Today, much of the political discourse in Jordan focuses on the importance of the middle class as a stabilizing and reformist force in the country. Viewed as a source of skilled labor with potent purchasing power, the middle class has been variously described as having the entrepreneurial capabilities as well as the democratic tendencies necessary for Jordan’s economic and political development. At the same time, however, the current and future strength of the country’s middle class has been a source of concern for many.
For some time now, politicians and academics in Jordan have argued that the country’s middle class has been in steady decline for the last two decades. Some of the most commonly cited explanations for this drop include Jordan’s 1989 economic crash, the subsequent IMF-led structural adjustment programs promoting free market policies, the retreat of state services and safety nets, declining public sector wages, and the more recent rise in the cost of living. With concerns about Jordan’s middle class continuing to mount, the government committed to expand and protect this vital segment of the population in its 2010 Executive Agenda.
As the country’s middle class had never been rigorously defined or examined, much of these fears developed out of anecdotal evidence lacking in hard data to establish whether and/or how the Jordanian middle class has suffered. Finally, in 2008, the Center for Strategic Studies (CSS) at the University of Jordan took the first steps towards a comprehensive study of the Jordanian middle class, publishing a research paper on economic growth, income distribution, and the middle class. In 2010, the authors of this study partnered with Jordan’s Ministry of Planning and International cooperation to conduct a follow up report, in response to the growing public debate about the deterioration of the country’s middle class.
Both the 2008 and 2010 studies confirmed that Jordan’s middle class has been under substantial pressures over the past decade, as a result of the rising cost of living, removal of state subsidies, introduction of taxes, and the absence of a commensurate rise in wages. At the same time, these reports found that the rise in unproductive sources of income amongst middle class households has eroded the group’s economic and political force. Most importantly, however, the reports’ findings have sparked a new interest in the wellbeing of Jordan’s middle class, moving the debate beyond a mere concern with income levels towards discussions about quality of life. These conversations, in turn, have begun to push Jordan’s policy makers and government officials to recognize the futility of focusing exclusively on the eradication of abject poverty and to appreciate the dire need for protecting, expanding and creating a robust middle class.
Jordan’s Middle Class – A Short History Lesson
The Jordanian middle class expanded as a result of economic growth in the 1970s and 1980s, higher rates of education, an expansion in public sector employment, the growth of the economy’s service sector, and employment-based migration to Gulf countries. Historically, Jordan’s middle class has been comprised of civil servants and professionals such as teachers, lawyers and doctors.
Following a reduction in the country’s public sector and the rise of privatization in the 1990s, the nature of Jordan’s middle class began to change. The civil bureaucrats that had been integral to the class increasingly found their social positions challenged, as the cost of living increased. Simultaneously, as a result of the private sector’s growth, a new breed of middle class began to rise, made up of businessmen, bankers and real estate agents, amongst other private sector professionals. Between 2002 and 2008, the percentage of the population spending between two to four times the official poverty line declined by 10%. Meanwhile, during this period, income distribution between the classes remained unchanged, as all groups within the Jordanian population experienced a downward shift in social mobility.
The Current State of Jordan’s Middle Class
For practical and data related reasons, the 2010 follow up report defined members of the middle class as individuals spending between two to four times the official annual poverty line, i.e. between 1360 to 2720 Jordanian dinars (JOD) annually or between JOD 4 to JOD 7 a day for 2008 [5.6 to 9.8 U.S. dollars (USD) ].
Based on this definition, the 2010 report found that 41.1 percent of Jordanians qualified as members of the middle class. Comprising 32 percent of all urban households, the Jordanian middle classes continue to be dominated by salaried professionals in white-collar jobs who hold some sort of advanced academic degree.
Confirming intuitions about the middle class’ potential economic power, the report found that Jordan’s emerging private sector has been driven by middle and upper middle class professionals working in the finance and business sectors. Despite the high level of education found amongst members of the middle class, the report also found that spending on education has remained severely stratified across Jordanian society, with the most affluent spending twice the amount spent by the middle class and fourteen times more than the poor. These discrepancies largely stem from a trend in favor of private education amongst middle and upper class families, while poorer households are forced to rely on lower quality public education. This stratified educational system suggests that social mobility will remain limited, in light of the specialized degrees required to work in the emerging and well-paying finance, business and IT sectors. As such, unless Jordan’s public education system improves, entering these new “middle class” jobs may well become increasingly difficult even for members of the class.
