Minimum wage that cannot take the worker anywhere!
The National Tripartite Committee (NTC) recently announced an increase in the national daily minimum wage to GHc 12.53 which represents a four per cent increment on the 2020 figure of GHc 11.82. The increment followed a conclusion of negotiations on the determination of the National Daily Minimum Wage in respect of 2021 and 2022 at its meeting held on Thursday, June 3, 2021, in Accra.
The determination of the national minimum wage is in accordance with Section 113 (1) (a) of the Labour Act, 2003 (Act 651).
NATIONAL MINIMUM WAGE
At the end of that meeting, it was also agreed that for the year 2022, the national daily minimum wage would be pegged at GHc 13.53, a seven per cent increment on the 2021 figure.
The reason assigned to the current figures was that the NTC took into account the COVID-19 pandemic and its attendant hardships that strongly influenced the percentage increases in the salary adjustments.
“In determining the new rates, the NTC took into account the impact of the Covid-19 pandemic on the national economy, cost of living, sustainability of businesses and the desirability of attaining high level of employment,” it stated.The national minimum wage rate for 2021 which is tax exempt took effect from June 4, 2021.
The Trades Union Congress (TUC), had early on, asked the government to stop using COVID-19 pandemic as an excuse and review the salaries of the workers upwards to help them deal with the recent economic hardships in the country.
Organised labour argument is that the recent fuel increments, coupled with the skyrocketing prices of goods and services, are taking a toll on the Ghanaian worker. They have pleaded with government to review workers’ salaries, as well as taxes to reduce their financial burden.
Indeed, times are hard and workers are justifiably right in asking for salary increases that will stand the test of time and support them to make ends meet with their families and other dependants. You cannot begrudge them. The workers are, indeed, not happy with the TUC for their stance in the recent salary negotiations, accusing the union of stabbing them at the back.
GLOBAL EMERGENCE OF MINIMUM WAGE
For the benefit of my readers and patrons, it is important to delve a bit into history of how this minimum wage came into being globally, vis- a- vis how some countries have managed to make their workers better using the National Minimum Wage formula.
The minimum wage concept was first introduced in New Zealand in 1984 and the Austrian State of Victoria in 1986. The motivation was to fight poverty among the working class, particularly the segment of the workers that was not covered by collective agreements and was vulnerable to low pay conditions. By close of 2016, about 160 economies of 189, had a minimum wage. Countries with national minimum wage include, United States of America (USA), South Korea, Spain, Portugal, Argentina, Australia, Austria, Belgium, Benin, Botswana, Brazil, Burkina Faso among others.
THE WORK OF THE TRIPARTITE COMMITTEE
Over here in Ghana, the annual fixing of the minimum wage lies in the bosom of the Tripartite Committee made up of the government, employer and the worker. The committee is headed by the Minister of Employment and Social Welfare. The committee is established under section 112 of the Labour Law, Act 651 of 2003. Its core mandate is to review and adjust the minimum wage in line with the changes in the economic and social circumstances of the country including changes in the cost of living. This ensures that the minimum wage stays closer to the economic and social realities of the country. The minimum wage covers workers in all sectors of the economy.
It is unfortunate that despite annual adjustment, Ghana’s minimum wage is normally very low wage. The minimum wage has remained around US$ 2.00 a day for the past decade. It is also significant to note that increases in the minimum wage have always been below inflation rate and that has often led to decreases in real minimum wage.
It appears that the national institutions that have the mandate to enforce the minimum wage and other labour legislations are too weak to carry out their duties.
SIGNIFICANCE OF MINIMUM WAGE INTRODUCTION
When the minimum wage was introduced in the country in 1939, the major objective was to fight poverty among the working class. It was to ensure that people working on full time basis, could earn enough to enable them and their families to escape poverty. Thus, minimum wage increases are aimed at motivating workers to raise their effort levels and spur greater investments in human capital as well as boosting labour productivity.
Another major weakness in Ghana’s minimum wage is the lack of enforcement. This has resulted in high level of non-compliance. Enforcement is hampered by the failure of the state to resource the industrial relations institutions that are mandated to enforce the minimum wage and other labour legislations.
REPORTS OF ARTICLE 71 OFFICE HOLDERS EARNING FAT SALARIES
Currently there are allegations that while the average workers are being asked to tighten their belt by receiving as low as six per cent increment in their 2020 salaries for this year, Article 71 office holders who include the President and his Vice, the Speaker of Parliament, the Chief Justice and the Justices of the Supreme Court, Members of Parliament, Ministers of State, political appointees and public servants, are paying themselves fat salaries at the blind side of the workers. If that is the case as being peddled on social media, then that is most unfortunate and not healthy for this country.
The Tripartite Committee which sat and arrived at the six per cent increment use the COVID-19 pandemic which has affected the economy greatly as a yardstick for fixing the percentage increase and, therefore, that should be the overriding principle in the determination of the general salaries for this country. Besides, the Executive and ministers of state and other government functionaries are already earning good salaries with other service conditions that go with them. Therefore, giving themselves more salaries is not in the best interest of a country such as Ghana which is facing a lot of challenges with the economy.
FREEZE ON SALARY INCREMENTS FOR EXECUTIVE, OTHERS
The President must give true meaning to his recent announcement that he has put a freeze on salary increments for himself, the Vice President, ministers of state and all other appointees of the Executive as a way of appreciating the plight of Ghanaians in the wake of the negative economic impact of the pandemic.
Indeed, the workers are suffering and the recent four per cent increase in their salaries is nothing good to sustain them, especially when most of them have other dependants and families to cater for. This is the time for the Trades Union Congress (TUC) and other organised labour unions to team up and fight for the rights of workers. Money being spent aimlessly on unnecessary projects at this point in time needs to be channeled to improve the welfare of workers who are toiling day and night with their sweat to build this nation.
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By: Charles Neequaye