Minimum and Living Wages in Jordan and Tunisia

Caroline Krafft and Cyrine Hannafi

Countries around the world are working to develop social protection floors to help reduce poverty. Ensuring workers can earn adequate wages is an important component of social protection floors. In this paper, we explore who receives minimum, poverty, median, and living wages in Jordan and Tunisia, as well as estimating the wage gaps between what workers earn and these wages. We demonstrate that while the majority of workers do earn at least minimum and poverty wages, only a minority of workers earn a living wage. The chances of earning minimum, poverty, median, and living wages depend on the characteristics of workplaces, specific work characteristics (especially job formality and skills required), and the demographic characteristics of workers. These findings highlight which workers are vulnerable to low earnings and where greater enforcement of minimum wage legislation might be needed. Furthermore, we use our results to simulate a number of social protection floor policy options, from universal basic income to more targeted transfers. We demonstrate that most of these policies are not fiscally viable; they would require far more social assistance spending than is currently undertaken in Jordan and Tunisia.

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