Jordan Economic Forum Advocates Balanced Approach to Minimum Wage Increase

Amman - The Jordan Economic Forum underlined that raising the minimum wage, currently set at JD260, is essential for improving the standard of living for lower-income groups in the Kingdom.اضافة اعلان

In a position paper released Tuesday, the forum highlighted the need for balanced measures to ensure the increase enhances social justice and reduces income disparities. The paper recommended targeted support for small and medium-sized enterprises (SMEs) to help them adapt to the wage hike, thereby protecting jobs and minimizing any potential negative impact on employment rates.

"Small and medium-sized enterprises, which heavily rely on low-wage labor, play a critical role in Jordan’s economy, providing substantial employment opportunities," the forum noted, emphasizing the importance of safeguarding these businesses amid economic adjustments.

The forum also urged a gradual approach to raising the minimum wage in line with inflation rates, which would prevent undue pressure on local market prices. It emphasized that gradual increases would allow for periodic assessments of the economic impact, ensuring alignment with current conditions and the financial capacity of employers to handle cost increases.

Regarding the impact on the local workforce, the forum underscored the necessity of preventing the replacement of Jordanian workers with non-Jordanians, especially in sectors heavily dependent on unskilled labor. It recommended implementing policies that incentivize employers to hire local workers and discourage reliance on foreign labor, thus fostering greater Jordanian participation in the labor market.

Additionally, the forum stressed that the minimum wage should cover a broad segment of workers to effectively reduce poverty and improve income distribution. It called for regular updates to the minimum wage to account for living cost increases and protect the wage’s impact on supporting lower-income groups.

Mazen Hamoud, Head of the Jordan Economic Forum, described the decision to increase the minimum wage as a "step in the right direction," underscoring the importance of balanced policies that support social justice while preserving labor market stability. Hamoud highlighted that the forum’s recommendations aim to improve income levels while protecting job opportunities, ensuring long-term economic benefits.

Furthermore, he reiterated the need for gradual wage adjustments aligned with inflation, alongside bolstering SMEs to maintain an economic equilibrium and avoid unforeseen consequences.

In a statement, Baraa Dumaisi, Head of the Forum’s Studies Department, explained that the recommendations were based on comprehensive analyses of local economic conditions and assessments of the sectors most affected by the wage increase.

Dumaisi added that the research involved detailed data analysis from various national institutions, as well as an examination of relevant international experiences to identify optimal standards tailored to Jordan’s economic and social landscape.

She emphasized that the recommendations reflect the forum’s vision of fostering economic policies that create quality job opportunities and stimulate local investments, thereby enhancing social justice and comprehensive development.