Dr Patrick Asuming, an economist, has intimated that government currently is not in the right financial standing to cater to the 19% increment in salaries being demanded by organised labour.

Dr Asuming revealed that the economy is not in the strongest position it can be in and it’s fortunes has been further exacerbated by government’s finances which is“very tight” at the moment. Owing to this, he explained that a lot of these agitations have come about because the macroeconomic environment is deteriorated.

“In the meantime, it appears that they may have to agree to maybe some moderate increment. But I think 19% increase is not something that the government’s finances can contain at this moment.”
Dr Patrick Asuming

Expounding on the agitations by the labour front, Dr Asuming opined that the public sector wages increment that was agreed sometime back was about 7%. However, he noted that the country’s current inflation is 19.4% and over the last nine months it has been in double digits. By virtue of this, he underscored that labour’s agitation can be understood “because the inflation has been eroding away their wages”.

“… So, real wages would have gone down. I think government of Ghana needs to come up with something convincing that the macroeconomic environment will stabilize. I think if we were at a situation where inflation was lower single digit, I don’t think labour will be agitating as much as it is doing.”
Dr Patrick Asuming

Resolution of organised labour concerns

Considering government’s current predicament, Dr Asuming suggested that organised labour should for now compromise and accept a more “moderate increment”. This, he emphasized, must be accepted because he doubts government can afford to raise public sector wages by 19%.

“You have to understand that inflation over the last twelve months has not been 19%. Yes, it is increasing. So, I think if the inflation stays this high for long, then a demand for such will seem justified. This is not to say that labour does not have an argument [and] they don’t have a point demanding that their salaries are increased. But I think in some sense you have to see the circumstances in which we are and then see whether it is feasible for government to see to that.”
Dr Patrick Asuming

Commenting on what government can do in the interim to ensure there’s a win-win for both government and organised labour, Dr Asuming called for negotiations between the two parties. He indicated that government must be transparent about its predicament and assure labour of its commitment to better conditions of service.

“I think maybe government needs to meet with labour and negotiate in all sincerity and show a lot of candour and appreciate that, indeed, the recent circumstances have not been fair to organised labour… Once you hear these agitations, you obviously have to approach them and meet and at least try and let them know you share their concerns.”
Dr Patrick Asuming

Admittedly, Dr Asuming explained that although organised labour seem reluctant to accept that the challenges are related to the recent issues in Ukraine, he reckoned that there must be something to convince labour that going forward conditions will improve.

“You will recall that last year, the wage increase that was given to labour is lower than we are having this year but we didn’t see this much agitation. So, it clearly tells me that the fact that the economic situations have worsened is the main thing that is driving this agitation.”
Dr Patrick Asuming