Minimum Wage Compliance in the Private Sector: The Case of Wage and Salary Workers in Jordan

Ibrahim Alhawarin, Fuad Kreishan

Abstract


The study is concerned with the characteristics of wage and salary workers earning below the minimum wage (MW) in the private sector in Jordan. This study gives considerable cause for concern as we find that MW regulations are noticeably violated by employers. About 16.5% of the workers in the private sector receive wages below the prevailing MW rate, whilst measures of the depth of shortfall (MW-gap) is around 27% (about 41 JD). Unsurprisingly, the study finds that the measures of violation are more acute among informal occupations (about 27%). However, earning below MW tends to be a phenomenon not only in informal sector; rather it extends beyond that to formal activities (almost 6%). In general, female, younger, less educated workers and those employed in micro and small firms are more likely to earn below the applicable MW rate. The study applies descriptive methods and logistic regression in analyzing the data, which was obtained from the first wave of JLMPS (2010).


Keywords


Minimum wage violation, informal sector, wage and salary workers

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