General Secretary of the Ghana Agricultural Workers Union (GAWU), Edward Kareweh, has said the upward revision in the wages of public sector workers by government is a must.
According to him popular notions that wage expenditure and interest payments as a proportion of tax revenue is more than 100 percent and as such increments in the public sector wages is not needed, does not address the issue at hand.
“The general principle that because the economy is challenged and also because wage expenditure as a proportion of tax revenue is higher and therefore an increase in wages of public workers will affect governments’ already limited fiscal space and so on, is not addressing the core of the issue,” he noted.
Arguing out the need for wage increment by government, Mr Kerewah, averred increment in wages will stimulate demand for goods and services which will in turn drive up production by firms in the country thereby quickening the pace of recovery of the economy.
“Government needs to increase wages to stimulate demand, because if government doesn’t, demand contracts and when that happens it doesn’t matter how much government has invested in businesses in the country to whip up production. Demand is the key, so government should look at the wage increment from the perspective that it is going to raise demand for producers to increase production to meet the demand. So wage increment is a must,” he stated.
Speaking further Mr Kerewah noted, that unlike employees, most employers in the country have benefitted from the pandemic.
“We know the economy is challenged, but some employers have not been affected like employees have been by Covid. Some employers have really benefitted with some having increased salaries,” he stated.
Public sector workers have expressed worry about the delay in the upward review of their salaries amid increased and newly introduced taxes, expressing fears over a possible freeze in increase of salaries by government.
But allaying their fears at the 11th Quadrennial Delegates Congress of the Trades Union Congress (TUC) in Kumasi, President Akufo-Addo assured the leadership of the TUC that salary increments for public sector works had not been frozen.
“The truth of the matter is that, we are not in normal times, and we are appealing to all Ghanaians including organised labour to assist the government in this endeavour to help rebuild our public finances and economy. But let me reiterate that, the salary increments for public sector workers have not been frozen,” stated the president.
Government, according to the 2021 budget statement, is expected to spend about Ghs 25.7 billion – 5.9 percent of GDP – in wages to public sector workers for this year.
The amount to spent this year is however, 0.6 percent less of GDP (6.5 percent) on what was spent on wages of public workers for last year 2020.
