Information International, a Beirut-based research and consultancy firm, has published a study that sheds light on the plummeting minimum wage in Lebanon in the wake of the economic crisis and the devaluation of the Lebanese pound.
The said law sets the minimum wage in Lebanon at LBP 675,000, which was equal to $450 at the time of its approval in August 2017.
Today, however, LBP 675,000 is practically equal to no more than $72, which means that the minimum wage has fallen by 84% with the devaluation of the Lebanese pound, the study indicates.
The decline has significantly affected people in the public sector, from employees and judges to soldiers and officers of various ranks, not to mention teachers in the public sector.
For instance, a Lebanese University professor whose salary was worth $2,466 (LBP 3.7 million) before the devaluation is now worth $394.
Similarly, a soldier who was getting paid $864 on the official exchange rate is now earning $138 on the black market rate.
Needless to say, the private sector has also been hit by the devaluation, and the study estimates that only around 5% of private institutions are still paying their employees in U.S. dollars.
While some businesses are paying their employees partially in hard currency, others have adopted the 3,900 USD/LBP exchange rate (the rate set by the Central Bank’s platform) for wages, or are paying employees 50% of the value of their original wages.
However, the study also indicates that the largest portion of private businesses has left salaries as they were before the crisis, in Lebanese pounds, without any change.
Today, the majority of private-sector employees in the commerce and industry sectors have salaries between 1 million LBP and 2.5 million LBP.
Before the devaluation, these salaries would have been worth $666 and $1,666 respectively; now, they’re worth $106 and $266.
Bank employees are regarded as the best-paid private sector employees today, the study shows, as their salary is estimated to be, on average, 3.4 million LBP (range: 630,000 LBP – 14 million LBP) — $2,266 previously, $361 today.