Lebanon Businessnews News
 

Controversy over wage increase
Minister of Finance endorses raising low wages, business community vetoes call
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July 22, 2011- President of the General Labor Confederation, Ghassan Ghosn, visited Minister of Finance Mhammad Safadi on Thursday, as part of the GLC’s efforts to attain an increase of the minimum wage.

Talking to the press after the meeting, Ghosn quoted Minister Safadi as saying: “Our priority is for increasing low wages. We will tackle livelihood issues and work to upgrade social services so as to alleviate the pressure on low-income individuals.”

The GLC has been lately calling for a raise of the minimum wage from LL500, 000 (about $334) to LL1,200,000 ($800). Business groups have criticized the call saying that the economy is suffering enough burdens already.

“The increase of production costs and the massive rise in fuel prices make Ghosn’s proposal unfeasible,” said Ziad Bekdash, Vice-President of the Lebanese Industrialists Association. Bekdash said the GLC is asking for an irrational minimum wage, which no business owner could afford and which would urge a close down of many factories. “Increasing wages directly ends in a rise in prices of commodities, rents, and services, which will raise inflation rates,” he said.

According to Bekdash, increasing wages cannot be attained without giving serious motives for boosting production and protecting local industry from cut-rate imports.

Mhammad Choucair, President of the Federation of Chambers of Commerce, Industry and Agriculture has rejected the proposal. He said that such an increase will bankrupt 80 percent of the local private companies.

The Beirut Traders Association called against the minimum wage increase. “The increase in wages in the past has triggered a growth in inflation rates,” the Association said in a statement.

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Date Posted: Jul 22, 2011