Title: Impact of the minimum wage policy on consumption expenditure and poverty in Egypt
Authors: Eman Abd Allah Abd Allah Mohamed; Nayera Yehia Solieman Eid
Department of Economic Analysis of Agricultural Commodities, Agricultural Economics Research Institute, Agricultural Research Center, Ministry of Agriculture and Land Reclamation, Nady ElSaid St., No. 7, 4th floor, Dokki, Giza, Egypt
Department of Agricultural Economics, Agricultural, Biological Research Division, National Research Centre, El-Tahrir St., Dokki, Cairo, Egypt
Abstract: Development has not yet achieved its goals in developing countries due to the increase in poverty rates. In October 2013, the Government of Egypt decided to implement the monthly minimum wage policy to allow citizens attain their needs of different expenditure groups thus reduce poverty. The research estimated the monthly wage that allows poor household individuals attain their daily needs of different expenditure groups after the latest increases in prices, and compared it with the monthly minimum wage to find if it helped them move out of poverty. Findings revealed that such policy shall help move 53% of the study households out of poverty, but the rest are threatened to fall in poverty as prices go higher. The research recommended revisiting the monthly minimum wage periodically to match the rising prices to help improve the economic conditions of vulnerable categories for better health and economic performance to achieve development goals.
Keywords: raising the standard of living for Egyptian citizens; monthly minimum wage policy; poor categories; consumption expenditure; consumption expenditure categories; national poverty line; wages required to cover consumption expenditure needs; Egypt.
Int. J. of Economics and Business Research, 2018 Vol.15, No.2, pp.166 - 179
Submission date: 23 Dec 2016
Date of acceptance: 04 Feb 2017
Available online: 12 Jan 2018