Economic Inequality and the Fall of the Middle Class

The economic decline of the middle class was arguably the most significant impetus for the populist uprising of January 25. Declining average wages were inadequate to support even the most basic needs for food, clothing, shelter, transportation, and education. As the government ratcheted up economic liberalization and privatization policies, subsidy reduction resulted in a 30 percent increase in gasoline prices in the summer of 2006.15 Skyrocketing food prices on the international market also increased the cost of food.16 From 2005 to 2008, the cost of staples such as milk, cheese, eggs, and beans increased by 100 to 150 percent.17 The prices of vegetables and cooking-gas cylinders also rose, disproportionately hurting the lower middle class and the poor.18 In mid-2010, the price of rice went up by 50 percent, meat prices rose by 40 percent and poultry by 25 percent. The increases could not be absorbed by state subsidies, leaving many Egyptians in a state of food insecurity.19 Meanwhile, the widening wealth gap between the common people and the elite was compounded by the rising cost of supporting a family among blue- and white-collar workers alike. In 2010, even households with two working-class incomes lived below the poverty line,20 as the average monthly wage of a typical textile worker stood at $45-$i07 per month.21

At the time of the uprising, most Egyptians’ real wages had diminished to the extent that approximately 20 percent of the country fell below the poverty line, while another 25 percent subsisted just above it.22 This stood in stark contrast to the fortunes of the country’s business elites, who used their privileged position in the National Democratic Party (ndp) to pass laws that channeled public wealth into their personal businesses. Beginning in the 1990s, when Egypt undertook a series of market-oriented reforms and enacted large-scale privatization, Egypt’s superrich became even richer as privatization schemes placed valuable state assets into their hands.23 Egypt’s burgeoning poor lived in slums while the economic elite lived in exclusive gated communities on the outskirts of Cairo and vacationed in expensive beach homes on the Mediterranean and Red Sea.24 And while wealthy Egyptians drew on the state’s treasury to pad their own pockets, over half of Egyptians could barely make ends meet.25

Large-scale labor migration into Cairo that began as early as the 1970s26 had turned the city into a teeming metropolis with over seventeen million inhabitants, many of whom lived in informal shantytowns. Poor Egyptians scraped together the little resources they had to build houses without regard for safety standards. To light their homes and access water, they tapped the state’s electrical grid and water pipelines without government approval.27 Meanwhile, over 10.6 million more apartments than households lay vacant in 2006, compared to only 1.5 million more dwellings than households in 1976.28

Further compounding economic grievances was the chronic police harassment of the public, particularly the poor. Officers demanded bribes from shopkeepers and minivan drivers, extorted street vendors and restaurants, and detained anyone unable to pay the bribes.29 Low-income Egyptians were frequently beaten, tortured to give false confessions, and pressured to become police informants.30 By the end of 2010, the police became the most loathed public institution in the country. Thus, it was no surprise that the January 25 uprising included violence against police officers and the burning of police stations.31 Indeed, such events were a testament to the extent of public anger toward the police as a state institution.

Not all socioeconomic conditions declined during Mubarak’s thirty-year rule, however. Literacy rose significantly, from 40 percent in 1990 to 64 percent in 2010.32 School enrollment, as a result, reached its highest levels. By the time Mubarak was deposed, 94 percent of children were enrolled in primary school, 88 percent were enrolled at the secondary level, and 35 percent were enrolled in high school.33 Despite the rise in school enrollment, investment in public education was declining. As a result, overcrowding in schools and overworked and underpaid teachers produced low-quality public education.34 That the protests of 2011 were instigated by the youth thus was not surprising. Egypt’s newly educated youth had expectations that their education would lead to a higher quality of life than that afforded to their parents—expectations that ran up against the harsh realities of Egypt’s lack of employment opportunities.

By 2010, more than 850,000 people entered the labor force every year.35 Approximately 75 percent of new entrants had to wait an average of five years to find their first job, with college-educated youth experiencing the highest rates of unemployment.36 Ninety-five percent of the jobless youth were college educated in 2006, up from 87 percent in 1998.37 In addition to slow growth, the privatization of state-owned enterprises contributed to high youth unemployment rates, as the government was no longer the primary source of employment for college-educated labor-market entrants.38 Employment in the public sector was halved from 1.08 million to under five hundred thousand between 1998 and 2004, with the formal private sector unable to absorb the growing number of new l abor entrants.39 Instead, over 75 percent of new labor-force entrants were pushed into the informal sector. By 2006, the informal sector constituted 61 percent of actual employment and produced one-third to one-half of the officially measured gdp.40

Despite these troubling trends, proponents of economic liberalization touted Egypt’s official decrease in unemployment from 11.7 percent in 1998 to 8.3 percent in 2006. Many economists, however, pointed out that the benefits of reduced unemployment were outweighed by the declining quality of employment and stagnant wages. In 2003, Egyptian lawmakers amended the country’s labor law to allow employers to hire workers on short-term contracts without medical or social insurance benefits.41 The law also stripped employees of labor rights by failing to provide guidelines on contract lengths, salary levels, hours at work, overtime compensation, vacation, and lunch breaks.42 Nor were employers required to provide health and injury insurance to their employees.43 In order to evade the new law’s already minimal employee protections, employers forced new hires to sign contracts that allowed the employer to fire them without warning, cause, or severance pay.44 Meanwhile, the monthly minimum wage had not been raised since 1984, which was the equivalent of twenty-five US dollars.45 Were it not for remittances sent from approximately 2.3 million Egyptians working abroad as of 2009, millions more Egyptians would have found themselves under the poverty line.46

With more than half of Egypt’s population under the age of thirty, and a third between the ages of fifteen and twenty-four, the economic insecurities perpetuated by Egypt’s economic liberalization programs and new labor law reached new heights.47 Youth-led movements such as the April 6 Kefaya movement and the Youth for Change leveraged the discontent to mobilize for political change.48 They sought what their peers in Western countries possessed: human rights, economic rights, democracy, and social justice.49 Youth activists rejected the government’s top-down-oriented initiatives aimed at gradual reform, and instead demanded a radical break from the existing regime, which they saw as fundamentally irredeemable.50

High youth unemployment also led many Egyptian youth to delay getting married and starting households.51 In a socially conservative Muslim country, this produced social problems such as increased sexual harassment of women in the streets, secret customary “orfy” marriages, and prolonged financial dependence on parents. As socioeconomic pressures mounted, more youth joined the ranks of an increasingly well-organized civil society. Political resistance to the Mubarak regime became markedly more aggressive than in the past in openly challenging the government and leveraging international media to shed light on their abusive practices.

 
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