Minimum wage hike. A controversial issue
Will the government raise the minimum wage?A scenario, some experts expect will result in layoffs and have an adverse impact on employment.
While the General Labor Confederation (GLC) calls for a strike on Oct 12 to improve living conditions, the proposed minimum wages increase ranges between two divergent views. According to the GLC, the salary rise is needed as Lebanese cannot keep up with high cost of living.
The GLC has recently asked the Lebanese government to increase the minimum wage to LBP1.250,000.Lebanon’s minimum wage which was last changed in 2008 is LBP500,000.
However, another opinion sees the proposed the minimum wage hike, requested by the (GLC), would negatively affect the Lebanese economy.
In July 2011, a study revealed by the actuarial firm i.e Muhanna & Co indicated that such a large and ad hoc increase in the minimum wage will result in negative repercussions on the economy, leading more to unemployment, higher inflation and consequently more poverty, according to Lebanon this Week, Byblos Bank’s economic publication.
The study stated that the GLC-suggested rise would result in layoffs and unemployment and lead to the closure of companies.
“The study noted that the adjustment in the minimum wage is expected to increase the average salary of employees in Lebanon by 52 percent. But due to disparities in salary levels, the increase in labor cost for instance in the agriculture and livestock sector would be as high as 99 percent and as slow as 24 percent in the banking and insurance sector,” according to the publication.
It’s worth mentioning, that consumer price index surged 5.5 percent annually in August 2011.
While this topic will be at the top of government’s agenda, workers who grumble about the high cost of living particularly the rise in the prices of commodities, just wait and see.
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