BEIRUT: A proposal by Labor Minister Charbel Nahhas to increase wages by 20 to 30 percent will be discussed by the Cabinet Tuesday as the General Labor Confederation sets the stage for possibly the largest general strike in Lebanon’s history Wednesday.
The GLC is organizing this strike as part of their effort to pressure the government to raise the minimum wage to LL1.2 million.Prime Minister Najib Mikati, who is is under pressure to find a solution prior to the planned GLC strike, has been in contact with both the GLC and representatives of the private sector, in order to reach a common understanding on the new salary scales.
But until now, all these efforts have been unsuccessful as both side have refused to make any compromises concerning their demands.
The private sector has been clear that it will reject any salary increase under what they termed “delicate economic conditions,” warning the government that any hasty decision to raise wages could compel some companies to lay off the workers.
Sources close to Mikati told The Daily Star Monday that there “might be” a last minute solution based on increasing the minimum wage by LL250,000.
“Prime Minister Mikati is trying to [promote] the idea of increasing the minimum wage to LL750,000, in addition to hiking transportation and education allowances. Until now, this suggestion has [been supported by] some because of [a certain] flexibility demonstrated by the GLC but it is being rejected by representatives of the private sector.”
Sources close to Mikati have also said that the prime minister might meet with private sector representatives later in an effort to talk them into accepting his proposal. Private sector representatives are also scheduled to meet Parliament Speaker Nabih Berri Tuesday.
The government is not, however, obliged to heed the demands of both the unions and the private sector. Any future adjustment to the minimum wage in Lebanon is instead likely to be an amount between those requested by labor and private industry.
Nahhas told The Daily Star that he will raise the recommendations announced Friday at the last Price Index Committee meeting in the Cabinet Tuesday.
The recommendations included a 20 percent wage hike, universal health care coverage for all Lebanese residents, and the phasing-out of NSSF fees, which would provide a further 9-10 percent boost to wages.
“I will head to the Cabinet’s session with the same recommendations I announced at the [last] Price Index Committee meeting,” Nahhas said.
Nahas thought wage increases were vital, arguing it would not have significant negative consequences on the economy and budget.
Referring to the Price Index Committee’s recommendations announced Friday, Nahhas said, “if implemented, it will not significantly swell inflation because the Lebanese economy [is not experiencing low unemployment].”
When asked about effects on the budget deficit he said, “I will suggest the package be funded through taxing new articles like capital profit gains and real estate profits.”
The minister said he was against increasing VAT or similar taxes.
Nahhas also suggested that the government’s role was not to be an arbitrator between different sides but to craft sound policies.
“The Cabinet will discuss the recommendations of the Price Index Committee, the only official recommendations, and decide on what aspects of it to adopt,” Nahhas said.
President Michel Sleiman had discussed the subject earlier Monday with a delegation representing the business sector headed by Adnan Kassar, head of Arab Chambers of Commerce. However, no clear middle ground was unveiled.
“I will continue with efforts to [find a solution in] everyone’s interest. Serious and rational dialogue is very important in reaching a solution suitable to both workers and employers,” Sleiman said after the meeting.
The delegation and Sleiman discussed economic difficulties facing businesses in light of instabilities locally and in the Arab region. Kassar argued that businesses will find it difficult to adapt if wage increases and additional taxation are implemented, declaring any solution must be to be all-inclusive. “The solution has to be a comprehensive socio-economic policy crafted by all sides: the government, workers and businesses,” Kassar said.
“This can provide a long-term social security net that contributes to increasing purchasing power, productivity, and creating new job opportunities rather than forcing businesses to dismiss employees and close down partially or entirely [because of wage increases],” he added.
Ghassan Ghosn, head of GLC, said earlier, “the private sector’s intransigence proves their support [for] policies impoverishing the Lebanese. The GLC will face these policies by heading to the general strike Wednesday.”
Ghosn had met a delegation from the Bankers’ Associations and Central Bank Employee’s Association Monday who both restated their commitment to participate in the upcoming Oct 12.strike.
The Association of Gas Stations Owners, the Union of Workers Associations in South Lebanon, the TMA Workers’ Association, and the Secondary Teachers Association also assured that they will take part in the general strike.