Lebanon has been experiencing a severe economic crisis since 2019, which has led to the collapse of the Lebanese pound's exchange rate and unprecedented inflation. As a result, the minimum wage has become insufficient to cover citizens' basic needs. In this context, the new Minister of Labor, Mohammad Haidar, has announced his intention to improve the minimum wage in coordination with the relevant ministries, reigniting the debate on the importance of such a measure and its ability to ensure social and economic stability.

Rising Cost of Living and Its Impact on the Working Class

Due to the weak local industrial sector, Lebanon heavily relies on imports, making it vulnerable to fluctuations in global commodity prices and rising transportation costs. According to the latest estimates, the cost of living for a family of four in 2024 reached approximately 52 million Lebanese pounds per month ($582) in rural areas and 71 million Lebanese pounds ($794) in urban areas, excluding healthcare expenses. Meanwhile, the minimum wage in the private sector remains at 18 million Lebanese pounds, an amount far from sufficient to cover daily expenses.

The Legal Framework for Wages in Lebanon

Despite government attempts to improve salaries, the lack of a clear mechanism for periodic wage reviews exacerbates the crisis. The first minimum wage increase was approved in April 2024, but it failed to keep up with soaring inflation. The General Labor Union is now calling for an increase to 50 million Lebanese pounds, which is considered the minimum threshold necessary to ensure a decent standard of living.

Challenges in Implementing a Minimum Wage Increase

Government instability: Any salary revision requires swift governmental decisions, but Lebanon suffers from chronic political instability, which may hinder implementation.

Financial and banking crisis: Most businesses are facing a liquidity shortage, making them unable to afford higher wages.

Lack of support for productive sectors: Without policies that encourage local production, Lebanon will remain dependent on imports, limiting its economic growth potential.

Wages not indexed to inflation: There is no legal framework mandating salary adjustments based on inflation rates, causing wages to lose their real value over time.

The Government’s and Labor Union’s Stance

In a statement to Al Safa News, General Labor Union President Bechara Asmar emphasized "the urgent need to reassess the minimum wage in both the public and private sectors." He also stressed the importance of incorporating the monthly state aid into base salaries to ensure workers have a stable income. He confirmed that negotiations with the new government are ongoing to adjust wages in line with the rising cost of living.

The recommendations proposed by Bechara Asmar are:

Regular revision of the minimum wage: Implementing legislation that mandates salary adjustments per annual inflation rates.

Support for productive sectors: Encouraging local manufacturing to reduce reliance on imports and control the cost of living.

Banking sector reform: Facilitating access to credit for businesses to enable them to increase salaries without jeopardizing their viability.

Activation of social protection programs: Ensuring targeted aid reaches the most vulnerable families amid soaring prices.

A Double-Edged Economic Tool

Speaking to Al Safa News, economist Dr. Khaldoun Abdel Samad stated that "raising the minimum wage in Lebanon has become an absolute necessity, far beyond a mere labor demand." He pointed out that "with the devaluation of the national currency and the skyrocketing cost of living, the current minimum wage is no longer sufficient to cover even the most basic needs of Lebanese households."

However, Abdel Samad argues that the solution is not just to raise the minimum wage but to adopt a comprehensive approach that considers businesses’ ability to absorb these increases without fueling inflation or causing the collapse of small and medium-sized enterprises. "Lebanon relies heavily on imports, meaning that any wage increase could directly lead to higher prices for goods and services," he warned.

He advocates for an integrated economic strategy, including:

Measures to support local production to limit inflationary impact;

Tax incentives for businesses that adhere to fair wage structures;

Strict price controls to prevent unjustified price hikes;

Fiscal and monetary reform to maintain citizens' purchasing power without harming the economy as a whole.

"In the end, the real challenge is not just setting a new minimum wage, but developing an economic plan that ensures social justice and long-term financial stability," the expert concluded.

An Inevitable but Insufficient Reform

In conclusion, raising the minimum wage in Lebanon is no longer an option but an urgent necessity to ensure a decent standard of living for citizens and to confront the ongoing economic crisis. However, this measure alone will not be enough to restore economic balance in the country. Without deep structural reforms, it risks being merely a temporary remedy in a crisis with far-reaching implications.