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Atlas of Jordan

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Myriam Ababsa

Chapter eight - Social Disparities, Poverty Alleviation and Employment Policies

The Socio-Economic Composition of the Population

Myriam Ababsa

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In search of the middle classes

1In 2008, the Economic and Social Council (ESC), a national institution composed of members of civil society and government, and responsible for informing and advising the relevant authorities on economic and social matters, published a study of social groups in Jordan. The results of this study indicate that, contrary to widespread belief that the middle class had become part of the poor classes, it still forms 41% of the population and participates fully in its patterns of consumption and economic drive.

2The study’s authors assume that Jordan has a large middle class, based on the fact that 67% of households own their homes, 48.6% pay Social Security contributions and 40% own a car (Tabbaa 2008). Yet such factors are insufficient to identify the middle class given that half the residents of Amman’s poorest informal settlements are home-owners, and one third of the population benefits from social security since they are refugees registered with UNRWA. Car ownership is a better indicator, but of course it also characterizes the upper classes. Hence the authors studied in detail household income and expenditure weighting them by size.

3The ESC study was based on the statistics of the 2008 Household Expenditure and Income Survey (HEIS). Starting from the poverty line: JD 56.6 expenditure per person per month (JD 680 per year), the study considered that any individuals whose annual per capita expenditure was at least twice but no more than four times the Department of Statistic’s general poverty line formed the middle class, i.e. between JD 1,360 and 2,720 per person per year, or JD 7,752 and 15,504 per year for a family of 5.6 people.

4The ESC researchers’ method is unique in that it takes into account average household size, which decreases as spending levels rise, then multiplies this figure by expenditure per head to calculate rates per class. According to this method, the percentage of poor is 13.3%, that of the population below the middle-class 37.5%, the middle class 41.1% and the upper-class 8.2% (Tabbaa 2008). The study found that the middle classes make up one third of urban households, but only a quarter of rural households. Contrary to popular belief, the middle classes do not consist of public sector employees but rather of licensed professionals and employees of the booming private sector: mainly working in finance, transport, telecommunications and real estate, whose salaries are relatively high.

5This study was criticized by several ministers and experts who estimate that the middle class makes up 20% of the population, based on income rather than expenditure (Azzeh 2010).

6Figure VIII.13 compares three classes of household expenditure (defined by the 2008 HIES): the poverty line at JD 4,800 and the middle class between JD 8,000 and JD 12,000 annual expenditure. The graph shows two peaks: one at around JD 8,000 per household per year, which comprises over half the population, and another around JD 14,000 which represents the wealthy classes. In Amman, home to the richest households in the kingdom, 20% of households exceed JD 14,000 expenditure per year; in the remaining governorates fewer than 10% of households are wealthy.

Figure VIII.13 — Social Classes according to the Average Annual Household Expenditure for several Governorates in 2008.

Figure VIII.13 — Social Classes according to the Average Annual Household Expenditure for several Governorates in 2008.

7For the purposes of international comparison, the DOS has divided Jordanians into five quintiles of average income. The first quintile includes the poorest and the fifth includes the highest income class. In its study on poverty published in Arabic in April 2010, the DOS classified household expenditure by quintile, using calculations that are far lower than Tabbaa’s. According to the DOS chart, the middle class is the fourth quintile (between JD 6,847 and JD 11,274 annual expenditure per household).

Table VIII.1 — Social classes related to quintles (according to expenditure).

Average Annual Expenditure per Household in 2008 (JD)

Class

First Quintile

3,737

Poverty line and above

Second Quintile

4,850

Lower Middle Class

Third Quintile

5,911

Middle Class

Fourth Quintile

6,847

Upper Middle Class

Fifth Quintile

11,274

Affluent Class

Average in Jordan

7,057

8The first quintile contains one-third of the Jordanian population and not 13.3% as claimed by studies on poverty. In the governorate of Mafraq, almost half the population is in the first income quintile, followed by the poorest governorates of Kerak, Tafila and Ma‘an (fig. VIII.14). 11% of the population falls in the highest income quintile. The Governorates of Amman and Aqaba have the largest concentration of high incomes (over a third of the population of Amman Governorate declares high incomes) (fig. VIII.15).

Figure VIII.14 — Percentage of Households belonging to the Lowest Wealth Quintile by Governorate in 2009.

Figure VIII.14 — Percentage of Households belonging to the Lowest Wealth Quintile by Governorate in 2009.

Figure VIII.15 — Percentage of Households belonging to the Highest Wealth Quintile by Governorate in 2009.

Figure VIII.15 — Percentage of Households belonging to the Highest Wealth Quintile by Governorate in 2009.

