“Many people assume that working in formal employment insulates one from financial difficulties. No, that is not true. We are working, but we are poor. What we earn are not living wages.” Martha, a middle-aged lady teacher said through clenched teeth to her colleagues as they listened to the finance minister present the 2023 Budget Statement and Economic Policy of Government to parliament on November 24, 2022.
The International Labour Organization observed in its World Employment and Social Outlook: Trends 2022 that: “Poverty has increased significantly among working people. The share of workers living in extreme poverty went up from 6.7 per cent in 2019 to 7.2 per cent in 2020, which equates to an increase of 8 million in the number of working poor.” The ILO further acknowledges in it’s 2022-2023 Global Wage Report that: “inflation was biting into the purchasing power of minimum wages”. The report also estimates that global monthly wages fell in real terms to minus 0.9 percent in the first half of 2022. It is the first time in this century that global wage growth fell into the negative.
Most workers in Ghana do not earn living wages. They subsist on salaries that cannot even sustain them through the middle of the month. According to the Global Living Wage Coalition, “a living wage is the remuneration received for a standard work week by a worker in a particular place sufficient to afford a decent standard of living for the worker and her or his family. Elements of a decent standard of living include food, water, housing, education, health care, transportation, clothing, and other essential needs including provision for unexpected events.”
Consequently, workers have adopted industrial actions, particularly strikes to get governments to address the problem of insufficiency of their emoluments. Ghana established the Fair Wages and Salaries Commission under the FWSC Act, (Act 737) to implement the Single Spine Pay Policy the Single Spine Pay Policy, majorly grading and classifying public service workers. The Single Spine ironically has not been able to close the gap in the earnings between the article 71 office holders on one hand and other public service workers on the other. Constant agitations by the bourgeois for a review of the single spine to bring about fairness in wages have not received the necessary attention until only this year when a committee has been set and tasked to review the salary.
Meanwhile, government failed to honour organized labour’s requests for the start of negotiations for 2023 until it was left with only few weeks to the reading of the 2023 budget. It is quite clear this was a strategy to rush the negotiation process thereby causing union leaders to accept anything offered without doing due diligence. Developments at the labour front lately show times have changed and negotiations are no longer business as usual. Earlier this year, workers demanded and obtained the payment of cost of living allowance (COLA) to mitigate the effects of the current harsh economic conditions on them till the end of the year when they expect that negotiations between government and their leaders would have produced an outcome they can consider as being fair and reasonable. Ironically, government and the public sector labour unions are currently deadlocked at the negotiation table over the 2023 base pay and relativities. The stalemate notwithstanding, the finance minister presented the 2023 Budget and Economic Policy to parliament making a provision of some GHS44.9m (representing 5.6% of GDP) for compensation of employees.
The days when governments literally determined for themselves and imposed how much they paid workers and made wage negotiations mere formalities are far gone. Labour union leaders undertaking the negotiations with government are resolute in taking into account the real effects of all economic conditions into account in determining the base pay this time round. Workers wait with bated breath upon the outcome of the negotiations.