The 2023 Minimum Wage of 10% factored 15% COLA and at 54.1 % Inflation

The 2023 Minimum Wage of 10% factored in 15% COLA and at 54.1 % Inflation; Navigating the 2024 Minimum Wage Negotiations: A Reflection on 2023 and What Lies Ahead –

As the clock ticks towards Monday, November 13th, at 2 pm, the National Labour Commission is gearing up for a crucial meeting that will shape the economic landscape for countless workers in Ghana. This meeting will determine the 2024 minimum wage, setting the stage for the subsequent annual salary increment percentage announcement. 2024 Base Pay and Salary Negotiation, Official Invitation to Meeting FWSC

Reflecting on the developments of the previous year provides invaluable insights into the factors that influenced the 2023 minimum wage decisions and sets the context for anticipating what might unfold this time.

The 2023 Minimum Wage Decision

In a communique released by the National Tripartite Committee (NTC) on the 2023 National Daily Minimum Wage (NDMW), several critical factors were considered during the negotiation process. These factors included the prevailing economic challenges, the cost of living, the sustainability of businesses, the desire to attain higher levels of employment, and the urgent need for macroeconomic stability.

The Committee arrived at two key conclusions:

1. A 10% Increase: The NDMW was increased by 10% over the 2022 rate, resulting in a new NDMW of GHS14.88.
2. Cost-of-Living Allowance (COLA): A COLA of 15% over the 2023 NDMW was introduced.

The effective date for the implementation of the 2023 NDMW was set for January 1st, 2023. The NTC also recommended that the 2023 NDMW should be tax-exempt.

Impact and Implications

The increase meant that no worker in Ghana should receive less than GHS14.88 as their daily minimum pay from January 1st, 2023.

Companies were urged to adjust their pay structures accordingly, and any non-compliance would result in legal sanctions. Notably, the NTC emphasized the tax-exempt status of the 2023 NDMW.

However, the critical question arose: Would salaries be increased by 10% or 15%? The answer was deferred, pending further negotiations and calculations by the Labour Unions.

A daily Minimum wage of   10% was not a salary increment percentage.

After the Minimum wage Negotiations, Labour Unions will sit to calculate and negotiate for the Next Year’s Salary Increment based on the new Minimum wage.

Last year government and Labour unions Agreed on 30% without COLA.

Looking Ahead to 2024

As the 2024 minimum wage negotiations approach, the economic landscape is a crucial consideration. The August 2023 inflation rate stood at 40.1%, indicating a potential shift from the 54.1% inflation rate considered in the 2023 negotiations.

The dynamics of inflation, combined with last year’s increment of 30%, will undoubtedly influence the forthcoming salary increment negotiations.

As the National Labour Commission convenes with labour unions, the interplay of economic factors, cost of living, and the sustainability of businesses will once again take centre stage.

What happened last year provides a roadmap for understanding the intricate dance between workers’ demands and economic realities.

Come Monday, November 13th, the future wages of countless individuals will be on the negotiating table, and the outcome will shape the financial landscape for the year to come.