New blows to Jordan’s social protection system
By : Ahmed M. Awad
Jordan’s social protection system has recently taken significant hits due to government policies affecting old age, disability, and death insurance for young workers in the private sector, increased fees for private sector medical doctors, and encouraging early retirement for thousands of workers in the Greater Amman Municipality.
These policies negatively impact the components of social protection outlined in the National Social Protection Strategy for 2019-2025, which is currently under review to update it in response to humanitarian crises.
One such policy is the reduction of old age, disability, and death insurance contributions for workers in private sector establishments under the social security system, approved by the Cabinet last week. This will deprive young people under thirty in all economic sectors of some of their insurance benefits, as they will be subjected to a partial insurance system.
This system will hinder the achievement of the first pillar of the National Social Protection Strategy, titled “Opportunity,” which aims to enhance decent work and social security. Despite the government’s justification that this step will increase youth employment by reducing their employment costs, the implementation of this system will weaken the social protection system for young people, reduce their retirement salaries upon reaching retirement age, and create negative discrimination in rights among insured persons, thereby weakening the trust of workers and the community in the social security system.
Additionally, the Greater Amman Municipality has encouraged its employees to take early retirement, which impedes progress towards achieving the same pillar, “Opportunity,” in the strategy. Regardless of the justifications provided, this step threatens labor market stability and the sustainability of the social security system. It will also create numerous risks in the labor market, as early retirees return to the job market, increasing competition for jobs and raising unemployment rates.
Early retirement also leads to lower retirement salaries due to shorter service periods, increasing the number of poor people and deepening social inequality. This approach drains the resources of the Social Security Fund, threatening its ability to meet its commitments to future generations and weakening citizens’ confidence in the sustainability of the social security system.
The third blow to the social protection system was the government’s announcement of a 60% increase in private sector medical doctors’ fees over three years. Although this step may seem positive on the surface, it has significant negative effects on the majority of citizens, especially those with middle and low incomes.
Increasing medical doctors’ fees without addressing its impact on patients and their families will raise healthcare costs in the private sector, depriving wide segments of citizens of their right to access quality healthcare, especially given the ongoing poor quality of public sector healthcare services. With no government plans to increase the minimum wage, economic burdens on a large segment of citizens will grow.
Insurance companies are also expected to raise the prices of health insurance policies to cope with the increase in medical doctors’ fees, leading to a decline in the number of insured people, especially in small and medium-sized companies. Increasing these fees without mitigating the impact on patients and their families will hinder achieving the third pillar of the National Social Protection Strategy, titled “Empowerment,” which focuses on improving social services.
These policies indicate that the government is weakening the economic and social rights system that Jordan has built over the past decades, rather than strengthening it. This is based on the government’s belief that stimulating economic growth can be achieved by weakening labor standards and social protections, but this assumption has not proven successful in any country. It often serves the interests of specific social groups, leading to increased poverty and unemployment and deepening social inequality.
The Jordanian government must reconsider its economic and social policies to ensure that citizens can enjoy their economic and social rights and to strengthen the social protection system to achieve social justice and economic stability, taking into account the strategies it is developing and adopting.
Ahmad Awad is the founder and director of the Phenix Center for Economic Studies, specializes in human rights and socio-economic issues. Advocate for human rights and promoting democracy and civil society at local, Arab, and international levels.