Lebanon Businessnews News

Ministry of Labor proposes
increase in minimum wage
Business associations are against it
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The Ministry of Labor has suggested increasing the minimum wage to LL1,200,000 ($800) from the current LL675,000 ($450).

The ministry will invite business associations and the General Confederation of Labor Unions (GCLU) to meet at the session of the Cost of Living Indicator Committee on August 9. The meeting will include representatives from several ministries, including Labor, Finance, and Economy and Trade.

Sejaan Azzi, Minister of Labor, said: “I have suggested this increase in the minimum wage due to the decrease in the purchasing power and the increase in the cost of living.”

The Indicator Committee will be required to study the percentages of inflation that are issued by the Central Administration of Statistics (CAS) and amend the minimum wage accordingly.

The Consumer Price Index (CPI) has been down since two years. A 3.4 percent deflation was registered in 2015, for the first time in the post-war era. CPI dropped to 95.92 in December of last year from 99.29 in the same month of 2014, mainly due to lower fuel and transportation costs resulting from lower oil prices.

Mohamed Choucair, Chairman of the Federation of Chambers of Commerce, Industry, and Agriculture said: “How can the ministry discuss increasing wages in such an unstable economic situation?”

Choucair said that such a decision could lead to the dismissal of scores of Lebanese employees,who would be replaced by Syrians.

Hasan Fakih, Vice Chairman of the GCLU, said “Although inflation has decreased in the last two years, none of the prices have really declined.” He cited examples such as house rentals, and the unchanged “service” transportation fare.

The Labor Unions are calling for an increase in the minimum wage of more than $800. “When we agreed to increase the minimum wage to $450 in 2012, it was within a package that recommended wages should be amended according to inflation at a later date,” said Charles Arbid, Chairman of the Lebanese Franchise Association (LFA). “Wages weren’t amended according to the inflation indicators,” he said. Inflation decreased from 2.7 percent in 2013 to 1.9 percent in 2014, according to the World Bank.

George Lyda, Director General at the Ministry of Labor, said: “Employees are affected by the poor economic situation, and employers should bear part of the ensuing responsibilities.”

Lyda said that both parties should sit together and talk in order to reach a solution that can be mutually satisfactory.

Fakih said: “If we weren’t able to reach a consensual agreement with employers as a result of that meeting, we will prepare for a wage reform battle.”
Reported by Rania Ghanem
Date Posted: Jul 29, 2016
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