Minimum wage falls short of living costs — experts

AMMAN — Working two jobs for approximately 80 hours a week is still not enough for Ammar, a 25-year-old college graduate, to support his family’s expenses amidst the harsh economic conditions in Jordan.

“I am now the only provider for my family, my father retired a couple years ago after I graduated from university and my two sisters are still in school, with one in college,” Ammar told The Jordan Times in a recent interview. 

An accounting graduate, Ammar said that he works two jobs because “one job’s salary is barely enough to pay rent”, noting that the minimum wage does not cover the basic costs of living in Jordan.

“The minimum wage in Jordan would not be enough for a single man or woman to support themselves, let alone support a family. Most companies in Jordan do not pay more than the minimum wage, especially for fresh graduates with no experience,” he added.

Ammar said that employers “exploit” young people because they know they need experience and money. “It is really difficult to find a decent job related to one’s major with an actual decent payment, not even a high payment, especially after the pandemic,” he continued.

Juggling between the two jobs is mentally and physically exhausting, Ammar said, noting that he does not have time for himself, his family or his friends.

“When the weekend comes, I cannot do anything but sleep, even if I need to run errands, it is really difficult because I am so tired,” he said.

The General Federation of Jordanian Trade Unions (GFJTU) on Saturday called for increasing the minimum wage and tying it to inflation rates, stressing the need for the Labour Law to ensure job security and stability, as well as tightly controlled layoffs, according to statement by the GFJTU.

The minimum wage is currently set at JD260 for Jordanian workers.  In January of this year, the Tripartite Labour Committee decided to postpone the planned minimum wage increase for 2022 until next year due to the impact of the COVID pandemic crisis, according to the Labour Ministry.

As for non-Jordanian workers, the minimum wage stands at JD230. 

During a conference of trade unions, attended by representatives from the 17 trade unions, the Ministry of Labour, international organisations and civil society institutions also called for providing health insurance coverage for retirees and subscribers registered with the Social Security Corporation, especially for uninsured employees, the GFJTU statement said.

Ahmad Awad, director of the Phenix Centre for Economics and Informatics Studies (PCEIS), agreed with the GFJTU’s demand, describing it as an “utmost necessity nowadays”.

“Increasing the minimum wage is an absolute necessity in order to enhance social protection for workers in the private sector, as the vast majority of employees’ salaries in the private sector are below the poverty line and the minimum wage only reaches half the poverty line,” Awad told The Jordan Times in a recent interview. 

Awad said that income raises will also increase people’s purchasing power, thus increasing the aggregate demand, which is an essential component to stimulate the economy and economic growth rates.

He said that one of the main reasons for unemployment is many graduates’ “shock” when they first enter the labour market only to find “such low wages with long working hours, especially for women”.

“Raising the minimum wage will encourage the youth, men and women to engage more in the labour market, which would help decrease unemployment rates,” Awad continued.

Economist Wajdi Makhamreh said that raising the minimum wage “is crucial” in light of the high living costs and the inflation rates Jordan faces, as the minimum wage is “not logical and is no longer appropriate”.

“The minimum wage must be at least doubled to be suitable for workers and suitable for the economic conditions in Jordan amid the expensive rents, rising food prices and energy costs and more, as it is not enough to cover these costs now,” Makhamreh told The Jordan Times.

Makhamreh recommended raising the minimum wage in some sectors that do not attract Jordanian labour, such as building and construction, which are primarily occupied by foreign workers.

“Raising wages will encourage Jordanian workers to work in these sectors. It is also necessary to obligate the private sector to abide by the minimum wage so that there is no exploitation of foreign labour,” he added.