UPDATE 2-Moroccan gov't to raise minimum wage, unions to keep pushing

Wed Apr 30, 2014 5:19pm EDT

Related Topics

* Government to raise minimum wage 10 pct

* Employers group denounces decision

* Pension system reform remains main dispute (Add Employment minister comments, background)

By Aziz El Yaakoubi

RABAT, April 30 (Reuters) - Morocco has agreed to increase the minimum wage by 10 percent in 2014 and 2015, a government spokesman said on Wednesday, as authorities seek to counter labour union protests against austerity measures such as subsidy cuts and pension system reforms.

Mustapha Khalfi, who is both communication minister and government spokesman, said the decision had been taken but he did not provide details.

Moroccan Minister of Employment and Social Affairs Abdeslam Seddiki later said on State television channel RTM that details of a deal agreed with labour unions for the private sector included a 5 percent rise at the start of July 2014, followed by another 5 percent in July 2015 and an expansion of healthcare benefits. Minimum wages in the public sector would reach 3000 dirhams (US$370) in next July.

"The decision will cost the government an annual 14 billion to 19 billion dirhams," Seddiki said.

Morocco's three largest labour unions agreed in January to join forces and organize protests against cuts in subsidies and pension reforms demanded by the government's international lenders such as the International Monetary Fund.

The North African kingdom is under pressure to cut public spending among other reforms to repair its finances, which have been hit by the 2011 Arab Spring revolts across the region, the euro crisis and drought.

PENSION REFORM COSTS

Miloudi Moukharik, leader of the biggest Moroccan Labour Union (UMT) told Reuters that workers are not satisfied with the decision but at least it would keep talks ongoing.

"Employers took part of the meetings and they categorically refused the government's decision," Moukharik said.

A statement from the country's biggest employers group (CGEM) said the decision would erode the competitiveness of Moroccan companies.

Moroccan industry is loosing around 30,000 jobs every year because of higher costs, employers said in the statement.

"After May Day, we will keep talking about the pension reform and other issues such as the strike laws. We have been the first to want reforms, but it is to the government to support the costs as workers do not have to pay for the mangers faults," he added.

The government's plans to reform public sector pension funds put reform costs at more than 5 billion dirhams during an initial phase and workers would also contribute more.

It is also seeking to increase the retirement age and expand the calculation base for pensions, as part of its drive to overhaul the pension system.

The deficit of the Moroccan Pension Fund (CMR) for public sector workers is currently on track to reach 1.28 billion dirhams ($151 million) in 2014, 24.85 billion dirhams in 2021 and 45.66 billion dirhams in 2030, Prime Minister Abdelilah Benkirane said last year in announcing reforms.

Moroccan unions won $5 billion in salary increases over three years since the 2011 "Arab Spring"-style protests in the North African state, where the Arab world's longest-serving dynasty is still in power.

The Islamist-led government expects the budget deficit to fall to 4.9 pct of gross domestic product (GDP) in 2014 after it hit 7.3 percent in 2012, and 5.4 percent in 2013 after an initial budget squeeze. ($1 = 8.1115 Moroccan Dirhams) (Reporting by Aziz El Yaakoubi; Editing by Patrick Markey, Sonya Hepinstall, Toni Reinhold)

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