With the decline of real productivity under Egypt’s socialist era and the country’s subsequent drift between economic openness and restriction, the public sector has, for decades, functioned as a fictitious ‘sponge’—absorbing workers to shield social stability from the threat of soaring unemployment figures. The government, for years, sought to tackle this issue by hiring as many Egyptians as possible in its factories and state-owned companies, regardless of actual need, and at wages so low they barely covered the first few days of the month. All of this took place in the absence of any meaningful concept of a minimum wage. The result? Official unemployment figures that, on the surface, appeared far from catastrophic.
Yet, the reality is that current unemployment rates—despite inconsistencies in how they are measured—would likely double or even triple if a realistic minimum wage were introduced, one that could actually meet the basic needs of Egyptian workers. But this conundrum remains deliberately obscured by the persistent lack of accurate data and the blurred lines between fact and economic theory.
Once Egypt fully embraced free-market economics, mass privatisation of the bloated public sector became ‘inevitable’. These state-owned enterprises, weighed down by decades of unnecessary workforce accumulation, were offloaded—often at rock-bottom prices. To soften the blow, agreements were made with buyers to prevent mass layoffs. But in practice, these agreements have been routinely circumvented through an evolving array of strategies designed to drive workers out.
Take, for instance, a recent report by the Land Centre, which sheds light on what has been happening at Omar Effendi, a once-prominent state-owned department store chain. According to the report, the company’s management has been deliberately disrupting operations in certain departments to pressure employees into quitting without compensation. Workers have lodged numerous complaints, detailing how management refused to renew the licences for the vehicles they use, citing a supposed lack of funds. At the end of the month, incentives and profit shares were slashed, followed by a move to revoke their attendance records—effectively removing their names from payroll. This subtle yet calculated approach leaves workers with little choice but to leave their jobs.
Complaints indicate that dozens of employees have been forced to resign under this new strategy—without formal dismissal notices. The report suggests that Omar Effendi is merely one example of a pattern repeated across many privatised companies, where denying workers their legal entitlements has become a favoured tactic for ‘quietly pushing them out’.
What is particularly alarming, however, is that state-owned enterprises—fully aware of their own chronic labour crisis—have now started adopting the very same methods. Increasingly, worker protests are no longer directed at the private buyers of former public companies but at government-run firms employing identical dismissal tactics. This trend appears to be a new state strategy to address the long-standing labour problem—perhaps as a preemptive measure to avoid future conflicts with workers after companies are sold off. The result? A convenient resolution for the government, where it can finally rid itself of the never-ending headache of disgruntled workers, while both sides of the privatisation equation can proceed undisturbed.
This article is originally published by AlBorsa in Arabic and later AI-translated by South Push.