A new position paper issued by the Jordanian Labor Watch of the Phenix Center for Economic Studies recommends raising the minimum wage in Jordan to 345 dinars per month in two phases, stressing that this step is not only a necessity to improve workers' standards of living but also an investment in the country's economic and social stability in the long term.
The paper pointed out that the current minimum wage of 260 dinars, which has not been adjusted since 2021 and is planned to be increased to 280 only, will keep large sectors of workers unable to meet the basic needs of their families, especially with the continuous rise in inflation rates.
Raising the minimum wage to a healthy level is a deliberate move to enhance social protection and stimulate economic growth without causing any material harm to employers.
The paper explained that the minimum wage in Jordan, compared to the national average wage of 627 dinars, constitutes only 41% of the average wage, while the International Labor Organization and global best practices recommend a minimum of 55%.
The paper pointed out that the current minimum wage is far from covering the basic needs of workers and their families, especially in light of the high dependency rate in Jordan, where each working person supports at least three members, emphasizing that raising the minimum wage to fair levels would ensure improving the living conditions of many families and reduce the high poverty rates in Jordan.
One of the most prominent justifications for raising the minimum wage is its role in stimulating the national economy by enhancing the purchasing power of workers and increasing domestic demand.
International experience confirms that raising wages boosts the economy by improving domestic consumer demand, which in turn contributes to boosting economic growth rates and supporting the sustainability of small and medium-sized enterprises, which rely on the local market for their sales.
In this context, the paper points out that there is no scientific evidence indicating that raising the minimum wage leads to significant job losses or the bankruptcy of small enterprises, as employers rely on a productive and trained workforce to maintain production levels and competitiveness, making it illogical to lay off employees as a result of increasing wages.
The paper reviewed accurate scientific methodologies to determine the minimum wage, ensuring a balance between the interests of workers and employers, including using the absolute poverty line as a benchmark, which indicates that the minimum wage should be raised to 480 dinars per month to meet basic needs.
The International Labor Organization also recommends setting the minimum at no less than 55% of the average wage, which is equivalent to 345 dinars in the Jordanian case.
The paper pointed out that many countries rely on inflation rates to adjust the minimum wage annually, as this ensures the preservation of the purchasing power of workers.
These methodologies combine rigor and flexibility, making them applicable without causing economic shocks to employers.
The paper emphasized the importance of raising the minimum wage significantly to enhance the economic participation of youth and women, who constitute a large percentage of the population but suffer from high unemployment rates. Studies have shown that low wages are a major barrier to entry into the labor market for these groups, as current wages do not cover the costs of transportation or family care for women, discouraging them from working. The paper warned that improving the minimum wage will stimulate wider participation of youth, which will contribute to reducing unemployment rates and increasing national productivity.
In terms of social protection, the paper emphasized that the minimum wage is an essential base for the support and sustainability of social security systems.
The paper explained that raising wages means increasing workers' contributions to social security systems, which ensures better services for workers and retirees alike.
It also contributes to reducing the phenomenon of the “working poor,” individuals whose wages are insufficient to meet their basic needs, thereby reducing dependence on government support and alleviating pressure on social welfare budgets.
Finally, the paper warned that low wages not only negatively affect individuals and families but are an impediment to social, economic, and political stability.
Improving wages enhances the sense of justice and fairness among citizens, reduces the gap between social classes, and leads to more stable and resilient societies in the face of crises, emphasizing that raising the minimum wage is not just a labor demand but a national necessity to ensure a more just and sustainable future for all.