U-turn here and there

Did Egyptian workers become poorer or richer? Did the revolution affect how much Egyptians earn? Did inequality in earnings fall following the revolution? These are all questions that Dr. Mona Said tried to answer in her study titled “The Differential Dividends of Revolt? Wage and Inequality Adjustments in the Egyptian Labor Market in the Era of Financial Crisis and Revolution”. Through her study, Said wanted to examine what happens to real wages and whether inequality in wages has changed or not. She also wanted to see how the proportion of low waged individuals has evolved, and whether there is segregation in the labor market in Egypt.

Is the Egyptian labor force better or worse off? Rise and Fall
Using the four nation-wide labor force sample surveys (the 1988 LFSS, the 1998 ELMS, 2006 ELMPS and 2012 ELMPS), Said’s study found that wages took a U-turn in 2006; increasing following a period of wage erosion between 1988 and 1998. Real wages started rising again in Egypt by 2006, and rose even more in 2012, going back to the 1988 levels. Even though this is all good news to Egyptian labor, this is not the whole picture as the share of low waged workers has increased in 2012. The study shows that we witness an inverted U-shape in the share of workers who fall below the poverty line. Workers below the poverty line were 34% of the labor force in 1988, but this share increased in 1998, and increased again in 2012, following a fall in 2006. In addition, wage inequality rose in 2006, when compared to 1998, and remained stable since then.



Last, Said found that returns to women in the labor market have improved, when compared to men. However, this idea needs to be considered with care since a lot of women have been leaving the labor force lately. The decreasing participation of women might mean that those who remain in the labor market are the ones at the upper end receiving high wages, while the ones receiving low wages have left the labor market all together.

Food for thought
With all these thought-provoking results, it would be interesting to see how these factors have changed following the revolution. Egyptians have taken the streets in January 2011 calling for “bread, dignity and social justice”. These demands might have not been reached by 2012 when the survey was collected. But we hope that a few years down the road, Egyptians’ workers situation would improve.

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One Response to U-turn here and there

  1. If you are spending a lot more than you make,
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