Unionist, private sector leaders at odds over possible minimum wage raise

AMMAN — The government’s recent statement on the possibility of raising the minimum wage has elicited different views among stakeholders, with labour unions commending the move and the private sector warning of its consequences.

At a recent meeting with members of the Lower House Financial Committee, Labour Minister Nidal Katamine said the raise of the current wage, JD190, may vary from one profession to another, and may be higher for female workers with lower employment rates.

Over the past two years, the General Federation of Jordanian Trade Unions has been calling for increasing the minimum wage to JD300, according to its president, Mazen Maaytah.

“Our concern as representatives of some 750,000 workers is to bridge the gap between the minimum wage and the poverty line,” he said, noting that increasing the minimum wage will ultimately increase workers’ purchasing power and motivate the economy.

The national annual poverty line for 2010 was set at JD813.7 per individual. 

He commended the government’s “understanding” of the situation. However, representatives of private employers claim such a move will have harmful effects, such as increasing costs, hindering investments and decreasing competitiveness of local products.

Jordan Chamber of Commerce President Nael Kabariti said any suggestions to raise the minimum wage must be supported by economic studies that examine the consequences of such a decision.

According to international agreements that Jordan has signed, the minimum wage must apply to all workers in the Kingdom, without any discrimination based on their nationalities.

“We are not with or against raising the minimum wage,” Kabariti told The Jordan Times, adding that it is unlikely that most Jordanian families would pay the suggested amount of JD300 per month to domestic helpers or to guest workers in unregulated fields.

He explained that employees are required to pay an additional 20 per cent of the salary as social security subscription, which would increase the monthly payments to JD360 per worker. 

Kabariti added that the majority of workers in commerce are Jordanians who receive monthly salaries starting at JD300.

Increasing minimum wages will send wrong messages about the performance of the Jordanian economy and increase inflation rates, according to Jordan Chamber of Industry Director Maher Mahrouq.

He said such a move is “currently unnecessary”, citing official figures that the average monthly salary for workers in the industry sector is JD467.

“Jordanian workers will not benefit much from increasing the minimum wage,” Mahrouq added, noting that guest workers at the Qualifying Industrial Zone receive extra incentives on top of their minimum wage salaries.    

The sector leader said minimum wages in Jordan are higher than wages in other “better economically faring” countries in the region.

Officials at the Labour Ministry were not available for comment despite several attempts by The Jordan Times.