The situation of the Jordanian labor market is degraded, characterized by massive unemployment which reached a record level, around 25%, during the pandemic whose impacts on the country remain profound.
It affects the population unequally according to gender:
– 20.6% of men are unemployed compared to 31.7% of women
– the generation: unemployment concerns 47.2% of 15-24 year olds
– and the governorates. The governorate of Mafraq in the North recorded the highest unemployment rate in Q4 2022 at 27%, while in Amman it was the lowest at 21%.
The labor market is also marked by low participation, estimated at 33%, particularly among women (13.7%).
By way of comparison, the average in the MENA region is around 45% (70% for men and 18% for women).
Low pay levels fuel brain drain and informal employment. The minimum wage is set at 367 USD, an amount almost twice lower than the absolute poverty line per household which was defined at 677 USD per month before the pandemic.
In view of the Jordanian cost of living, the levels of remuneration push a large part of the active population to migrate or to combine jobs, particularly in the informal economy.
Employment faces major and growing structural challenges.
The sluggish growth for several years coupled with the low growth/employment elasticity make the equation difficult to solve. Growth, when it is high, is not enough to significantly reduce unemployment. The sectors that contribute the most are often not providers of quality jobs.
The multiple segmentation of the labor market (public/private, formal/informal, Jordanians/workers or migrants/refugees) as well as the mismatch between training and labor market needs prevent an optimal allocation of human capital.
The Jordanian authorities are dealing with the emergency but are unable to sustainably reform a structurally failing labor market.
At the height of the pandemic, variations in the wage bill were strictly regulated and several programs made it possible to guarantee wages for formal jobs. More structural reforms have been initiated, particularly within the framework of the IMF programme, such as amendments to the labor law, but their effects are not yet measurable.
The objectives of these amendments are to create a safer professional environment for women (fight against harassment at work, for example) and better regulate the employment of foreign workers. Efforts are also made to allow increased formalization of work.
Critical public sector reform is making too little progress so far due to its sensitivity.
Source Embassy of France in Jordan