime was harassing him, although the company was profitable and employed 1,500 workers,” Sultan said. After the 2011 Revolution, the owner left the country, abandoning what was by then a heavily indebted company.

It was then that the company workers refused to shut down the business and instead filed lawsuits to get an order from the public attorney to keep it afloat. However, even this was a challenge. “The company was in debt to the ministry of electricity, which cut off the electricity supply, leading to a stop in production,” Sultan said.

The government also discontinued a subsidy from its Emergency Fund that it had given the company to keep it running. Now most workers have left to seek employment elsewhere, and only 350 workers are left struggling to keep the company running. The owner is also said to be trying to reach an agreement with the government allowing him to return to the country.

Sultan believes that the owner is offering the government money in return for a legal amnesty and to raise the money he may have to sell the company’s assets. “However, we are defending [the company] because we have spent our lives working for it. I started working in the company when I was 26, and now I am 40. Some of us are at retirement age. What are we supposed to do? Most companies only hire young people,” Sultan added.

Thousands of workers found themselves in difficult circumstances when their companies were privatised in the 1990s. And many senior officials from the former Mubarak regime, including former prime minister Atef Obeid, are now facing corruption charges in connection with dubious privatisation deals made over the past 20 years or so.

Successive governments during the Mubarak years sold off dozens of state-owned companies between 1991 and 2008. The state had owned 27 holding companies and 314 affiliates before privatisation, but by June 2012 its ownership had been trimmed down to nine holding companies and 146 affiliates.

Nearly 1.5 million workers in the state-owned sector had lost their jobs as a result, leaving only 400,000 workers in the employment of government-run enterprises. In the textile industry, workers demanded the de-privatisation of their companies, arguing that these had been sold to their new private owners at less than the market value.

The buyers had made millions, they said, mostly by taking these companies apart and selling them piece by piece, while the workers were left jobless. Some of the government-owned companies were also situated on prime real estate, offering a potential windfall to private speculators.

The Nile Cotton Ginning Company (NCGC) is a case in point. NCGC workers won a court ruling in September 2013 annulling a privatisation deal done in 2007.  Wael al-Said, lawyer for the NCGC workers, said that state-owned industry had been systematically subverted in order to promote the interests of big business.

Deals in which business tycoons took over government-owned companies reeked of corruption, he stated. The sale of the Dekheila Iron Company to the now-imprisoned steel magnate Ahmad Ezz was a case in point, al-Said argued.

With help from rights activists such as former presidential candidate Khaled Ali, workers took legal action. Consequently, the courts annulled the deals privatising five companies, including the Steam Boilers Company, a leading regional company in its field.

The workers of Assuit Cement, sold to the Mexican-owned CEMEX nearly 20 years ago, are also hoping for the annulment of the sale of their company. Hassan Hammam, the lawyer for the Assiut Cement workers, told journalists that the workers had been approached by the local governor and other dignitaries to start negotiations on an out-of-court settlement.

“We presented four demands to prove our seriousness in finding a solution,” Hammam said. These demands included compensation, the reinstatement of jobless workers, a share in the profits, and payment of legal fees. The talks are still ongoing.

“THEY’ RE LAZY!” Nearly 16 years ago, the present writer visited the Assiut Cement Company right after the sale to Cemex. During lunch with the company’s media officer, she said that workers who had agreed to take early retirement were now protesting.

“They are protesting after spending their compensation payments. We know that some of them married with the money they got in compensation, for example,” she said.

Hers is a common opinion in business circles. One businessman who runs a garments factory in the 10 Ramadan City said workers expected to get paid without doing their jobs.

Moussa also said that businessmen had a low opinion of their workers. They make them work up to 12 hours a day for low wages and then they claim they are doing a poor job, she added.

Al-Said said that some government employees were actually lazy, however. “They work in private companies and only show up at their government jobs at the end of the month to get heir salaries. But the people who do that are in a minority,” al-Said added.

According to Awad, the claims of businessmen cannot be taken at face value. “We must ask ourselves the question of whether Egyptian workers are somehow born lazy,” he said, adding that in fact workers were unmotivated because they had to put up with a host of adverse economic and social conditions, including low pay.

The Gallup Foundation recently released a study about worker loyalty in various Arab countries. It found that only 13 per cent of Egyptian employees were loyal to their companies and took part in improving them. 55 per cent were unmotivated, adding little to the work they were involved in. And nearly 32 per cent obstructed the work and could actually be causing harm to their own organisations.

Decent wages could alter this situation, however, for salaries were found to be considerably higher among those workers who were pleased with their jobs and loyal to their companies.

Gallup found that nine per cent of Egyptians enjoyed a sense of well-being based on their view of their education and accomplishments, whereas 70 per cent were dissatisfied with their lives, and 20 per cent had “given up.”

Egyptians in general were the region’s least-satisfied people, the survey found, sharing with the Palestinians the third-lowest ranking on the well-being index.

The widespread protests seen in Egypt, Libya, Tunisia, Yemen, and Syria in 2011 were but one outcome of the dissatisfaction generated by a faltering economy, a poor distribution of wealth, and a lack of care for the working classes.

According to Gallup CEO Jim Clifton, low-growth countries, in which joblessness is high, are particularly prone to political turmoil. Since the world economy slowed down in 2008, political disturbances have become more common worldwide.



ONLY LIMITED GAINS: why haven’t workers in Egypt gained their rights after years of struggle? One of the main reasons is the weakness of the trade unions, which until recently were subject to strict government control, according to Awad.

Strong trade unions can exercise leverage on business. But the current Egyptian Trade Union Federation is run by the state and consequently lacks independence, he said.

During the rule of former president Gamal Abdel-Nasser, the state was eager to defend worker’s rights, Awad added. But under his successors, Anwar al-Sadat and Hosni Mubarak, the role of the state shifted, and the government began to favour big business.

Political representation in parliament, the loss of which brought labour leaders to tears, was not that important, Awad said. What matters is the ability of labour to organise. “Worker’s representation in parliament existed for over 40 years. But what did it accomplish for the workers of Egypt,” he asked.  

Awad said that the state needed to take care of workers, if it was serious about promoting economic growth. According to Abdel-Ghaffar Shokr, founder of the Socialist People’s Alliance, writing in mid 2007, the 1952 Revolution had taken a simultaneous interest in the welfare of workers as well as in industrial growth. As a result, the share of industry in gross national income had increased from eight per cent in 1952 to 18 percent in 1970.

During the 1960s, the number of manufacturing jobs had increased from 625,000 to 916,000, an increase of nearly 50 per cent in one decade. To support its ambitious industrialisation programme, the government had also opened numerous technical schools.

“Other countries used to request workers from our company in order to maintain their equipment and train their workers in steam boilers,” said Adel Qorani, a former worker at the Steam Boilers Company.

Also during the 1960s, the government allowed workers a share of the profits, improved pensions and health insurance. Unfair dismissal was outlawed in the early days of the 1952 Revolution, according to Shokr.

Yet, only a few decades later, “the workers have few rights, and even these go unheeded,” Moussa lamented.

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