JSF paper sheds light on public sector wages

AMMAN — Wages and salaries in Jordan constitute a large proportion of total public spending, higher than in other countries with similar income and development, according to the Jordan Strategy Forum (JSF).

Jordan spends 48.3 per cent of the total public expenditure on the wages of public sector employees and military personnel. This ratio implies that while it is not easy to address in the short-term, there is a structural problem in public spending items, the JSF said in paper issued on Tuesday.

Jordan’s wage share in public spending is higher than in countries like Morocco, the UAE and Turkey, according to the paper.

The existing high wage bill, and its associated low efficiency, indicate that the expansion in this spending item would only exacerbate the hitherto existing economic challenges. In addition, and within the context of the 2.1 per cent modest economic rate in 2021, forecast by the International Monetary Fund, there does not seem to be a solution to this problem on the horizon, the JSF observed.

In future years, the government should consider how much it spends on the compensation of employees and adopt remedial measures, the JSF said.

A high wage bill does not necessarily reflect a high standard of living. It only means that wages are distributed among a large number of public sector employees. While this observation indicates that there is a structural problem in public spending, clear objectives should be set to limit the expansion of the wages on one hand, and enhance the effectiveness of public spending, on the other, according to the JSF paper.