Jordan’s Public Sector Employees Enjoy Higher Wage Increases

Published October 2nd, 2019 - 08:30 GMT
Labour productivity must be increased.
Labour productivity must be increased. (Shutterstock)
The wages of the public sector saw a higher increase than the private sector

Salaried individuals in Jordan constitute about 87 per cent of the total workforce, the Jordan Strategic Forum (JSF), said, citing the Department of Statistics’ 2018 figures.

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While the overall nominal monthly wage index increased from 100 points in 2010 to 126.0 points in 2017, the wages of the public sector saw a higher increase than the private sector, the JSF said in a report. 

While the public sector’s wage index increased to 136.8 points, the private sector’s wage index increased to 119.9 points. 

The JSF also noted that wages in the private sector have not kept up with the increase in the cost of living. While the public sector’s mean monthly real wage index increased from 100 points in 2010 to 110.3 points in 2015, and to 114.6 points by the end of 2017, those in the mean real wage index of the private sector, on the other hand, only increased from 100 points in 2010 to 100.5 points in 2017.

This comparison does not take into consideration the wage levels in the public and private sectors.

The public sectors that enjoyed the largest real wage increases are mining and quarrying, transportation and storage, wholesale and retail and water supply, while the private sector’s highest real wage increases are in water supply, real estate, arts and entertainment and other service sectors, the report said.

Public sector employees enjoyed much higher wage increases than their counterparts in the private sector, the report said, adding that wage dynamics (changes) are determined by labour productivity, and factors such as labour supply. 

Greater supply of labour in some sectors limits wage increases and weakens the negotiating strength of such labour, the report said. 

Transportation and storage, wholesale and retail, mining and quarrying, construction, manufacturing, professional, scientific and technical services, and the information communication sector are the largest private sector employers, and witnessed real wage decreases, the JSF said.

Conference Board labour productivity measures, published by the JSF, show labour productivity in Jordan was equal to -1.0 per cent (2010-2017), -1.4 per cent in 2017 and -0.2 per cent in 2018.

To improve real wages, the report said, labour productivity must be increased. This can be accomplished through more capital spending and improving the quality of human capital, the JSF said.

Based on the Central Bank of Jordan’s published data, during the past few years, labour wages have stabilised, remaining around 34 per cent to 35 per cent of GDP, implying that while this number remains constant, it is being distributed among a larger number of employees, indicating an excess supply of labour, and hence, lower labour productivity, the JSF report observed.

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