Egyptian workers strike back as inflation bites

On 8 February, workers at Kiriazi, one of the largest producers of home appliances in Egypt, decided to go on strike.

They launched their industrial action after discovering that the company had raised their wages by only 300 Egyptian pounds (LE) (about $10) instead of the 1,000LE (some $32) they had asked for in order to be able to cope with the highest inflation rates that the country has seen in over five years.

The group of strikers complained that their average monthly salary was only around 2,700LE ($88), and even for those who have been working at the company for more than twenty years, the salary did not exceed 4,000LE ($130), according to the Centre for Trade Union and Workers Services (CTUWS).

Tension with the company escalated quickly when 18 workers were arrested following reports filed by the management accusing them of inciting a strike and work disruption.

In the end, the strike was called off within days after the two sides reached an agreement whereby workers agreed to resume activity in exchange for a wage increase of 1,000LE in two instalments and the release of the arrested strikers.

"Although still largely isolated and confined, this perceived surge in labour mobilisations is triggered by low basic wages that are losing value at a dizzying rate in the face of rampant inflation"

Strikes similar to the one led by Kiriazi workers in February have been taking place over the last few months in other large companies in Egypt’s industrial sector, and trade union sources who spoke to The New Arab noted that these are becoming more frequent.

Although still largely isolated and confined, this perceived surge in labour mobilisations is triggered by low basic wages that are losing value at a dizzying rate in the face of rampant inflation, which hit 25.8% in January. The strikes represent one of the few collective expressions of dissatisfaction and fatigue at the impact of the country’s deep economic crisis.

“The core problem is that companies, whether private or state-owned, are doing nothing for the workers. Prices are rising every day because of inflation, so you are supposed to have wage adjustments, an increase that is proportional to inflation. The problem is that there isn’t,” Kamal Abbas, CTUWS general coordinator, told The New Arab.

Shortly before their Kiriazi colleagues, in late January, workers at the carpet manufacturer Mac launched a strike at a factory in 10th of Ramadan city, east of Cairo, to protest the conditional annual salary increase approved by the company, which they considered low.

Other demands raised by Mac striking workers included a reform of their salary scheme, a restructuring of wages according to seniority, fixing increases based on total pay and not on base salary, and to stop deducting medical appointments from annual leaves.

At about the same time, workers at Leoni Wiring Systems, a subsidiary of a German company, went on strike at a production line in Cairo’s Nasr City to demand an increase in their pay and an improvement in their health insurance.

Before them, it was workers at the Beshai Steel Factory, one of the symbols of the heavy industry in Egypt, who staged a strike and a sit-in for over two weeks between late August and early September to demand a restructuring of salaries and better working conditions.

In February 2022, hundreds of workers at a factory owned by Universal Group for home appliances led another large protest to demand the payment of arrears, the fulfilment of previous labour agreements, and the improvement of working and safety conditions.

The spark that ignited the flame of the strike at Universal was the suicide of a colleague, Assem Afifi. Since 2021, there have been at least seven cases of suicides or suicide attempts by company workers, according to CTUWS.

One of the latest protests to take place was staged on 25 February by several hundred workers at Alexandria Container Handling Company, one of the companies on which Qatar has set its sights in recent months, to demand that management disburse the remainder of the share of the annual profits for the fiscal year 2021/2022 that it had promised them.

“It’s normal that you start to have a labour movement protesting to raise wages,” Abbas noted. “We have wages that have not increased and prices that are going up a lot. It’s normal to have protests; and I think there will be more,” he added.

The minimum wage in Egypt’s private sector, which was first introduced in 2022 and set at 2,400LE ($153 at the time), has significantly depreciated and is now 2,700LE per month (about $88 today). In the public sector, the minimum wage is 3,500LE (about $114), following the latest increase on 2 April.

"The core problem is that companies, whether private or state-owned, are doing nothing for the workers"

However, there are plenty of exceptions to the rule. The very ministerial decree that set the mandatory minimum wage for the private sector grants companies that are facing economic difficulties the possibility to apply for an exemption. And Abbas said that at least some 3,400 companies have benefited from these waivers.

Rahma Refaat, the legal advisor to the CTUWS, believes the figure could be even higher. “The government did not exercise any oversight on the implementation of the minimum wage decision, and consequently many employers did not implement the decision and did not apply for their official exemption,” she told The New Arab.

Shaaban Khalifa, head of the Private Sector Workers Syndicate, also stressed that most workers in Egypt’s private sector are employed in the large informal sector and in small and medium-sized enterprises, where it is harder to gauge their situation.

He further noted that the minimum wage decree provides that the minimum annual raise must be just 3% of the portion of the salary that counts for social insurance, rather than the 7% of the base salary that is required by the Labour Law.

All these exemptions, coupled with a general lack of control by the state and minimal penalties in cases of violations, put the country’s large companies in a position of strength and clears the way for them to often fail to even adhere to the minimum wage in place and the salary increases set by law, Abbas and Khalifa said.

“We have two sides here: one that is very weak, representing the workers, and one that is very strong, representing businessmen. The state should come in and help the weak side, so that there is balance,” Khalifa, who thinks the minimum wage should be 4,500LE, said.

In this context of minimal oversight and implementation of labour laws, the initial response of some of the companies affected by the recent strikes has ranged from making promises that then were not kept to shutting down factories and sending workers on unpaid leave.

More forceful measures such as threats, internal investigations, unfair dismissals and even filings with the police have also been reported. The arrest of some strikers has even been used by some companies, like Kiriazi, as a bargaining chip in negotiations with workers.

"In 2022, the Global Rights Index of the International Trade Union Confederation (ITUC), the world's largest trade union confederation, ranked Egypt among the 10 worst countries in the world for workers"

Egyptian labour law states that strikes have to be called by authorised unions, which after the adoption of a union law in 2017, are mainly reduced to a handful of state-controlled federations. This makes it easier for companies, like Leoni, to declare other strikes illegal.

“There are companies that have fired workers who protested, including strike leaders, or that have fired [those in] the workers’ independent committee in the factory,” said Malek Adly, a lawyer at the Egyptian Centre for Economic and Social Rights (ECESR).

“Then [there is the] security persecution, which we don’t know whether the factories have a hand on it or if it is a state policy towards workers,” Adly told The New Arab.

In 2022, the Global Rights Index of the International Trade Union Confederation (ITUC), the world’s largest trade union confederation, ranked Egypt among the 10 worst countries in the world for workers. It highlighted repressive laws, persecution of strikers, the suppression of protests, union-busting and unfair dismissals as some of the main abuses.

Marc Español is a Catalan journalist based in Cairo.

Follow him on Twitter: @mespanolescofet