Beyond Rentierism: the building blocks of the workfair state

July/2010

Outline• From rentierism to workfair.

•Status quo of labor market.

• Challenges.

• From short-term measures to a national strategy for employment.

• The Role of Amman Municipality.

• From rentierism to workfair.

• Macro-economy

• Micro-economy.

• Political dimension

• Social dimension.

4

0 10 20 30 40 50 60 70 80 90 100

Jordan

Egypt

Salvador

MENA

Morocco

Guatemala

Sri Lanka

South Asia

Syria

Europe & Middle Asia

JamaicaLatin America & Caribbean

Philippines

Paraguay

Eُast Asia & Pacific

Employed Unemployed Not in the labor market.

33 percent 6 percent

Labor market conditions are not in favor of SSC’s financial position

Status Quo of Labor Market

Female Employed Persons to Manpower

Male Employed Persons to Manpower Country

12%64%Jordan

39%89%Syria

29%84%Morocco

30%78%Tunisia

22%77%Egypt

* Data, 2005

Status Quo of Labor Market

Distribution of Inactives:

• Housewives, (50%).

• Students,(30%).

• Early Pensioners, (20%).

Status Quo of Labor Market

Non-Jordanian Workers:

• Around (420) thousands are non-Jordanian workers – MOL Estimations.

• Two times this number are unemployed Jordanians.

• The above two groups are similar in terms of age and education.

Status Quo of Labor Market

8

5 Insured Persons

1Pensioner

1Insured Person

1Pensioner

• Demographic changes accompanied by: – Early retirement pension prevails over other pensions. – Decrease in fertility & mortality rates. – Conditions of the labor market.

Challenges

Challenge:

• Increase in jobs created from (50) thousands to (100) thousands.

• Increase Jordanians’ share in jobs created from 50% to (85%) in 2020, and (95%) in 2030.

• Increase in the share of Jordanians in the labor force.

Challenges

% of Employed

to work force

Employed Persons (Million)

Work force(Million)

Expected Population (Million)

Year

33%1.03.06.02010

45%2.04.47.52020

50%3.06.09.02030

Challenges

• Short-terms & unsustainable measures: 1. Employ Jordanians in the public sector

for Jordanians.

2. Reliance on non-Jordanian workers in the private sector.

3. Encourage exporting qualified workers to Arab Countries.

From short-term solutions to a national strategy for employment

• Towards a national strategy for employment:First: Legal Frame.

1. Labor Law: stabilizing labor market, protecting workers.

2. Social Security Law: Extending coverage, new insurances.

3. Health Insurance.

Second: Investment Policies & Economic Development:

1. Focus on added-value in investment promotion policies.

2. Make profits generated from speculations in stock market and real estate market subject to taxes.

3. Encourage efficient, labor intensive sectors.

From short-term solutions to a national strategy for employment

Third: Education Policies:

1. Matching between the outcomes of the educational sector and labor market (number & majors).

2. Focus on education that is consistent with the needs of the knowledge-based economy.

3. Team work, critical thinking, & information-searching skills.

4. Promotion of Citizenship and volunteer work.

Fourth: Supply & Demand Geography:

1. Facilitate transportation to workplace.

2. Internal housings for workers.

From short-term solutions to a national strategy for employment

Fifth: Enhance women participation in Labor Market

1. Maternity Insurance.

2. Nurseries.

3. Micro-finance.

4. Home-based occupations.

Sixth: Promote vocational & technical occupations:

1. Restructuring vocational training.

2. Return to military service in a way that serves building capacities and skills of fresh graduates.

3. Awareness-raising campaigns to promote this culture.

From short-term solutions to a national strategy for employment

Role of Amman Municipality .• Transportation

• Housing

• Cost of business operation.

• National Strategy for Employment that:• Matches between supply & demand over the next (10)

years.

• Produces time-lined action plans and programs forproductive sectors in a way that gradually replaces non-Jordanian workers by Jordanians.

1. Plan for matching between education policies &demands of labor market.

2. Increases productivity of Jordanian worker.

3. Contributes to restructure Jordanian economy tobe oriented towards high added-value goods &services.

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