New minimum wage, base pay won’t affect inflation – Economist

Business News of Thursday, 22 January 2015


Inflation 1

Labour economist, Dr. William Baah Boateng is downplaying any negative impact of the recent hikes in the minimum wage and base pay on inflation.

There are fears that the recent adjustment which has seen the daily minimum go up by 1 Ghana cedi and 13 percent for the base pay of public sector workers, could result in a sharp increase in the general price levels of goods and services.

But Dr. Baah Boateng says this will not happen anytime soon.

“I think 13 percent increase in base pay is not a big percentage to put pressure on demand because 13 percent for me is within the optimum level. I don’t think it will have any major effect on inflation. If inflation is going to come then it should come from other areas and not wages,” he said.

Meanwhile, Finance Minister Seth Terkper has given the assurance that the adjustment will neither result in any increases in government’s expenditure nor threaten efforts to check the budget overruns.

“If we don’t finish negotiations before the budget, we make a provision…hoping that the negotiations would be within budget constraints and that is also very important.”

The Finance Minister also stated that Government is confident workers will not hit the streets because negotiations with labour have been satisfactory for both parties.

Speaking on the Super Morning Show, Mr Terkper said enough negotiations have been conducted to ensure that labour agitations over allowances and problems with salaries are avoided this year.

On the issue of payroll fraud which has been topical, with the International Monetary Fund raising concerns, Mr. Terkper said all ghost names are being cleared.