EFFORTS TO ARRIVE AT MINIMUM WAGE (FEB 28)

THE directive from the Minister of Finance and Economic Planning, Dr Kwabena Duffuor, to the National Tripartite Committee to convene and determine the national daily minimum wage for this year is an initiative in the right direction.
We believe strongly that for any policy initiative to work, stakeholders must have their concerns factored into it. For a policy document like the national budget, wider consultation is even needed. It is against this background that we would like to commend the minister for his quick thinking, since we believe that the Ghanaian worker is extremely important to national economic development planning.
But this is only one part of the process; there is more tinkling to be done. Setting a minimum wage in any country is never an easy task. There is a clear difference between a minimum wage and a living wage. A minimum wage would normally ignore what will actually make the people more comfortable. This is why we believe that members of the committee who will attend the meeting should be circumspect in their demands.
There is no doubt that the country's economy is up against a huge challenge this year. With the global economy experiencing what analysts describe as the worst financial crisis since the Great Depression of the 1930s, Ghana is bound to experience some economic shocks.
The Daily Graphic, therefore, calls on all Ghanaians to bear with the government as it tries to address the challenges facing the economy.
The economy is facing severe challenges and the only way forward is for all of us to tighten our belts as we experience short-term economic hardships as a result of some of the policies the government will introduce in this year’s budget.
In his State of the Nation Address, President John Evans Atta Mills served notice that the government would have to control spending in order to close the widening fiscal deficit. To control spending, the country has to control wages and salaries, as the government's wage bill is one of its biggest expenditure. This means that unnecessary wage demands will put the government in a difficult situation.
Unemployment is very high in the country at present, and for the informal sector the slow business environment has made it difficult for it to operate at a profit. The cost of doing business in the country is also high, and with the central bank's decision to increase the prime rate by 1.5 per cent, the cost of doing business will even soar higher.
Therefore, a minimum wage that is not sustainable will rather lead to more unemployment and redundancy, as those businesses that are not able to cope with the high cost of doing business will close down.
Thankfully, there is a blueprint that will serve as a good reference point for all stakeholders. The process to put in place a singe spine salary structure for Ghanaian workers began in 2006 and significant progress has been made, despite the fact that the process has suffered some problems.
The Daily Graphic believes that there are sacrifices that need to be made in the short term if the country is to stay on track to achieve a middle-income status by 2015.
It is true that the Ghanaian worker has not been receiving adequate remuneration for some time now, but this does not mean that we should turn a minimum wage demand into a living wage demand. That will certainly kill businesses and bring the economy to complete stagnation.