Finally, the report established the middle class’ growing dependency upon foreign remittances and other unproductive sources of income. Due to the absence of adequate employment opportunities in Jordan, many well-educated members of the middle class have sought jobs abroad, particularly in Gulf countries. Approximately 40 percent of primary income earners working abroad belong to the middle class. At the same time, income from property rentals, others assets and transfers (such as social security and pensions) made up 37 percent of middle class incomes in 2008. Reliance on these unproductive financial sources has created a rentier attitude in Jordan, whereby income is largely disconnected from work, and has undermined those aspects of the country’s middle class that have traditionally been lauded by politicians and policy-makers. As a result of this growth in rentier incomes, the Jordanian middle class’ entrepreneurship, innovation, cultural engagement and political activism have been largely eroded and replaced by increased consumerism amongst group members.
Moving Beyond Poverty
Perhaps the most striking of the report’s findings is that approximately 51 percent of Jordanians actually spend significantly less than the minimum daily middle class income [JOD 4 (USD 5.6) a day], approaching near poverty levels of spending. According to the World Bank’s parameters, the official poverty line for a country is calculated by combining the cost of the minimum caloric intake required for an individual adult with the cost of very basic goods, such as shelter and healthcare. Based upon this framework, the poverty line in Jordan for 2008 was USD 2.6 a day. According to the 2010 report, 13.3 percent of Jordanians spend less than USD 2.6 a day, placing these individuals below the official poverty line. 37.5 percent of Jordanians fall on the threshold between poverty and the middle class (spending less than USD 5.6 a day). With limited asset ownership, at .5 percent of total income, along with low levels of spending, Jordan’s lower and middle class families will be in a particularly precarious situation should the cost of living continue to increase.
By compiling this data on income distribution and expenditure patterns across Jordanian society, the 2010 report provides a deeper understanding of living conditions, the reasons for the middle class’ decline, and the requirements for social mobility. As the report suggests, while the middle class remain largely well educated, the gap created by the deteriorating public education system has been filled by high-priced private education, which few members of the middle class can afford. At the same time, income levels have stagnated while cost of living has increased. This, coupled with the absence of decent employment opportunities, has pushed many to seek employment abroad or to turn to other non-productive sources of income. These factors have combined to push the average living standard of the Jordanian middle class household to at or near poverty levels.
The time has come to move Jordan’s development discourse beyond the arbitrary and meager definition of poverty as minimum caloric-intake and spending power of less than $2 a day. This approach not only reduces quality of life to bare nutritional survival, but also absolves the Jordanian government of taking responsibility for those citizens who are not officially classified as ‘poor’. Furthermore, this inadequate standard contributes to the very deterioration of the middle class that the government has been so keen to prevent. In a country where 51 percent of the population is spending as if they were living in poverty, the exclusive focus on abject poverty measures and distribution of financial handouts to those below the official poverty line has done little to combat the causes of poverty and to strengthen the middle class. As such, it is important to move away from this simplistic definition of poverty, which at times unjustifiably excludes those living above a subsistence level from qualifying as needy.
Some economists have worked to develop a framework, which moves away from such misguided concern with money and income as the basis for calculating standards of living. The government of Bhutan, for example, has linked its economic policies to the concept of Gross National Happiness, which focuses on the level of overall contentment within a society, rather than Gross Domestic Product (GDP), which centers on a country’s economic productivity. In 2008, the Sarkozy Commission, led by Nobel-prize winning economists Joseph Stiglitz and Amartya Sen, developed a detailed measure of French quality of life based on indicators as varied as marital status, health and perceptions of government corruption. While finding measures for the “good life” may be a challenging task, this much-needed work is a reminder of the complex considerations involved in improving human welfare. And while the details remain to be hammered out, for Jordan this new approach would seem to demand that government decision-makers move beyond a focus on poverty reduction, in terms of income levels alone, and work to increase individual access to quality healthcare, education and employment, among other things.
The vulnerability of almost 51 percent of Jordanians, the shortcomings of the country’s public educational system and the increasing middle class reliance on migration and remittances make it clear that the future of the Jordanian middle class depends upon improving and investing in education and job creation. This is no easy feat for any government and will take some time to accomplish. Nonetheless, the dialogue has begun, including debates on the elements necessary to achieving adequate living standards in Jordan and the policy measures needed to reach these goals. While these discussions continue, what remains immediately clear is that sooner rather than later policy makers and government officials alike must be held responsible for satisfying more than a individual’s minimum caloric requirements. Rather, for the future health of the country and its important middle class sector, these individuals must come to embrace the people’s social and economic rights to education, quality social services and adequate opportunities for employment.
*Yasmeen Tabbaa has been a social policy analyst and monitoring and evaluation consultant in the Middle East since 2007, with a particular focus on Jordanian political economy. She is the co-author of the two reports referenced in this article: Economic Growth, Income Distribution and the Middle Class in Jordan 2002-2006 (2008) and Assessing the Middle Class in Jordan (2008): Trends in Income and Expenditure (2010).