AMMAN — Director of Labor Relations at the Ministry of Labor Adnan Al-Dahamsheh said that the issue of raising the minimum wage is linked to inflation rates and that if any increase is approved for this year, it will be too small to make a difference.
Dahamsheh told Jordan News that raising the minimum wage was postponed due to the current circumstances, brought about by the COVID-19 pandemic, adding that increases might be expected in 2023, as “we monitor the economic conditions and approve the increase accordingly”.
He said that it is illogical to raise the wages by JD2–3, as employees will not notice the increase and it would make no difference, “but, at the same time, it could harm employers who may decide to dismiss some employees as the prevailing hard economic conditions do not allow for any more costs”.
Hamada Abu Nijmeh, head of the Workers’ House, told Jordan News that it will be in nobody’s interest to postpone raising the minimum wage, “neither at the social level, in reducing poverty and unemployment and their impacts, nor at the economic level, in limiting the decline in growth and the weak competitiveness of economic projects and the demand for investment”.
Abu Nijmeh added that the government is responsible for compensating citizens, protecting them from poverty, addressing unemployment and economic participation rates, and the citizens' purchasing power, all matters that “negatively affect the economic sectors and exacerbate the problem of low economic growth”.
He added that the concerned authorities should study all the effects of the pandemic and assess the amount required to raise the minimum wage and its impacts on economic indicators such as prices, employment opportunities, unemployment, poverty, competitiveness, and growth rates.
“It must be based on a number of main economic indicators in this field, most notably, the increase in inflation, the wage index, the cost of living index, poverty levels, and the disparity in the wage structure between the public and private sectors,” Abu Nijmeh said.
Ahmad Awad, head of the Jordan Labor Watch, told Jordan News that two main criteria must be taken into account in order to raise the minimum wage: families’ poverty levels and dependency rate.
Awad added that based on these two criteria, the minimum wage should be between JD400 and JD480, “in order for an individual to meet his and his family members’ basic needs”.
He said that the minimum wage is one of the tools governments use to regulate wage policies to ensure that wage levels make possible a decent life for workers and their families, and fight poverty, in addition to being a tool for government intervention to stimulate domestic demand for consumption as one of the engines of economic growth.
He also said that the agreement the parties at the Tripartite Committee for Labor Affairs reached not to raise the minimum wage this year “will deepen poverty levels, on the one hand, and weaken the chances of reviving the economy, on the other”.
Economist Hussam Ayesh told Jordan News that raising the minimum wage would help increase the purchasing power of citizens and thus move the economic wheel, which has become a necessity, especially in light of the difficult economic conditions.
Ayesh added that such raise provides protection to citizens and “constitutes a kind of justice for them”, and stressed the need to have “another evaluation of the raise that depends on the performance and production ratio of employees, as this will give them greater motivation to produce".