Mid Year Review; Give special attention to public sector wages — TUC

The Trades Union Congress (TUC) has asked the government to give “special attention” to the wages of public sector workers in the Mid-Year Review (MYR) of the 2019 Budget that is due to be presented to Parliament next week.

In a statement issued in Accra after a General Council Meeting, the union said “we expect the forthcoming mid-year review to announce policies that will effectively translate the gains in macroeconomic management into real and visible improvements in the living conditions of Ghanaians.”

It repeated its earlier position that although data showed improvements in the economy, “the apparent good sets of macroeconomic statistics are not adequately and visibly reflecting in the lives of the majority of Ghanaians.”

Declining wages

The statement said while the economy was said to be growing, real wages were declining, hence the need for the MYR, which is a requirement of the Public Financial Management Act, 2016 (Act 913), to pay special attention to the amount workers in the country were earning.

“No economy can grow on a sustainable basis if real purchasing power keeps declining.”

“In the public sector, for example, as part of the austerity measures introduced by the IMF-sponsored Extended Credit Facility Programme, salary increases have lagged behind inflation, thereby reversing the gains in real incomes of public sector workers, especially those placed on the Single Spine Salary Structure (SSSS),” the TUC said.

Wage pressures

The union added that public sector workers were expecting the forthcoming salary negotiations for 2020 “to reverse this negative trend.”
Public sector wage has been one of the rigidities faced by the government in recent years.

The pressure from the compensation bill on public finances manifested strongly last year when it turned out to be one of three criteria that the country missed under the recently concluded ECF programme with the IMF.

In the Memoranda of Financial and Economic Policies (MEFP) sent to the Executive Board of the IMF in March this year, the government said “wages and salaries exceeded the budget target by 0.04 per cent of gross domestic product due to unplanned recruitments and higher-than programmed wage-related allowances.”

Provisional fiscal data released by the Ministry of Finance also showed that in 2018, the public sector compensation bill was GH¢19.6 billion, equivalent to 41.2 per cent of that year’s total revenue and grants and 33 per cent of total expenditure.

As a per cent of tax revenue, the compensation bill, which includes wages and salaries, social contributions, pensions, gratuities and social contribution for the more than 500,000 workers, was 52 per cent, the same as 2017.

The TUC has often said that while the country could be saddled with a bigger compensation bill, real salaries of the majority of workers are small, as a chuck of the bill was consumed by top level managers.

Consolidate gains

The communiqué added that the people of Ghana were expecting that the improvements in macroeconomic management as shown by the macroeconomic indicators should reflect visibly in their pockets and in their lives.

According to the TUC, Ghanaians were also expecting the government to use the upcoming MYR to announce measures that concretely put the country on a more sustainable path that consolidates the apparent successes in macroeconomic management and ensure that Ghana never returns to IMF for a programme.

It also touched on developments in the conclusion of the IMF programme, the reforms in the banking sector and developments in the local and the international labour front.