 

9According to the 2008 HEIS, salaries only count for half of income on average, the rest consists of undeclared income (self-employment), income from rents (13%) and transfers (remittances from family members living abroad, pensions, state benefits and charitable donations). The lowest average incomes per family are found in Madaba, Balqa’ and Zarqa where wages are low and where households’ own resources are limited (fig. VIII.16).

Figure VIII.16 — Sources of Income by Social Segments in 2008.

Figure VIII.16 — Sources of Income by Social Segments in 2008.

Source: Household Expenditure and Income Survey, 2008, DOS.
Tabbaa Y, 2008, Assessing the Middle East Class in Jordan, Economic and Social Council.

10On average, 21% of Jordanian household income comes from transfers and remittances (one third among the poorest families). Figure VIII.17 shows the details of transfers, including pensions (that account for half) and social security benefits (since 2008, social security also covers pensions). The National Aid Fund accounts for a fifth of transfers, and remittances from expatriates make up one seventh of transfers. Family solidarity is essential and serves as a safety net for many Jordanians who would otherwise be homeless, it forms a seventh of transfers. Lastly, there is significant charitable aid, particularly Islamic aid provided by the Islamic Center Society. NGO work has been strictly supervised by the Ministry of Social Development since 2008 (and restricted by Law 51 on associations). In 2007, the two largest NGOs were placed under financial supervision: the Islamic Center Society and the General Union of Voluntary Societies. The Islamic Center Society, founded in 1963 in Palestine is the charity branch of the Muslim Brotherhood in Jordan. It is very active throughout the country, managing a network of fifty schools, two hospitals and 14 medical centres. They support 18,500 orphans (while the government supports only 3,000). In 2011, their budget was 60 million dinars, of which JD 25 million was allocated to social action (payment of benefits), a considerable sum compared to the JD 80 million budget of the Ministry of Social Development.

Figure VIII.17 — Breakdown of Transfers in 2008.

Figure VIII.17 — Breakdown of Transfers in 2008.

Source: Household Expenditure and Income Survey, 2008, DOS.
Tabbaa Y, 2008, Assessing the Middle East Class in Jordan, Economic and Social Council.

National Aid Fund

11To offset the social costs of structural adjustment and lower subsidies, the government increased crisis aid provided by the National Aid Fund, an organization founded in 1986 to assist those most affected by the economic crisis. As required, the Fund supports them with financial aid, helps them set up micro-enterprises and covers their health-care and schooling (or training) needs. The number of families registered with the Fund has continued to grow in response to political, economic and social factors that have affected Jordan, such as the first Gulf War (which resulted in the sudden return of 300,000 Jordanian expatriate workers); Israeli repression in the Occupied Palestinian Territories (which led to undetermined numbers of Palestinian emigrants); the conflict in Iraq since 2003 (which led to the influx of 200,000 to 400,000 Iraqi refugees); and the 2008 global financial and economic crisis. As a result, those receiving cash assistance rose eightfold from 8,308 families in 1987 to 64,000 families in 2004 (Al Husseini 2005).

12In 2008, 5% of Jordanian households received direct aid from the National Aid Fund, while the rate reached 13% in the very poor governorate of Mafraq (fig. VIII.18).

Figure VIII.18 — Source of Aid by Governorate in 2008.

Figure VIII.18 — Source of Aid by Governorate in 2008.

DOS 2010

13To qualify for government welfare, one must meet the following criteria: be widowed, divorced, have a handicap of more than 75%, be over the age of 60 (without a pension and without a son in the workforce) or be married to a prisoner or to a man who is living abroad. The amount of aid varies from JD 40 to JD 180 per month depending on the number of people in the household:

1440 JD for a single person, JD 90 for two people, JD 130 for three, JD 160 for four and JD 180 for five or more. Once a ‘child’ over the age of 23 starts work, a quarter of his salary is deducted from the aid payments (about JD 50 for a salary of JD 200).
In addition to this monthly aid, each beneficiary family receives annual food aid in-kind equivalent to JD 150, which consists of 50 kg of rice, 50 kg of sugar, one tanake of Samne (16 litres of ghee), one tanake of olive oil, one tanake of peanut oil, 5 kg of chickpeas, 5 kg of white beans and cans of tuna and sardines. This is enough to meet the needs of a family for three to six months, depending on its size.

Household debt

15Figure VIII.19 shows household debt, calculated from the difference between declared expenses and revenues. It shows that the country is split in two south of Madaba, whereby the southern half is heavily in debt while in the northern half of the country revenues and various transfers cover expenses. Of course, these averages hide the existence of the pockets of urban poverty discussed above.

Figure VIII.19 — The gap between Yearly Household Expenditure and Income by Subdistrict in JD in 2008.

Figure VIII.19 — The gap between Yearly Household Expenditure and Income by Subdistrict in JD in 2008.

