Monthly income of informal workers averaged GHS 2,200 in 2023
Per a recent report by Women in Informal Employment: Globalizing and Organizing (WIEGO), Ghana’s average monthly living wage stood at GH¢2,922 in 2023.
According to the report, a stark disparity exists within the informal sector, where many workers struggle to earn a livable income.
Titled ‘Navigating Inflation: Impacts of the Cost-of-Living Crisis on Workers in Informal Employment in Ghana,’ the report sheds light on the challenges faced by kayayei (head porters), market traders, street vendors, and waste pickers, who constitute a significant portion of the Ghanaian workforce.
Income Disparities in the Informal Sector
The report highlights that despite the average monthly wage, a typical worker in the focus groups earned only GH¢1,500 per month. The wage breakdown reveals even more concerning disparities:
- Kayayei: GH¢500 monthly
- Street Vendors: GH¢1,250 monthly
- Waste Pickers: GH¢1,300 monthly
- Market Traders: GH¢2,200 monthly
Most of the interviewed workers were primary earners in their households, emphasizing the widespread impact of these wage disparities.
Ineffectiveness of Government Interventions
Despite the Government’s efforts to mitigate the cost-of-living pressures, the interventions have largely been ineffective in supporting the informal workforce.
In mid-2022, amidst a two-decade high inflation rate, the government approved a 15% Cost-of-Living Allowance, which expired in December 2022 and was limited to public sector workers.
Additionally, a 10% increase in the minimum wage in January 2023 failed to provide relief to workers in the informal sector, who remain largely outside its scope.
High Inflation Exacerbates Wage Insufficiency
The report underscores that the high inflationary pressures have rendered the wages earned by the focus groups insufficient to maintain a basic but decent living standard.
The inability of wage increases to keep pace with inflation has exacerbated the cost-of-living crisis, leaving many workers in the informal sector struggling to make ends meet.
The findings of the WIEGO report highlight the urgent need for comprehensive and targeted interventions to address the cost-of-living crisis and support workers in the informal sector in Ghana.
The widening wage disparities and the failure of government policies to provide adequate relief underscore the challenges faced by the informal workforce in navigating the economic pressures exacerbated by high inflation.
Addressing these challenges is crucial to ensuring a more equitable and sustainable economic environment for all workers in Ghana.
