- 19
- Mar
- 2025
With each new government, the issue of salary adjustments is systematically brought back to the agenda.
In one of his first statements to the press, the new Minister of Labor, Mohammad Haidar, said that raising the minimum wage is among his priorities. He noted that the matter would be discussed with Finance Minister Yassine Jaber but did not specify a figure.
Recently, some have called for a minimum wage of $1,000—five times the current $200—while others, taking a more pragmatic view, have proposed setting it at 50 million Lebanese pounds.
These demands are driven by the decline in purchasing power, caused by an overall rise in consumer prices of about 20% between March 2024 and March 2025. This increase is attributed to higher taxes, rising insurance and transportation costs due to the war, and imported inflation on certain goods.
According to the latest report from the Central Administration of Statistics, the cost of education services rose by 30% in the first two months of 2025, while staple food prices increased by 13%.
In Lebanon, living wage standards assessments indicate that a family can meet its basic needs only if at least two of its members each earn the minimum wage.
An Increasingly Difficult Daily Life
The daily life of workers is becoming increasingly difficult as the quality of state-provided services continues to deteriorate. This situation forces citizens to rely on alternative providers, effectively paying twice for the same service.
For instance, the subscription fee to the Water Authority has increased from 13,200,000 Lebanese pounds in 2024 to 16,200,000 Lebanese pounds in 2025. However, since tap water is unfit for consumption, families are forced to purchase bottled mineral water and rely on tanker trucks to refill their household reservoirs. This situation arises from frequent power outages and fluctuations in the pressure of the public water network. It is also important to note that the cost of 1,000 liters of water for domestic use is billed between $15 and $20, depending on the region.
These additional costs place a heavy burden on household budgets, making the balance between expenses and income increasingly unstable, especially as wages remain stagnant.
A Hazardous Increase
The decision to broadly link the rise in the cost of living to wages is currently fraught with risk, as wages depend on the financial capacity of both private sector companies and the state—two entities that are currently unable to shoulder such burdens. An increase in the minimum wage could lead to mass layoffs in the private sector or push employees into the black market. For public sector employees, a resumption of money issuance by the Lebanese Central Bank (BDL) would inevitably result in a loss of control over the money supply, triggering further depreciation of the Lebanese pound against the dollar.
The challenges private companies face in absorbing a broad wage increase are underscored by a more than 67% drop in GDP, which declined from $54.9 billion in 2018 to $17.94 billion in 2023, according to World Bank figures. This downturn has resulted in a reduction in GDP per capita, from $700 per month in 2018 to approximately $475 today. Typically, GDP growth is seen as a sign of economic health, while a decline may signal a recession.
In this context, employees are being asked to further tighten their belts, while employers are urged to reduce their operational expenses.
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