A Diamond’s Eye View of the World

a multi-faceted look at the middle east, and the middle west

minimum-ally minimum: Jordanian textile workers’ new minimum wage

Posted by adiamondinsunlight on January 4, 2007

MENAFN has reprinted an article from the Jordan Times about the effectuation of last summer’s new minimum wage requirements, whose implementation in the country’s textile industry-focused QIZs was delayed six (or seven) months:

Minimum wage law comes into effect in textile industry – Jordan

(MENAFN – Jordan Times) AMMAN — Textile factories in the country will now have to pay their employees a JD110 monthly salary after the minimum wage law in this sector came into effect on January 1, Labour Minister Bassem Salem said on Tuesday.

“All factories across the Kingdom were informed about the raise. We expect them to respect the law or else face the consequences. The Labour Ministry is very serious about enforcing the law,” Salem told The Jordan Times, vowing to “punish violators.”

In June last year, the government raised the minimum wage from JD95 to 110 for all industries, but gave textile factories a grace period of six months.

The government said it wanted to give investors in the special economic zones enough time to adapt to the new wage system.

The minister said the factories were given enough time to prepare themselves for the new situation and must now respect the law.

Trade union leaders said the law would help thousands of families overcome financial difficulties, insisting that implementation was important.

“We hope that the government will force factories to implement the law. But I am pessimistic about it,” said Fathallah Emrani, president of the General Trade Union of Workers in Textile Industries.

The Labour Ministry should notify each and every company in the Kingdom about the law.

“The law must be made public through the local press and direct letters to all textile factories, because we are facing legal and logistical problems. Some factories claim they have not heard about the law,” he noted.

According to union figures, at least 27,000 Jordanian families and 38,000 foreigners would benefit from the raise.

A special committee tasked with studying workers’ salaries introduced the raise to support the workforce, which is facing a high cost of living and harsh economic conditions. The committee is comprised of officials representing the private and public sectors as well as labour leaders.

In May last year a report by the US National Labour Committee severely criticised violations of workers’ rights in some of the country’s Qualifying Industrial Zones.

The report claimed that tens of thousands of foreign labourers working in the zones were stripped of their passports, trapped in involuntary servitude and forced to work without sleep.

Reacting to the accusations, the government intensified inspection campaigns of the factories and several factories were shut down while others were given warnings.

But Emrani believes legal problems on payment of the minimum wage will always exist.

Companies’ methods of violating the law vary between including food and transportation in the monthly salary, extra working hours and delayed payments, according to him.

“We are aware of their methods, but we will do our best to protect workers’ rights,” Emrani told The Jordan Times.

Economists believe it was the right time for the government to enforce the increase to make up for the rise in the cost of living.

The JD15 increase in the minimum wage, however, falls short of what workers had in mind.
Pressured by ongoing increases in prices of basic commodities and recent fuel prices hikes, the General Federation of Trade Unions petitioned the government earlier last year to raise the mandatory minimum wage to JD130 per month.

Labour unions believe the minimum wage is one of the most effective tools to encourage Jordanians to replace an army of almost one million guest workers engaged in low-paid blue-collar jobs shunned by most citizens.

The Minimum Wage Law went into effect in late 1999, setting the minimum wage at JD80. It was increased by JD5 on January 1, 2003, and by another JD10 in 2005.

OandA lists the current conversion rate as 1 JD = 1.42 USD. The new 110 JD monthly minimum wage is $156.25. Obviously, it represents an improvement from the previous 95 JD minimum, and the raise sets a precedent for future raises, but … none of this is meaningful to Jordan’s textile and other minimum wage workers if the minimum is honored more in the breach than the observance.

The situation is particularly acute for textile workers, because most of these work in Jordan’s QIZs, the Qualifying Industrial Zones set up in partnership with the United States. Goods produced or transformed in some value-added way in the QIZs are allowed to enter the United States at preferential tariff rates. The catch is that these goods must have a certain minimum Jordan-produced component, as well as a certain minimum … Israel-produced component.

This second requirement has made QIZ companies politically risky ventures. While the institution has brought some economic benefits to Jordan, the current list of QIZ companies focuses heavily on clothing production, with raw textiles brought to Jordan and finished there, with buttons, threads, or more sophisticated finishing elements brought from Israel.

QIZ companies have tended to hire either poor, unskilled Jordanians or – increasingly – TCNs, third country nationals with no rights and few advocates for their welfare. Taking a lesson from the harsh conditions under which unskilled laborers … labor … in the Gulf states, some QIZ companies have been faulted for confiscating their employees’ passports, garnisheeing their wages for phantom expenses or not paying them at all, under-feeding them, and housing them in squalorous dormitories. (Jordanian officials and QIZ employers have protested that the international attention given these workers’ conditions in the past sixteen months has focused on a few scofflaws, though more rhetoric than evidence has been offered in support of their position.) Regardless, I see the delay of the implementation of the new minimum wage as continued evidence of the QIZs ‘special’ status. The government is unwilling to risk angering QIZ employers, fearing that the changing global textile market may encourage those unhappy with Jordan’s governance to relocate elsewhere.

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My friend Marwan has done extensive work on the QIZs and their economic contribution to the Jordanian economy (and economic infrastructure). One of his many papers, The Institutional Dimension of the Success of Jordanian QIZs, was written for the World Bank, is available online through the Bank’s website in pdf format. The paper is long, but well worth reading.

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