Tamkeen Observatory calls for review of minimum wage in response to rising cost of living

AMMAN — As inflation continues to reshape household budgets and strain the financial stability of Jordanian families, the debate over fair wages and their alignment with the rising cost of living has intensified as labour rights activists and advocates are now calling for a reevaluation of Jordan’s minimum wage policies.

The Social Protection Observatory at Tamkeen has recently reignited the critical dialogue, urging a comprehensive review of minimum wage laws. 

The Observatory stressed that wage policies must not only reflect economic data but also address the daily struggles of the country’s workforce.

In a statement to The Jordan Times, the Observatory highlighted that inflation rates in Jordan stood at 4.23 per cent in 2022, and 2.08 per cent in 2023, and are expected to reach 2 per cent in 2024. 

Based on these trends, the Observatory has recommended an 8 per cent cumulative wage increase, amounting to a JD20 raise, which would bring the minimum wage to JD280 starting in early 2025. 

The Observatory also said that relying solely on inflation rates is insufficient, calling for wages to be adjusted to reflect the actual cost of living, including essential expenses for food, housing, transportation, healthcare, and education.

A position paper released by the Observatory, titled “Bare Minimum 2: The Minimum Wage in Jordan,” estimates the monthly living costs for a family of four at approximately JD1,843 (excluding rent), or JD520 per individual. 

Rental costs for a small apartment are typically between JD200 and JD300.

The Observatory also stressed that establishing a fair minimum wage is a "fundamental policy tool" for ensuring a decent standard of living for workers. 

It also cited international practices, such as the “basket of goods” approach, which takes into account essential needs like housing, food, education, transportation, and healthcare when calculating minimum wages. 

The paper also questioned whether the current minimum wage of JD260—or even the proposed increase to JD280—would be sufficient to cover these necessities amid rising living costs.

The study also called for the minimum wage to be aligned with international standards, recommending it be set at 55 per cent of the national average wage, which would amount to JD345. 

It also highlighted the economic and social benefits of higher wages, such as increased workforce participation by youth and women, stronger social security systems, and greater social stability.

Ahmad Awad, founder and director of the Phenix Centre for Economic and Informatics Studies, said that the Jordan Labour Observatory at the Phenix Center has recommended increasing the minimum wage to JD345 per month in two phases. 

He stressed that the increase is crucial for improving workers' living standards and ensuring economic and social stability.

Awad also pointed out that the current minimum wage of JD260, last adjusted in 2021, is inadequate in light of rising inflation. 

He also stressed that a fair minimum wage would boost social protection, increase purchasing power, drive local economic demand, and reduce poverty—without causing significant harm to employers or leading to job losses.

Hanan Tawfiq, a retail worker in Amman, told The Jordan Times, “It is truly hard to make ends meet with only JD260 per month. Rent and basic groceries take up most of the salary. A slight raise would help, but it won’t solve the problem.”

Mohammad Obeidat, a delivery driver, said, “Inflation is eating into our incomes. Now, if you have JD50 in your hand, it feels like nothing.” 

He added, “We do need incomes that reflect the true cost of living in Jordan.”