16The bulk of household expenditure goes on food (38% on average, but as much as 47.7% in the poorest households). Housing follows with 18.7% of spending, a high figure considering that the majority of Jordanians are homeowners. Expenses related to transportation (13.1%) penalize the poorest most since they are dependent on the public transport system which is insufficient and costly. Spending on education sets classes apart the most in Jordan and enrolment in private schools is reserved for the upper classes. The 2008 HIES figures are very low - JD 630 annual expenditure per household for the middle classes and over JD 1,106 for the wealthy - while the minimum cost of private schooling is JD 1,000 per child per year, and generally around JD 2,500 per child per year, which only the upper classes can afford (with two to three children per household, annual fees are between JD 5,000 and JD 7,500). In the public school system, the purchase of school supplies and books does not exceed JD 300 per household per year.

Household equipment

17While a majority of Jordanians are homeowners (67.3% in 2008), only 38.9% own a car. Figures VIII.20 and VIII.21 show that the highest rates of car ownership are in the districts of Salt and the wealthy northwest of Amman, but also in Ma‘an and Tafila where transportation-related activities employ a large proportion of the population. Only a third of Jordanian households owned a computer in 2008 (in districts where the population is mostly urban), and 7.9% had an internet connection, an indicator of high income since the cheapest subscription cost JD 60 per year in 2008 (fig. VIII.22 and VIII.23).

Figure VIII.20 — Percentage of dwelling owners (2008).

Figure VIII.20 — Percentage of dwelling owners (2008).

Figure VIII.21 — Percentage of Household with a car in 2008.

Figure VIII.21 — Percentage of Household with a car in 2008.

Figure VIII.22 — Percentage of Households with a computer by caza in 2008.

Figure VIII.22 — Percentage of Households with a computer by caza in 2008.

Figure VIII.23 — Percentage of Households with an internet connexion by caza in 2008.

Figure VIII.23 — Percentage of Households with an internet connexion by caza in 2008.

Table des illustrations

Titre Figure VIII.13 — Social Classes according to the Average Annual Household Expenditure for several Governorates in 2008.
URL http://books.openedition.org/ifpo/docannexe/image/5038/img-1.jpg
Fichier image/jpeg, 80k
Titre Figure VIII.14 — Percentage of Households belonging to the Lowest Wealth Quintile by Governorate in 2009.
URL http://books.openedition.org/ifpo/docannexe/image/5038/img-2.jpg
Fichier image/jpeg, 132k
Titre Figure VIII.15 — Percentage of Households belonging to the Highest Wealth Quintile by Governorate in 2009.
URL http://books.openedition.org/ifpo/docannexe/image/5038/img-3.jpg
Fichier image/jpeg, 128k
Titre Figure VIII.16 — Sources of Income by Social Segments in 2008.
Crédits Source: Household Expenditure and Income Survey, 2008, DOS.Tabbaa Y, 2008, Assessing the Middle East Class in Jordan, Economic and Social Council.
URL http://books.openedition.org/ifpo/docannexe/image/5038/img-4.jpg
Fichier image/jpeg, 72k
Titre Figure VIII.17 — Breakdown of Transfers in 2008.
Crédits Source: Household Expenditure and Income Survey, 2008, DOS.Tabbaa Y, 2008, Assessing the Middle East Class in Jordan, Economic and Social Council.
URL http://books.openedition.org/ifpo/docannexe/image/5038/img-5.jpg
Fichier image/jpeg, 68k
Titre Figure VIII.18 — Source of Aid by Governorate in 2008.
Crédits DOS 2010
URL http://books.openedition.org/ifpo/docannexe/image/5038/img-6.jpg
Fichier image/jpeg, 80k
Titre Figure VIII.19 — The gap between Yearly Household Expenditure and Income by Subdistrict in JD in 2008.
URL http://books.openedition.org/ifpo/docannexe/image/5038/img-7.jpg
Fichier image/jpeg, 160k
Titre Figure VIII.20 — Percentage of dwelling owners (2008).
URL http://books.openedition.org/ifpo/docannexe/image/5038/img-8.jpg
Fichier image/jpeg, 156k
Titre Figure VIII.21 — Percentage of Household with a car in 2008.
URL http://books.openedition.org/ifpo/docannexe/image/5038/img-9.jpg
Fichier image/jpeg, 152k
Titre Figure VIII.22 — Percentage of Households with a computer by caza in 2008.
URL http://books.openedition.org/ifpo/docannexe/image/5038/img-10.jpg
Fichier image/jpeg, 140k
Titre Figure VIII.23 — Percentage of Households with an internet connexion by caza in 2008.
URL http://books.openedition.org/ifpo/docannexe/image/5038/img-11.jpg
Fichier image/jpeg, 136k

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