jordan pulse -

To begin, we must take a comprehensive view of the issue, one that considers its historical context and connection to various factors such as the purchasing power of the Jordanian dinar, the persistent inflation over the years, and consumer spending, as well as how wages align with these dynamics.

When we look at Jordan from a broader perspective, we see a country limited in resources and revenue, with state income barely covering expenditures. This makes rapid developmental planning difficult. In the absence of external funding or grants for specific projects, capital allocations for long-term initiatives will be challenging.

From an internal standpoint, Jordan has faced inflation for over 20 years, driven by geopolitical factors such as wars and civil and military conflicts in neighboring countries. Jordan, situated in a politically unstable region, has absorbed waves of refugees, leading to a short-term injection of money that increased demand, reduced supply, and contributed to rising prices. This resulted in a stronger dinar but lower purchasing power for the same nominal value.

All of this occurred without sufficient intervention from policymakers—whether in government, the central bank, or other state institutions—to balance currency strength, regulate markets, and gradually raise the minimum wage every three years at a minimum.

The key question here is: Who bears the cost of raising the minimum wage? Clearly, the state benefits first, followed by the worker (wage earner), as the state already pays wages above the minimum, and the worker would receive a higher salary than before. However, the private sector will be most affected, especially if the government does not introduce policies to ease operational costs. Without such measures, this wage increase could disproportionately impact the private sector, leading to imbalances rather than equitable growth.

For instance, a factory employing 20 workers at 300 dinars each would face an increase in monthly expenses from 5,200 dinars to 6,000 dinars, with an annual difference of 9,600 dinars. This is no small amount for the private sector, especially in the current economic and geopolitical climate, where most private companies see expenses equaling or even exceeding revenues due to high operational costs and the lack of real, tangible government support for achieving societal fairness.

The solution lies in easing bureaucratic obstacles for the private sector and reducing financial and administrative burdens on specific businesses based on their needs, whether commercial or industrial. Economic enterprises vary in strength, and a one-size-fits-all approach harms more than it helps. Social balance is key to ensuring the sustainability of Jordan's market, its economic strength, and encouraging investment. Businesses should be categorized by their financial capacity, with obligations imposed accordingly, rather than uniformly across the board. Flexible regulations should allow decision-makers to impose reasonable commitments on both the private sector and consumers. This approach can be broadly applied to the current situation as a whole.

"Solutions and progress remain theoretical unless they see the light of practical, tangible application."

Written by Human Rights and Political Activist Abdullah Al-Zoubi