The Egyptian Labor Market: Both Cause and Casualty of the 2011 Revolution

This blog is written by Ragui Assaad

The Egyptian labor market has been both a driving force behind the January 25 Revolution and one of its major casualties. Although the revolution was about lofty ideals, such as dignity and liberty, it was also partially caused by the anger and frustration of increasingly educated but often jobless young people. The economic crisis and dramatic slowdown following the revolution adversely affected the labor market, but the impact was not necessarily felt in terms of increases in open unemployment, but rather in a sharp increase in underemployment – a phenomenon that is most likely to affect the most vulnerable of workers, namely irregular wageworkers and the self-employed. Some workers, such as public sector workers, actually benefited from the revolution, as politicians responded to popular anger by raising their wages and improving their conditions of employment.

Why were the young people so angry?

There was widespread feeling among young people that the Mubarak regime was failing to uphold its part of the social contract that had been the basis of state-society relations in Egypt since Nasser’s time. The terms of this implicit contract, which is often referred to in the political science literature as the ‘authoritarian bargain,’ are that the government guarantees a place in the middle class for those who achieve a minimum level of education (usually upper secondary schooling) by providing them with secure, lifetime jobs in the public sector and with access to subsidized goods and services. In return, the population agrees to a highly restrictive form of political participation and refrains from questioning the State’s authoritarian practices.

Challenging assumptions on the causes of the Arab Spring

Zafris Tzannatos (previously International Labor Organisation, Silatech) offered an array of counter-intuitive arguments challenging mainstream narratives on the causes of the post-2011 Arab uprisings. His presentation entitled ‘Arab youth in the labor market: Mismeasured, misunderstood and mistreated‘ built up the argument that, regionally, employment creation is not a priority:  if it was, we would not have had the Arab Spring. He accused leaders of not being sincere or effective in taking into account job creation as a pathway to increased social justice.

Proclaiming that “It was not the youth, it was the others that created and led the change”, Tzannatos reconfigured arguments surrounding the role of young people as catalysts for the Arab uprisings. In his opinion, the driving forces behind social unrest have been low labor demand and a pervasive lack of social dialogue. Tzannatos argued that democracy is not the only formula for social justice, giving the dysfunctional example of Greece as a warning. “Democracy”, he said, “will not always improve the interface between the citizens and the rulers.”

Future prospects for economic growth in the MENA region

On the second day of the RF’s 18th Annual Conference , we caught up with Omniea Helmy, the Chairperson at a parallel session on Economic Growth in Turkey and the MENA region. Two papers were discussed in the meeting, the first one titled, An Applied Endogenous Growth Model with Human Knowledge Capital Accumulation: Application to Turkish Economy and the second Threshold Effect of Inflation on Growth: Evidence from MENA Region.