A few thousand Egyptians lost their jobs both locally and abroad during the month of July alone—triggering labor unrest and highlighting the vulnerability of many private sector employees in Egypt, a local rights watchdog said in a new report.
The report, issued by the independent Center for Trade Union and Workers’ Services (CTUWS), concludes that private sector workers have been hardest hit due to insufficient job protections compared to the public sector. In addition to layoffs, employers are starting to force workers to take unpaid vacations, CTUWS Director Kamal Abbas told Al Masry Al Youm.
“The public sector primarily employs workers on long-term contracts which specify wages, benefits, rights and end-of-service reimbursements. These safeguards are typically not available in Egypt’s private sector,” he said.
It’s common practice in private sector enterprises for a worker to sign an undated resignation letter before starting the job, thereby giving the employer the right to terminate them at any time with no consequences, Abbas added. At the heart of that problem, he said, is the difficulty of forming proper independent labor unions to Egypt to negotiate for workers’ collective rights.
While conceding that the local economy has been damaged by the global financial crisis, the report also charges Egyptian business owners with exploiting the crisis for their own agendas.
“Numerous private companies have truly and genuinely suffered as a result of the financial crisis. This crisis has indeed proven detrimental to plenty of businessmen across Egypt, and plenty more workers,” Abbas said. “Yet there are a number of businessmen who are using this financial crisis as an excuse to shirk their responsibilities toward their employees and workers; they are making use of this crisis as excuse to cut costs and increase their profits.”
The report mentions that “businessmen shout out their grievances as they call for laying-off workers and reducing production costs in order to maintain their profits. While these businessmen may end up losing some profits, workers may end up losing their livelihoods.”
Abbas said the hardest hit sectors have been tourism, private sector banks, financial service companies and foodstuffs production, as well as construction and woodworking companies, but few sectors have not felt the impact of the global crisis.
“In the current economic climate, businesses are faced with the immediate challenge of a rapid and significant decrease in demand and the availability of credit. The net effect is that businesses have fewer customers, spending less money, while banks are withholding the funding that could help sustain businesses through this period. To compound the situation further, businesses are faced with the hidden challenge of gaining access to accurate information to make informed decisions based on hard data and not on speculation and rumor,” wrote Dave Robinson, regional CEO of communications firm Hill & Knowlton, on the website American Chambers of Commerce in Egypt.
Despite citing some signs of optimism for the local economy, Abbas believes the downturn will last up to three years, with many more workers losing their jobs.
He claims Egypt’s true unemployment rate might be as high as 17 per cent, far more than the 9-11per cent in most government estimates. The labor ministry’s media spokesperson could not be reached for a statement.
More 20 pages long, the CTUWS report—the fifth such monthly bulletin CTUWS—cites field surveys, governmental statistics and official financial projections. Abbas said the organization is still working to accurately track conditions in Egypt’s large informal economy.
“This crisis is sure to negatively affect the five million workers employed in the informal sectors as well, but it is extremely difficult to assess conditions in this sector since very little is published in terms of accurate statistics,” Abbas said.
Other limitations of the report: certain governorates are underreported, while other governorates (especially Cairo and Assiut) seem to receive the most attention.
At times the report reads rather incoherently with its plethora of statistics and figures.
The report also tracks dozens of employee sit-ins and demonstrations in July to protect layoffs or pay cuts. It specifically mentions labor actions among hotel employees, fertilizer production workers and ceramics factory workers. But Abbas said the spontaneous worker flare-ups and hard to track.
“We don’t know the exact number of sit-ins, protests or strikes held. There are numerous incidents of labor unrest…a great deal of which are small localized incidents which go unreported.”

Icelandic police fired pepper spray and made arrests at a demonstration outside parliament on Tuesday where protesters demanded the government that oversaw the country’s economic collapse step down, local media said.
Several hundred demonstrators, some hammering on pots and pans, gathered around the Althing, amid calls for the Icelandic government to step down, a Reuters witness reported.

Police used rubber bullets and tear gas to quell demonstrators in the Lithuanian capital Friday, as economic hardship burst into street-level rage in another European country.
With dwindling budgets forcing unpopular spending cuts and tax hikes in many countries, the global financial crisis is steadily emerging as a political threat to governments. Demonstrations have erupted in Lithuania, Latvia, Bulgaria and Iceland as bread-and-butter anxiety turns into anti-government rage.