Raising minimum wage a long overdue, say experts

AMMAN — The Kingdom’s minimum wage, currently set at JD260 for Jordanian workers and at JD230 for foreign workers, is not sufficient to cover basic living expenses amid high inflation rates, according to experts. 

Minister of Industry, Trade, Supply and Labour Yousef Shamali said on Tuesday that the trilateral committee for labour affairs will meet in the upcoming days to study raising the minimum wage, which currently stands at JD260 per month, the Jordan News Agency, Petra, reported. 

His decision came after the Social Security Corporation (SSC) on Monday announced increasing the minimum wage to JD271. 

The SSC cited a 2020 decision by the trilateral committee, which indexes the minimum wage increases for the years 2023, 2024 and 2025 to inflation rates in the preceding 11 months.

The Consumer Price Index (CPI), a measure of inflation, increased by 4.22 per cent during the January-November period of 2022, reaching 106.68 points, according to a monthly report issued by the Department of Statistics (DoS).

Director of the Phenix Centre for Economics and Informatics Studies (PCEIS) Ahmad Awad criticised the government’s failure to abide by its own decision, which was published in the Official Gazette in 2020. 

Not raising the minimum wage will increase poverty rates and deepen social and economic inequalities, which “contradicts one of the pillars of the Economic Modernisation Vision concerned with improving citizens’ quality of life”, he told The Jordan Times. 

Awad added that the current minimum wage in Jordan falls short of living costs. 

“It’s way below the absolute poverty line per household, which stood at JD480 a month, according to pre-pandemic statistics,” he said, noting that this figure has since increased due to the “surge” in inflation rates.  

Economic expert Hosam Ayesh also said that improving living standards and increasing workers’ ability to meet the “basic necessities of a decent life” demands raising the minimum wage. 

Taking into consideration statistics in the household expenditure, income and consumption, as well as the poverty line in Jordan, the minimum wage should be around JD500, he told The Jordan Times. 

However, Ayesh noted that increasing the minimum wage is a “double-edged sword” that can either enhance the Kingdom’s economic growth or simply place greater burdens on companies.

The trilateral committee should take into consideration the entire economic situation when discussing the minimum wage increase, he said. 

“The equation needs to be balanced; increasing the minimum wage must be accompanied by reducing other costs on institutions and companies, which are already dealing with high inflation, interest and taxation rates,” Ayesh added. 

This will contribute to boosting spending, improving living standards and enhancing economic growth, he said.

Ayesh also stressed the need to increase oversight on sectors where workers complain from employers’ lack of adherance to the minimum wage, such as private schools.