Global Labor Strategies: In the Shadow of the Pyramids

Their payment was three weeks late and their supervisors notorious for corruption. So Egyptian workers at Deir El-Medina stopped work and walked out. The year was approximately 1500 BC. It may have been history’s first recorded strike.

At the very end of 2006AD another group of Egyptian workers, angered at the denial of their year-end bonus and the corruption of their managers, quit work and shut down their workplaces. The strike startled the Egyptian people, and apparently the government and the government-owned employer as well.

According to the English-language Al-Ahram Weekly, the strike started with night-shift workers who were enraged at the company’s decision not to pay a bonus that had been promised by Prime Minister Ahem Nazif. The next day they were joined by the day shift, who occupied the plant and a nearby street. Government security forces surrounded the area and cut off electricity to the plant. Eventually 27,000 workers were involved, including 4,000 women, who say, according to Al-Ahram Weekly, they are “standing up for their children.”

Workers blamed the new chairman of the company, Mahmoud El-Gibaly, for squandering company assets in corrupt deals and appointing incompetent cronies to high positions. They carried coffins labeled “El-Gibaly is dead” and hung him in effigy.

After five days, the government retreated and offered to restore the bonuses. According to an IPS article on the strike by Emad Mekay, an employee reported that on return to work, “The cashiers were sitting to greet the workers with their dues the minute they walked into work.”

The strike reflects both the long history of the Egyptian textile industry and the recent impacts of globalization and neo-liberalism.

The textile industry represents about a quarter of Egypt’s industrial production and of its industrial employment. The industry, along with many others, was nationalized under Nasser in the 1950s. Government-sponsored unions were established for much of public employment. All trade unions must belong to the Egyptian Trade Union Federation, although the International Labor Organization’s Committee of Experts has repeatedly emphasized that a law requiring all trade unions to belong to a single federation infringes on the freedom of association. A number of explosive wildcat textile strikes were put down by official violence, sometimes lethal, over the years. The last strike in Mahala El-Kobra was in 1988.

Since the 1980s, the U.S. has been pressuring Egypt to liberalize its economy and privatize its public industries. In 1987, Egypt accepted an agreement with the IMF that established structural adjustment-style privatization. The Mubarak government has enthusiastically gone along with most of the program, but, in the view of the advocates of industry investors, has dragged its feet on textile industry privatization. Egyptian labor rights advocate Mohamed al-Kahlawi argued that cuts in wages and benefits for the Mahala El-Kobra textile workers may have been intended to prepare the company for sale to private investors. After all, workers everywhere know that when officials try to dress up the balance sheet, it’s often a warning sign that the company is about to be put on the market.

As WTO rules have ended US and EU import quotas for Egyptian textiles, concern has grown about the “competitiveness” of the industry. But lowering of wages for Egyptian textile workers to make them “more competitive” exemplifies the absurdity of the “race to the bottom” of the global economy. A 2004 study by the American Chamber of Commerce in Egypt (AmCham) found that an “advantage” of the Egyptian industry is that Egyptian wage levels are among the lowest in the world. The average wage of an Egyptian textile worker at that time was $110 per month. This was 19 percent of those in Turkey, 35 percent of those in Tunisia, and 8 percent of those in Israel.

Despite this “comparative advantage,” another study by the American Chamber of Commerce in Egypt argued that “certain features of the Egyptian labor market need to be modified if economic reform and growth is to be attained.” It advocated in particular that job security provisions for employees and wage-setting rules for public enterprise workers needed to be abolished or reformed.

Many of these proposals for “encouraging labor practices in line with economic reform” were included in a 2003 “reform” of Egyptian labor law.

But such “reforms,” promoted by AMCHAM and U.S. investors, left a few things unreformed. Egypt has approximately 1.5 million child workers. It currently has no minimum wage. A worker at the Al-Mehalla Textile Company told Emad Mekay,

“We carried on the strike because we couldn’t take it any longer. We produce a lot but get back very little. Our salaries have become so low we cannot even buy the clothes we manufacture.”

Upheavals like the one at the Al-Mehalla Textile Company are inevitable as long as U.S. investors, the IMF, and the World Bank go around the world trying to drive down conditions for workers. They may maintain that their program is for the benefit of everyone. But workers who are close to the scene can see the direct enrichment of corrupt officials that occurs under both government and private ownership.